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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON,
DC 20549

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FORM
10-Q

|                                                   |                                                                                             
|-------------------------------------------------- | --------------------------------------------------------------------------------------------
|x                                                  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR
 15(D) OF THE SECURITIES AND EXCHANGE ACT OF 1934
|                                                   |                                                                                             
|For the quarterly period
 ended September 30, 2007
|                                                   |                                                                                             
|OR                                                
|                                                   |                                                                                             
|o                                                  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR
 15(D) OF THE SECURITIES AND EXCHANGE ACT OF 1934

For the transition period
from _______ to _________

Commission File Number: 000-51091

SUMMIT GLOBAL LOGISTICS, INC.

(f/k/a AEROBIC CREATIONS, INC.)

(Exact name of registrant as specified in its charter)

|                                                   |  |                        
|-------------------------------------------------- |  | -----------------------
|Delaware                                           |  | 20-0781155             
|(State
 or other jurisdiction of                   |  | (I.R.S.
 Employer      
|incorporation
 or organization)                    |  | Identification
 Number)
|                                                   |  |                        
|One Meadowlands Plaza, East Rutherford, New Jersey |  | 07073                  
|(Address of principal executive offices)           |  | (Zip Code)             

Registrants telephone number, including area code:(201) 806-3700

Indicate by check mark
whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to the 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 definition 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

The number of shares of the
registrants common stock, $0.001 par value per share, outstanding on November
19, 2007 was 7,594,958.

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SUMMIT GLOBAL LOGISTICS, INC.

FORM 10-Q

INDEX

|              |                                                                                                                                                                                                                                                                                                                                                                |    |         
|------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -- | --------
|              |                                                                                                                                                                                                                                                                                                                                                                |    | PAGE NO.
|              |                                                                                                                                                                                                                                                                                                                                                                |    |         
|              |                                                                                                                                                                                                                                                                                                                                                                |    |         
|PART I. -     | FINANCIAL
 INFORMATION                                                                                                                                                                                                                                                                                                                                         |    | 1       
|ITEM 1.       | Financial
 Statements                                                                                                                                                                                                                                                                                                                                          |    |         
|              |                                                                                                                                                                                                                                                                                                                                                                |    |         
|              | SUMMIT GLOBAL LOGISTICS, INC. AND SUBSIDIARIES                                                                                                                                                                                                                                                                                                                 |    |         
|              | Condensed Consolidated Balance Sheets as of September
 30, 2007 (Unaudited) and December 31, 2006                                                                                                                                                                                                                                                              |    | 2       
|              | Condensed Consolidated Statements of Operations
 (Unaudited) for the three and nine months ended September 30, 2007 and for
 the three months ended September 30, 2006 and for the period February 6, 2006
 (date of inception) to September 30, 2006                                                                                                          |    | 3       
|              | Condensed Consolidated Statement of Stockholders
 Equity and Comprehensive Loss (Unaudited) for the nine months ended
 September 30, 2007                                                                                                                                                                                                                     |    | 4       
|              | Condensed Consolidated Statements of Cash Flows
 (Unaudited) for the nine months ended September 30, 2007 and for the period
 February 6, 2006 (date of inception) to September 30, 2006                                                                                                                                                                       |    | 5       
|              | Notes to Condensed Consolidated Financial Statements
 (Unaudited)                                                                                                                                                                                                                                                                                              |    | 7       
|              |                                                                                                                                                                                                                                                                                                                                                                |    |         
|              | Financial Statements  Predecessor Companies                                                                                                                                                                                                                                                                                                                   |    |         
|              | (Our business combination on November 8, 2006,
 included the acquisitions of FMI Holdco I LLC and Subsidiary and TUG
 Logistics, Inc. and Affiliates, which are deemed predecessor companies since
 they were both similar in size relative to revenues and income, acquired with
 the same financing and equally significant to our consolidated operations.) |    |         
|              |                                                                                                                                                                                                                                                                                                                                                                |    |         
|              | FMI HOLDCO I LLC AND SUBSIDIARY                                                                                                                                                                                                                                                                                                                                |    |         
|              | Condensed Consolidated Statement of Operations for
 the three and nine months ended September 30, 2006 (Unaudited)                                                                                                                                                                                                                                             |    | 25      
|              | Condensed Consolidated Statement of Cash Flows for
 the nine months ended September 30, 2006 (Unaudited)                                                                                                                                                                                                                                                       |    | 26      
|              | Notes to Condensed Consolidated Statements of Operations
 and Cash Flows (Unaudited)                                                                                                                                                                                                                                                                           |    | 27      
|              | TUG LOGISTICS, INC. AND AFFILIATES                                                                                                                                                                                                                                                                                                                             |    |         
|              | Condensed Combined Statement of Operations for the
 three and nine months ended September 30, 2006 (Unaudited)                                                                                                                                                                                                                                                 |    | 29      
|              | Condensed Combined Statement of Cash Flows for the
 nine months ended September 30, 2006 (Unaudited)                                                                                                                                                                                                                                                           |    | 30      
|              | Notes to Condensed Combined Statements of Operations
 and Cash Flows (Unaudited)                                                                                                                                                                                                                                                                               |    | 31      
|              |                                                                                                                                                                                                                                                                                                                                                                |    |         
|ITEM 2.       | Managements Discussion and Analysis of Financial
 Condition and Results of Operations                                                                                                                                                                                                                                                                         |    | 33      
|ITEM 3.       | Quantitative and Qualitative Disclosure About Market
 Risk                                                                                                                                                                                                                                                                                                     |    | 55      
|ITEM 4.       | Controls and Procedures                                                                                                                                                                                                                                                                                                                                        |    | 56      
|              |                                                                                                                                                                                                                                                                                                                                                                |    |         
|PART II -     | OTHER INFORMATION                                                                                                                                                                                                                                                                                                                                              |    | 57      
|ITEM 1.       | Legal proceedings                                                                                                                                                                                                                                                                                                                                              |    | 57      
|ITEM 1A.      | Risk Factors                                                                                                                                                                                                                                                                                                                                                   |    | 57      
|ITEM 2.       | Unregistered Sales of Equity Securities and Use of
 Proceeds                                                                                                                                                                                                                                                                                                   |    | 58      
|ITEM 3.       | Defaults Upon Senior Securities                                                                                                                                                                                                                                                                                                                                |    | 58      
|ITEM 4.       | Submission of Matters to a Vote of Security Holders                                                                                                                                                                                                                                                                                                            |    | 59      
|ITEM 5.       | Other Information                                                                                                                                                                                                                                                                                                                                              |    | 59      
|ITEM 6.       | Exhibits                                                                                                                                                                                                                                                                                                                                                       |    | 59      
|Signatures    |                                                                                                                                                                                                                                                                                                                                                                | 63
|Exhibit index |                                                                                                                                                                                                                                                                                                                                                                |   

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PART I. FINANCIAL INFORMATIONItem 1. Financial statements

SUMMIT GLOBAL LOGISTICS,
INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

|                                                                                                                                           |  |                                 |         |                    |   |         | 
|------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------- | ------- | ------------------ | - | ------- | 
|                                                                                                                                           |  | September 30, 2007
 (Unaudited) |         | December 31,
 2006 |  
|                                                                                                                                           |  |                                 |         |                    |  
|ASSETS                                                                                                                                     |  |                                 |         |                    |   |         | 
|Current assets:                                                                                                                            |  |                                 |         |                    |   |         | 
|Cash and cash equivalents, including restricted cash of $3,424 and
 $4,038 as of September 30, 2007 and December 31, 2006, respectively    |  | $                               | 8,505   |                    | $ | 15,768  | 
|Accounts receivable, net of allowance for doubtful accounts of $661
 and $613 as of September 30, 2007 and December 31, 2006, respectively |  |                                 | 44,338  |                    |   | 25,721  | 
|Prepaid expenses and other current assets                                                                                                  |  |                                 | 5,021   |                    |   | 5,126   | 
|Deferred tax assets                                                                                                                        |  |                                 |        |                    |   | 77      | 
|                                                                                                                                           |  |                                 |         |                    |   |         | 
|Total current assets                                                                                                                       |  |                                 | 57,864  |                    |   | 46,692  | 
|                                                                                                                                           |  |                                 |         |                    |   |         | 
|                                                                                                                                           |  |                                 |         |                    |   |         | 
|Property and equipment, net                                                                                                                |  |                                 | 12,133  |                    |   | 10,373  | 
|Deferred financing costs, net of accumulated amortization of $2,764
 and $466 as of September 30, 2007 and December 31, 2006, respectively |  |                                 | 13,852  |                    |   | 13,323  | 
|Intangible assets, net                                                                                                                     |  |                                 | 39,121  |                    |   | 41,732  | 
|Goodwill                                                                                                                                   |  |                                 | 85,742  |                    |   | 94,081  | 
|Security deposits and other assets                                                                                                         |  |                                 | 751     |                    |   | 1,092   | 
|                                                                                                                                           |  |                                 |         |                    |   |         | 
|Total assets                                                                                                                               |  | $                               | 209,463 |                    | $ | 207,293 | 
|                                                                                                                                           |  |                                 |         |                    |   |         | 

See accompanying notes to the condensed consolidated financial
statements.

1

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SUMMIT GLOBAL LOGISTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(CONTINUED)

(IN THOUSANDS, EXCEPT PER SHARE DATA)

|                                                                                                         |  |                                 |         |                    |   |         |  
|-------------------------------------------------------------------------------------------------------- |  | ------------------------------- | ------- | ------------------ | - | ------- | -
|                                                                                                         | 
|                                                                                                         |  | September 30, 2007
 (Unaudited) |         | December 31,
 2006 |  
|LIABILITIES
 AND STOCKHOLDERS EQUITY                                                                    |  |                                 |         |                    |   |         |  
|Current liabilities:                                                                                     |  |                                 |         |                    |   |         |  
|Current portion of senior secured credit facility                                                        |  | $                               | 8,000   |                    | $ | 5,000   |  
|Current portion of capital lease obligations                                                             |  |                                 | 831     |                    |   | 801     |  
|Accounts payable and accrued expenses                                                                    |  |                                 | 35,597  |                    |   | 19,337  |  
|Accrued registration rights expense                                                                      |  |                                 | 3,869   |                    |   |        |  
|Due to related parties                                                                                   |  |                                 |        |                    |   | 844     |  
|                                                                                                         |  |                                 |         |                    |   |         |  
|Total current liabilities                                                                                |  |                                 | 48,297  |                    |   | 25,982  |  
|                                                                                                         |  |                                 |         |                    |   |         |  
|                                                                                                         |  |                                 |         |                    |   |         |  
|Long-term liabilities:                                                                                   |  |                                 |         |                    |   |         |  
|Senior secured credit facility                                                                           |  |                                 | 43,000  |                    |   | 49,000  |  
|Convertible notes                                                                                        |  |                                 | 55,908  |                    |   | 41,486  |  
|Fair value of derivative instruments                                                                     |  |                                 | 42,886  |                    |   | 32,148  |  
|Capital lease obligations                                                                                |  |                                 | 537     |                    |   | 845     |  
|Deferred tax liabilities                                                                                 |  |                                 |        |                    |   | 11,162  |  
|Loan payable, related party                                                                              |  |                                 | 2,000   |                    |   | 2,000   |  
|Other liabilities                                                                                        |  |                                 | 69      |                    |   |        |  
|                                                                                                         |  |                                 |         |                    |   |         |  
|Total long-term liabilities                                                                              |  |                                 | 144,400 |                    |   | 136,641 |  
|                                                                                                         |  |                                 |         |                    |   |         |  
|Total liabilities                                                                                        |  |                                 | 192,697 |                    |   | 162,623 |  
|                                                                                                         |  |                                 |         |                    |   |         |  
|                                                                                                         |  |                                 |         |                    |   |         |  
|Commitments and
 contingencies                                                                           |  |                                 |         |                    |   |         |  
|Stockholders equity:                                                                                    |  |                                 |         |                    |   |         |  
|Preferred stock, par value $0.001 per share 1,000 authorized shares,
 none issued and outstanding        |  |                                 |        |                    |   |        |  
|Common stock, par value $0.001 per share 99,000 authorized shares
 issued and outstanding - 7,595 shares |  |                                 | 7       |                    |   | 7       |  
|Additional paid-in capital                                                                               |  |                                 | 47,148  |                    |   | 45,509  |  
|Subscriptions receivable                                                                                 |  |                                 | (10     | )                  |   | (10     | )
|Noncontrolling interest in variable interest entity                                                      |  |                                 | 1,256   |                    |   |        |  
|Accumulated other comprehensive income                                                                   |  |                                 | 118     |                    |   |        |  
|Accumulated deficit                                                                                      |  |                                 | (31,753 | )                  |   | (836    | )
|                                                                                                         |  |                                 |         |                    |   |         |  
|Total stockholders equity                                                                               |  |                                 | 16,766  |                    |   | 44,670  |  
|                                                                                                         |  |                                 |         |                    |   |         |  
|Total liabilities and stockholders equity                                                               |  | $                               | 209,463 |                    | $ | 207,293 |  
|                                                                                                         |  |                                 |         |                    |   |         |  

See accompanying notes to the condensed consolidated financial
statements.

2

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SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(UNAUDITED)

(IN THOUSANDS, EXCEPT PER SHARE DATA)

|                                                                                                                                                                         |  |                                  |         |                                        |   |                                                               |   |   |         |   |   |       |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------------------------------- | ------- | -------------------------------------- | - | ------------------------------------------------------------- | - | - | ------- | - | - | ----- | -
|                                                                                                                                                                         |  |                                  |         |                                        |   | February 6, 2006
 (date of inception)
 to September 30,
 2006 |  
|                                                                                                                                                                         |  | Three Months Ended September 30, |         | Nine Months
 Ended
 September 30, 2007 |   |                                                              
|                                                                                                                                                                         |  |                                  |         |                                        |  
|                                                                                                                                                                         |  | 2007                             |         | 2006                                   |   |                                                               |  
|                                                                                                                                                                         |  |                                  |         |                                        |   |                                                               |   |   |        
|Revenues:                                                                                                                                                                |  |                                  |         |                                        |   |                                                               |   |   |         |   |   |       |  
|Air and ocean freight services                                                                                                                                           |  | $                                | 70,316  |                                        | $ |                                                              |   | $ | 136,154 |   | $ |      |  
|Logistics services                                                                                                                                                       |  |                                  | 29,583  |                                        |   | 550                                                           |   |   | 78,911  |   |   | 1,070 |  
|                                                                                                                                                                         |  |                                  |         |                                        |   |                                                               |   |   |         |   |   |       |  
|Total revenues                                                                                                                                                           |  |                                  | 99,899  |                                        |   | 550                                                           |   |   | 215,065 |   |   | 1,070 |  
|                                                                                                                                                                         |  |                                  |         |                                        |   |                                                               |   |   |         |   |   |       |  
|                                                                                                                                                                         |  |                                  |         |                                        |   |                                                               |   |   |         |   |   |       |  
|Direct expenses:                                                                                                                                                         |  |                                  |         |                                        |   |                                                               |   |   |         |   |   |       |  
|Air and ocean freight services                                                                                                                                           |  |                                  | 64,950  |                                        |   |                                                              |   |   | 124,078 |   |   |      |  
|Logistics services                                                                                                                                                       |  |                                  | 22,975  |                                        |   | 413                                                           |   |   | 64,147  |   |   | 831   |  
|                                                                                                                                                                         |  |                                  |         |                                        |   |                                                               |   |   |         |   |   |       |  
|Total direct expenses                                                                                                                                                    |  |                                  | 87,925  |                                        |   | 413                                                           |   |   | 188,225 |   |   | 831   |  
|                                                                                                                                                                         |  |                                  |         |                                        |   |                                                               |   |   |         |   |   |       |  
|Revenues less direct
 expenses                                                                                                                                           |  |                                  | 11,974  |                                        |   | 137                                                           |   |   | 26,840  |   |   | 239   |  
|                                                                                                                                                                         |  |                                  |         |                                        |   |                                                               |   |   |         |   |   |       |  
|                                                                                                                                                                         |  |                                  |         |                                        |   |                                                               |   |   |         |   |   |       |  
|Operating expenses:                                                                                                                                                      |  |                                  |         |                                        |   |                                                               |   |   |         |   |   |       |  
|General and administrative expense (including stock-based
 compensation expense of $454 and $1,708 for the three and nine months ended
 September 30, 2007, respectively |  |                                  | 11,308  |                                        |   | 274                                                           |   |   | 30,274  |   |   | 508   |  
|Depreciation and
 amortization                                                                                                                                           |  |                                  | 1,896   |                                        |   | 7                                                             |   |   | 5,526   |   |   | 10    |  
|Loss on impairment of
 goodwill                                                                                                                                          |  |                                  | 7,089   |                                        |   |                                                              |   |   | 7,089   |   |   |      |  
|                                                                                                                                                                         |  |                                  |         |                                        |   |                                                               |   |   |         |   |   |       |  
|Total operating expenses                                                                                                                                                 |  |                                  | 20,293  |                                        |   | 281                                                           |   |   | 42,889  |   |   | 518   |  
|                                                                                                                                                                         |  |                                  |         |                                        |   |                                                               |   |   |         |   |   |       |  
|                                                                                                                                                                         |  |                                  |         |                                        |   |                                                               |   |   |         |   |   |       |  
|Loss from operations                                                                                                                                                     |  |                                  | (8,319  | )                                      |   | (144                                                          | ) |   | (16,049 | ) |   | (279  | )
|                                                                                                                                                                         |  |                                  |         |                                        |   |                                                               |   |   |         |   |   |       |  
|Other income (expense):                                                                                                                                                  |  |                                  |         |                                        |   |                                                               |   |   |         |   |   |       |  
|Interest income                                                                                                                                                          |  |                                  | 42      |                                        |   |                                                              |   |   | 229     |   |   |      |  
|Interest expense                                                                                                                                                         |  |                                  | (5,753  | )                                      |   | (10                                                           | ) |   | (15,948 | ) |   | (15   | )
|Amortization of deferred finance charges                                                                                                                                 |  |                                  | (863    | )                                      |   |                                                              |   |   | (2,298  | ) |   |      |  
|Loss on derivative instruments                                                                                                                                           |  |                                  | (1,840  | )                                      |   |                                                              |   |   | (1,700  | ) |   |      |  
|Registration rights expense                                                                                                                                              |  |                                  | (3,869  | )                                      |   |                                                              |   |   | (6,869  | ) |   |      |  
|                                                                                                                                                                         |  |                                  |         |                                        |   |                                                               |   |   |         |   |   |       |  
|Loss before income tax
 benefit                                                                                                                                          |  |                                  | (20,602 | )                                      |   | (154                                                          | ) |   | (42,635 | ) |   | (294  | )
|                                                                                                                                                                         |  |                                  |         |                                        |   |                                                               |   |   |         |   |   |       |  
|Income tax (benefit)                                                                                                                                                     |  |                                  | (5,501  | )                                      |   |                                                              |   |   | (10,718 | ) |   |      |  
|                                                                                                                                                                         |  |                                  |         |                                        |   |                                                               |   |   |         |   |   |       |  
|                                                                                                                                                                         |  |                                  |         |                                        |   |                                                               |   |   |         |   |   |       |  
|Net loss                                                                                                                                                                 |  | $                                | (15,101 | )                                      | $ | (154                                                          | ) | $ | (31,917 | ) | $ | (294  | )
|                                                                                                                                                                         |  |                                  |         |                                        |   |                                                               |   |   |         |   |   |       |  
|                                                                                                                                                                         |  |                                  |         |                                        |   |                                                               |   |   |         |   |   |       |  
|Weighted average common shares outstanding, basic and diluted (in
 thousands)                                                                                            |  |                                  | 7,595   |                                        |   |                                                               |   |   | 7,595   |   |   |       |  
|                                                                                                                                                                         |  |                                  |         |                                        |   |                                                               |   |   |         |   |   |       |  
|Loss per common share,
 basic and diluted                                                                                                                                |  | $                                | (1.99   | )                                      |   |                                                               |   | $ | (4.20   | ) |   |       |  
|                                                                                                                                                                         |  |                                  |         |                                        |   |                                                               |   |   |         |   |   |       |  

See accompanying notes to the condensed consolidated financial
statements.

3

---



SUMMIT GLOBAL LOGISTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED
STATEMENTS OF STOCKHOLDERS EQUITY
AND COMPREHENSIVE LOSS
(UNAUDITED)

FOR THE PERIOD FROM JANUARY 1, 2007 TO SEPTEMBER 30,
2007

(IN THOUSANDS)

|                                                        |  |              |       |                              |                          |   |  |                                  |                    |                                           |       |     |   |   |       |   |   |     |  |   |         |   |   |         |  
|------------------------------------------------------- |  | ------------ | ----- | ---------------------------- | ------------------------ | - |  | -------------------------------- | ------------------ | ----------------------------------------- | ----- | --- | - | - | ----- | - | - | --- |  | - | ------- | - | - | ------- | -
|                                                        |  |              |       |                              |                          |   |  |                                  |                    | Accumulated
 Other
 Comprehensive
 Income |       |     |   |   |      
|                                                        |  | Common stock |       | Additional
 paid-in
 capital |                          |   |  | Noncontrolling
 Interest in
 VIE |                    |                                           |       |     |   |  
|                                                        |  |              |       |                              | Subscription
 Receivable |   |  |                                  | AccumulatedDeficit |                                           |       |    
|                                                        |  | Shares       |       | Amount                       |                          |   |  |                                  |                    |                                           | Total |    
|                                                        |  |              |       |                              |                          |   |  |                                  |                    |                                           |       |     |   |   |       |   |  
|Balance as of December 31, 2006, as previously reported |  |              | 7,595 |                              | $                        | 7 |  | $                                | 45,509             |                                           | $     | (10 | ) | $ |      |   | $ |    |  | $ | (836    | ) | $ | 44,670  |  
|                                                        |  |              |       |                              |                          |   |  |                                  |                    |                                           |       |     |   |   |       |   |   |     |  |   |         |   |   |         |  
|Prior period adjustment                                 |  |              |       |                              |                          |   |  |                                  |                    |                                           |       |     |   |   |       |   |   |     |  |   | 762     |   |   | 762     |  
|                                                        |  |              |       |                              |                          |   |  |                                  |                    |                                           |       |     |   |   |       |   |   |     |  |   |         |   |   |         |  
|                                                        |  |              |       |                              |                          |   |  |                                  |                    |                                           |       |     |   |   |       |   |   |     |  |   |         |   |   |         |  
|Balance as of December 31, 2006, as adjusted            |  |              | 7,595 |                              |                          | 7 |  |                                  | 45,509             |                                           |       | (10 | ) |   |      |   |   |    |  |   | (74     | ) |   | 45,432  |  
|                                                        |  |              |       |                              |                          |   |  |                                  |                    |                                           |       |     |   |   |       |   |   |     |  |   |         |   |   |         |  
|Stock options                                           |  |              |       |                              |                          |   |  |                                  | 1,255              |                                           |       |     |   |   |       |   |   |     |  |   |         |   |   | 1,255   |  
|Restricted shares                                       |  |              |       |                              |                          |   |  |                                  | 384                |                                           |       |     |   |   |       |   |   |     |  |   |         |   |   | 384     |  
|                                                        |  |              |       |                              |                          |   |  |                                  |                    |                                           |       |     |   |   |       |   |   |     |  |   |         |   |   |         |  
|Consolidation of variable interest entity               |  |              |       |                              |                          |   |  |                                  |                    |                                           |       |     |   |   | 1,494 |   |   |     |  |   |         |   |   | 1,494   |  
|                                                        |  |              |       |                              |                          |   |  |                                  |                    |                                           |       |     |   |   |       |   |   |     |  |   |         |   |   |         |  
|Net loss for nine months ended September 30, 2007       |  |              |       |                              |                          |   |  |                                  |                    |                                           |       |     |   |   | (238  | ) |   |     |  |   | (31,679 | ) |   | (31,917 | )
|                                                        |  |              |       |                              |                          |   |  |                                  |                    |                                           |       |     |   |   |       |   |   |     |  |   |         |   |   |         |  
|Foreign currency translation adjustment                 |  |              |       |                              |                          |   |  |                                  |                    |                                           |       |     |   |   |       |   |   | 118 |  |   |         |   |   | 118     |  
|                                                        |  |              |       |                              |                          |   |  |                                  |                    |                                           |       |     |   |   |       |   |   |     |  |   |         |   |   |         |  
|                                                        |  |              |       |                              |                          |   |  |                                  |                    |                                           |       |     |   |   |       |   |   |     |  |   |         |   |   |         |  
|Comprehensive loss                                      |  |              |       |                              |                          |   |  |                                  |                    |                                           |       |     |   |   |       |   |   |     |  |   |         |   |   | (31,799 | )
|                                                        |  |              |       |                              |                          |   |  |                                  |                    |                                           |       |     |   |   |       |   |   |     |  |   |         |   |   |         |  
|                                                        |  |              |       |                              |                          |   |  |                                  |                    |                                           |       |     |   |   |       |   |   |     |  |   |         |   |   |         |  
|Balance as of September 30, 2007                        |  |              | 7,595 |                              | $                        | 7 |  | $                                | 47,148             |                                           | $     | (10 | ) | $ | 1,256 |   | $ | 118 |  | $ | (31,753 | ) | $ | 16,766  |  
|                                                        |  |              |       |                              |                          |   |  |                                  |                    |                                           |       |     |   |   |       |   |   |     |  |   |         |   |   |         |  

See accompanying notes to the condensed consolidated financial
statements.

4

---



SUMMIT GLOBAL LOGISTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(UNAUDITED)

(IN THOUSANDS)

|                                                                             |  |                                        |         |                                                              |   |      |  
|---------------------------------------------------------------------------- |  | -------------------------------------- | ------- | ------------------------------------------------------------ | - | ---- | -
|                                                                             |  | Nine Months
 Ended
 September 30, 2007 |         | February 6, 2006
 (date of inception)
 to September 30, 2006 |  
|                                                                             |  |                                        |         |                                                              |  
|Cash flows from operating
 activities:                                       |  |                                        |         |                                                              |   |      |  
|Net loss                                                                     |  | $                                      | (31,917 | )                                                            | $ | (294 | )
|Adjustments to reconcile net loss to net cash used in operating
 activities: |  |                                        |         |                                                              |   |      |  
|Provision for doubtful accounts                                              |  |                                        | 48      |                                                              |   |     |  
|Depreciation and amortization of property and equipment                      |  |                                        | 1,496   |                                                              |   | 10   |  
|Loss on impairment
    of goodwill                                           |  |                                        | 7,089   |                                                              |   |     |  
|Amortization of deferred financing costs                                     |  |                                        | 2,298   |                                                              |   |     |  
|Amortization of intangible assets                                            |  |                                        | 4,030   |                                                              |   |     |  
|Amortization of discount on convertible debt                                 |  |                                        | 5,108   |                                                              |   |     |  
|Stock-based compensation expense                                             |  |                                        | 1,708   |                                                              |   |     |  
|Loss on derivative instruments                                               |  |                                        | 1,700   |                                                              |   |     |  
|Registration rights expense                                                  |  |                                        | 6,869   |                                                              |   |     |  
|Deferred income taxes                                                        |  |                                        | (11,085 | )                                                            |   |     |  
|Accrued interest expense converted into notes                                |  |                                        | 400     |                                                              |   |     |  
|Increase (decrease) in cash resulting from changes in:                       |  |                                        |         |                                                              |   |      |  
|Accounts receivable                                                          |  |                                        | (17,950 | )                                                            |   | 16   |  
|Prepaid expenses and other current assets                                    |  |                                        | 1,580   |                                                              |   | (75  | )
|Accounts payable and accrued expenses                                        |  |                                        | 15,064  |                                                              |   | 50   |  
|                                                                             |  |                                        |         |                                                              |   |      |  
|Net cash used in operating activities:                                       |  |                                        | (13,562 | )                                                            |   | (293 | )
|                                                                             |  |                                        |         |                                                              |   |      |  
|                                                                             |  |                                        |         |                                                              |   |      |  
|Cash flows from investing
 activities:                                       |  |                                        |         |                                                              |   |      |  
|Cash included in variable interest entity                                    |  |                                        | 416     |                                                              |   |     |  
|Adjustment to purchase price of subsidiary                                   |  |                                        | (124    | )                                                            |   |      |  
|Acquisition of subsidiary                                                    |  |                                        |        |                                                              |   | (500 | )
|Cash included in acquisition of subsidiary                                   |  |                                        |        |                                                              |   | 244  |  
|Purchase of property and equipment                                           |  |                                        | (2,721  | )                                                            |   | (34  | )
|Security deposits and other assets                                           |  |                                        | 341     |                                                              |   |     |  
|                                                                             |  |                                        |         |                                                              |   |      |  
|Net cash used in investing activities                                        |  |                                        | (2,088  | )                                                            |   | (290 | )
|                                                                             |  |                                        |         |                                                              |   |      |  

See accompanying notes to the condensed consolidated financial
statements.

5

---



SUMMIT GLOBAL LOGISTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

(IN THOUSANDS)

|                                                                 |  |                                        |        |                                                              |   |     | 
|---------------------------------------------------------------- |  | -------------------------------------- | ------ | ------------------------------------------------------------ | - | --- | 
|                                                                 |  | Nine Months
 Ended
 September 30, 2007 |        | February 6, 2006
 (date of inception)
 to September 30, 2006 |  
|                                                                 |  |                                        |        |                                                              |  
|Cash flows from financing
 activities:                           |  |                                        |        |                                                              |   |     | 
|Proceeds from issuance of convertible notes                      |  | $                                      | 15,000 |                                                              | $ |    | 
|Repayment of borrowings under the senior secured credit
facility |  |                                        | (3,000 | )                                                            |   |    | 
|Transaction costs                                                |  |                                        | (2,115 | )                                                            |   |    | 
|Repayment of capital lease obligations                           |  |                                        | (716   | )                                                            |   |    | 
|Proceeds from loan payable, other                                |  |                                        |       |                                                              |   | 350 | 
|Proceeds from issuance of common stock                           |  |                                        |       |                                                              |   | 363 | 
|(Repayment) proceeds of loan payable, related party              |  |                                        | (844   | )                                                            |   | 52  | 
|                                                                 |  |                                        |        |                                                              |   |     | 
|Net cash provided by financing activities                        |  |                                        | 8,325  |                                                              |   | 765 | 
|                                                                 |  |                                        |        |                                                              |   |     | 
|Effects of foreign
 currency translation on cash                 |  |                                        | 62     |                                                              |   |    | 
|                                                                 |  |                                        |        |                                                              |   |     | 
|Net (decrease) increase in
 cash and cash equivalents            |  |                                        | (7,263 | )                                                            |   | 182 | 
|Cash and cash equivalents,
 beginning of period                  |  |                                        | 15,768 |                                                              |   |    | 
|                                                                 |  |                                        |        |                                                              |   |     | 
|Cash and cash equivalents,
 end of period                        |  | $                                      | 8,505  |                                                              | $ | 182 | 
|                                                                 |  |                                        |        |                                                              |   |     | 
|                                                                 |  |                                        |        |                                                              |   |     | 
|Supplemental disclosures
 of cash flow information:              |  |                                        |        |                                                              |   |     | 
|Cash paid during the period for:                                 |  |                                        |        |                                                              |   |     | 
|Interest                                                         |  | $                                      | 7,034  |                                                              | $ |    | 
|Income taxes                                                     |  |                                        | 636    |                                                              |   |    | 
|Noncash investing and financing activities:                      |  |                                        |        |                                                              |   |     | 
|Property and equipment acquired under capital leases             |  | $                                      | 438    |                                                              | $ |    | 
|Consolidation of variable interest entity                        |  |                                        | 1,494  |                                                              |   |    | 
|Transaction costs converted into notes                           |  |                                        | 713    |                                                              |   |    | 
|Common stock issued in settlement of financing costs             |  |                                        |       |                                                              |   | 60  | 
|Due to seller for acquisition of subsidiary                      |  |                                        |       |                                                              |   | 250 | 
|Acquisition costs included in accounts payable                   |  |                                        |       |                                                              |   | 15  | 
|Dividends payable                                                |  |                                        |       |                                                              |   | 150 | 

See accompanying notes to the condensed consolidated financial
statements.

6

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(UNAUDITED)

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | NATURE OF BUSINESS AND BASIS OF PRESENTATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | History and Nature of the Business                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Summit
  Global Logistics, Inc. (the Company, we, us, and/or our) through its
  wholly-owned operating subsidiary, Maritime Logistics US Holdings Inc.
  (MLI) and its subsidiaries, is an international third party logistics
  provider specializing in ocean transportation intermediary services for Asia
  and North America. It offers domestic and international ocean, air and ground
  third-party logistics services.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | MLI was
  formed on February 6, 2006 in the State of New Jersey. MLI owns and manages
  various corporations that provide worldwide marine and inland transportation
  and logistics services. MLI, through one of its wholly-owned subsidiaries,
  possesses an ocean transportation intermediary license issued by the United
  States Federal Maritime Commission, pursuant to the Shipping Act of 1984, as
  a Non-Vessel-Operating Common Carrier (NVOCC). MLI is headquartered in
  East Rutherford, New Jersey.                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | TUG USA,
  Inc., formerly Dolphin US Logistics Inc., a wholly-owned subsidiary of MLI,
  was formed in February 2006 in the State of New Jersey.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Summit
  Logistic International Inc. (SMI) and AMR Investments Inc. (AMR),
  wholly-owned subsidiaries of MLI, were formed in February 2006 in the State
  of New Jersey. They provide worldwide marine and inland transportation and
  logistics services.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Effective
  May 1, 2006, AMR purchased 100% of the outstanding shares of AmeRussia
  Shipping Co. Inc., a Delaware corporation, and its affiliate, AmeRussia Ltd.,
  a Russian corporation (collectively, AmeRussia). They provide international
  transportation services.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Seamaster
  Logistics Inc. (SLI), a wholly-owned subsidiary of MLI, was formed in
  August 2006 in the State of Delaware. SLI is licensed in the United States as
  an ocean transportation intermediary.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | On September
  28, 2006, SLI purchased the entire issued capital of Seamaster Logistics
  (Holding) Limited (SLHL). SLHL is a Hong Kong/China-based, asset-light,
  ocean transportation intermediary and logistics provider with offices in Hong
  Kong and an exclusive agency network in China.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | On November
  8, 2006 (effective November 1, 2006), MLI merged with a wholly-owned
  subsidiary of Aerobic Creations, Inc. (Aerobic) pursuant to an agreement
  and plan of merger. The merger is treated as a recapitalization for financial
  accounting purposes. Accounting principles generally accepted in the United
  States of America generally require that a company whose security holders
  retain the majority voting interest in the combined business be treated as
  the acquirer for financial reporting purposes. MLI is treated as the acquirer
  for accounting purposes, whereas Aerobic is treated as the acquirer for legal
  purposes. The Board of Directors and more than a majority of the stockholders
  approved a one for approximately 11.226 share reverse stock split of
  Aerobics issued and outstanding stock. On February 20, 2007, Aerobic changed
  its name to Summit Global Logistics, Inc.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Immediately
  following the merger and recapitalization, MLI acquired (i) all of the equity
  interests of FMI Holdco I LLC, and its parent company FMI Blocker, Inc.; and
  (ii) certain of the assets of the TUG Logistics group of companies including
  TUG Logistics, Inc. (LAX), TUG Logistics (Miami) Inc., and Glare Logistics,
  Inc. and all of the equity interests of Clare Freight Los Angeles Inc. and
  TUG New York, Inc. FMI Blocker Inc. was a pass through entity with no assets
  other than its controlling interest in FMI Holdco I LLC, and was immediately
  dissolved after the acquisition.                                                                                                                                                                                                                                                                                                                  

7

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(UNAUDITED)

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | FMI Holdco I
  LLC and its wholly-owned subsidiary, FMI International LLC, are based in New
  Jersey and were founded in 1979. FMI International LLCs wholly-owned
  subsidiaries are FMI Express Corp., FMI Trucking, Inc., FMI International
  Corp., FMI International Corp. (West), and Fashion Marketing, Inc.
  Collectively, these companies are referred to as FMI. FMI is a full-service
  logistics and supply chain management service provider to the retail
  industry. FMI offers ocean and air freight forwarding; local trucking
  services in the New York and Los Angeles metropolitan markets; line haul
  truck load services throughout the continental 48 states of the United States
  of America; and warehousing, consolidation, distribution and marketing
  services in the New York, Los Angeles and Miami markets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | TUG USA,
  Inc. which acquired certain of the assets of the TUG Logistics group of
  companies and all of the equity interests of Clare Freight Los Angeles Inc.
  and TUG New York, Inc. (collectively TUG) operates as a non-asset based
  ocean transportation intermediary focused on imports and exports between the
  United States and Asia. TUG provides logistics services through its
  subsidiaries in the United States. TUG provides ocean, air, supply chain
  logistics, warehouse and distribution and customs brokerage services to its
  customers, as well as a full range of ocean transportation intermediary
  services, forwarding containers between Asia and the United States using
  multiple carriers. TUG is a Non-Vessel-Operating Common Carrier (NVOCC).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | In December
  2006, the provincial authority in Shanghai in the Peoples Republic of
  China (PRC) approved the establishment of Seamaster Logistics (Shanghai)
  Ltd., a wholly-foreign-owned enterprise, or WFOE, under newly adopted rules
  in the PRC permitting foreign corporations to own and operate companies in
  the PRC. The approval was subject to the WFOE obtaining a business license
  from the Shanghai provincial authority, which was received in January 2007.
  During 2007, through our WFOE, we established offices at major transportation
  centers in the PRC. SLI, our subsidiary, has an exclusive agency agreement
  with Seamaster Logistics (China) Ltd., a Chinese company (Seamaster China).
  We may acquire the Shanghai office of Seamaster China. Seamaster China has
  a Class A license as an international freight forwarding agent in Shanghai.
  The Company believes that Seamaster China is a variable interest entity (VIE).
  Under Financial Accounting Standards Board Interpretation No. 46 (revised
  December 2003), Consolidation of Variable Interest Entities (FIN
  46R), Seamaster China is consolidated in the financial statements effective
  April 1, 2007. See Note 16 Subsequent Events.                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | Basis of Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | The
  accompanying unaudited condensed consolidated financial statements of Summit
  Global Logistics, Inc. and Subsidiaries have been prepared in accordance with
  accounting principles generally accepted in the United States of America
  (GAAP) for interim financial information and the instructions to
  Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include
  all of the information and footnotes required by GAAP for complete financial
  statements. These unaudited condensed consolidated financial statements and
  notes should be read in conjunction with the audited consolidated financial
  statements and notes included in our Form 10-K/A for the year ended December
  31, 2006. In managements opinion, these unaudited condensed consolidated
  financial statements reflect all adjustments (consisting of only normal, recurring
  accruals) necessary for the fair presentation of our unaudited condensed
  consolidated financial position as of September 30, 2007, and the unaudited
  condensed consolidated statements of operations for the three months ended
  September 30, 2007 and 2006, and the statements of operations and cash flows
  for the nine months ended September 30, 2007 and for the period February 6,
  2006 (date of inception) to September 30, 2006, and the unaudited condensed
  consolidated statements of stockholders equity and comprehensive loss
  for the period from January 1, 2007 to September 30, 2007.

8

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(UNAUDITED)

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In January
  2003, the Financial Accounting Standards Board (FASB) issued FASB
  Interpretation No. 46 Consolidation of Variable Interest Entities (revised
  December 2003) (FIN 46(R)). FIN 46(R) explains the concept of a variable
  interest entity and requires consolidation by the primary beneficiary where
  the variable interest entity does not have sufficient equity at risk to
  finance its activities without additional subordinated financial support from
  other parties. The Company believes that Seamaster China is a variable interest
  entity. Under FIN 46(R), Seamaster China is consolidated in the financial
  statements effective April 1, 2007. The financial information of the variable
  interest entity is as follows:

|                                        |  |                                                       |        |                                                      |   |        |  
|--------------------------------------- |  | ----------------------------------------------------- | ------ | ---------------------------------------------------- | - | ------ | -
|                                        |  | (IN THOUSANDS)                                        |       
|                                        |  |                                                       |       
|                                        |  | Three Months Ended
  September 30, 2007
  (Unaudited) |        | Nine months ended
  September 30, 2007
  (Unaudited) |  
|                                        |  |                                                       |        |                                                      |  
|Total
  revenues                        |  | $                                                     | 15,479 |                                                      | $ | 27,087 |  
|Net loss                                |  |                                                       | (291   | )                                                    |   | (238   | )
|                                        |  |                                                       |        |                                                      |   |        |  
|Total assets
  as of end of period      |  |                                                       |        |                                                      | $ | 6,656  |  
|Total
  liabilities as of end of period |  |                                                       |        |                                                      |   | 5,400  |  
|Total equity                            |  |                                                       |        |                                                      |   | 1,256  |  

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The
  unaudited condensed consolidated results of operations for the three and nine
  months ended September 30, 2007 are not necessarily indicative of the results
  to be expected for the year ending December 31, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | These
  unaudited condensed consolidated financial statements reflect the financial
  position, results of operations and cash flows of Summit Global Logistics
  Inc. and its subsidiary Maritime Logistics US Holdings Inc. and its
  subsidiaries, TUG USA, Inc., Summit Logistics International, Inc., AMR
  Investment Inc., Seamaster Logistics Inc. and subsidiary, FMI Holdco I LLC,
  and their subsidiaries, and Seamaster Logistics (China) Ltd., our VIE,
  (collectively, the Company).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Liquidity
    
    The
        accompanying unaudited condensed consolidated financial statements have
        been prepared on a basis which contemplates the realization of assets
        and the satisfaction of liabilities and commitments in the normal course
        of business. As disclosed elsewhere herein, we will need additional working
        capital during the first quarter of 2008 to fund our growth and operations.
        Our ability to continue as a going concern is dependent upon our ability
        to become profitable, generate positive cash flow from operations, obtain new
        financing to meet obligations and repay liabilities when they come due.
        We are seeking to increase profitability, cash flow and liquidity. Managements
        plans include securing new customers; subletting warehouse space; reducing
        overhead costs, insurance expenses, operational costs, and professional
        fees; closing unprofitable offices; and procuring more favorable cost
        rates from its vendors and seeking a more competitive capital structure.
        Although we continue to pursue these plans, there is no assurance that
        we will be successful in generating such profitable operations or obtaining
        new financing on acceptable terms or at all. The Company has in the past
        not met the financial covenants included in its senior secured credit
        facility and its convertible notes; the Company did, however, on November
        19, 2007, obtain waivers of all existing defaults and resets of the applicable
        financial covenants.
    
    These
        factors raise doubt about our ability to continue as a going concern.
        We plan to satisfy our capital needs through any cash we can generate
        from our operations, new financing in the form of equity or debt, subject
        to the approval of our lenders where required. These unaudited condensed
        consolidated financial statements included in this report do not include
        any adjustments to the amounts and classification of assets and liabilities
        that may be necessary should we be unable to continue as a going concern.
    We
        are working constructively with our Senior Secured lender and our Convertible
        Note holders (which on November 19, 2007, granted us the waivers described
        elsewhere herein) with respect to various strategic alternatives. In
        that regard, the Company has engaged Gordian Group, LLC, an investment
        bank, to advise it on such matters. The Company seeks to maximize the
        value of the Company and is contemplating, among other possible initiatives,
        a recapitalization, a restructuring, an alliance with strategic partners,
        and a sale to or merger with a third party, any of which, if pursued,
        could be implemented outside or inside Chapter 11 of the Bankruptcy Code,
    as appropriate.
    Prior
          Period Adjustment
    The
        Company recorded a prior period adjustment to retained earnings for $762,
        which accounts for the removal of the registration rights penalty from
        the compound embedded derivatives as of December 31, 2006 and adjusted
        the discount on the note based on the removal of the registration rights
      penalty from the discount. See Note 15.



9

---



|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Revenue Recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Air and Ocean Freight Services.Revenue is
  recognized at the time of shipment. The Company recognizes revenue on air and
  ocean freight services on a gross basis, in accordance with Emerging Issues
  Task Force (EITF) 99-19, Reporting Revenue Gross versus Net, as a result
  of the following: the Company is the primary obligor responsible for
  providing the service desired by its customer and is responsible for
  fulfillment, including the acceptability of the services ordered by the
  customer. The Company, at its sole discretion, 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 provides its customers and has the absolute and complete
  discretion and right to select the supplier that best serves our customer
  needs. In most cases, the Company determines the nature, type,
  characteristics, and specifications of the services ordered by the customer.
  The Company also assumes credit risk for the amount billed to the customer.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Customs Brokerage. Revenue is recognized
  when the necessary documentation for customs clearance has been completed.
  This revenue is generated by the fees charged for providing customs brokerage
  services. Reimbursement for the disbursements made on behalf of a customer
  (principally custom duty) is recorded as a reduction of expenses incurred in
  accordance with EITF 01-14, Income Statement Characterization of
  Reimbursements Received for Out-of-Pocket Expenses Incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

10

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(UNAUDITED)

Logistics Services.Revenue
for warehouse and distribution services is recognized at the time of receipt or
at the time of shipment based on services provided. Storage charges are
recognized on a monthly basis. Revenue for domestic transportation services is
recognized at the time of cargo receipt.

Use of Estimates

Preparing
financial statements in conformity with GAAP requires management to make
estimates and judgments about future events that affect the reported amounts of
assets, liabilities, revenues and expenses and the related disclosure of
contingent assets and liabilities. Examples include allowance for doubtful
accounts, useful lives of fixed assets, intangible asset valuations, accrued
expenses, fair value of financial instruments, incentive compensation, income
taxes, self-insurance reserves, post-retirement benefits, contingencies and
legal proceedings. Actual results may differ from these estimates under
different assumptions or conditions.

Property and Equipment

Property and equipment are
stated at cost. Depreciation is computed primarily by using the straight-line
and accelerated methods based upon the following estimated useful asset lives:

|                                               |       |      
|---------------------------------------------- | ----- | -----
|Office,
  computer and communication equipment | 3  5 | years
|Transportation
  equipment                     | 5  7 | years
|Warehouse
  and terminal equipment             | 7     | years

Leasehold
improvements are amortized over the term of the lease or useful life of the
related asset, whichever is shorter.

Expenditures
for maintenance and repairs are charged to expense as incurred. When assets are
retired or otherwise disposed of, the assets and related allowance for
depreciation and amortization are eliminated from accounts and any resulting
gain or loss is reflected in net income.

Goodwill

The Company reviews goodwill for impairment annually, or more
    frequently if impairment indicators arise and goodwill is written off when
    impaired. Impairment, if any, would be determined based on an implied fair
    value model for determining the carrying value of goodwill. The impairment
    test is a two-step process. The first step requires comparing the fair value
    of each reporting unit  to its net book value. The Company uses management
    estimates of future cash flows to perform the first step of the goodwill
    impairment test. Estimates made
  by management include assumptions about future conditions such as future
  revenues, gross margins and operating expenses. The second step is only
  performed if impairment is indicated after the first step is performed, as
  it
involves measuring the actual impairment to goodwill. The Company recorded an
    impairment charge of $7,089 in the third quarter of 2007. (See Note 6)

Convertible Notes

The Company
accounts for conversion options embedded in convertible notes in accordance
with Statement of Financial Accounting Standards (SFAS) No. 133, Accounting
for Derivative Instruments and Hedging Activities (SFAS 133) and EITF 00-19,
Accounting for Derivative Financial Instruments Indexed to, and Potentially
Settled in, a Companys Own Stock. SFAS 133 generally requires companies to
bifurcate conversion options embedded in convertible notes from their host
instruments and to account for them as free standing derivative financial
instruments in accordance with EITF 00-19. SFAS 133 provides for an exception
to this rule when convertible notes, as host instruments, are deemed to be
conventional as that term is described in the implementation guidance under
Appendix A to SFAS 133 and further clarified in EITF 05-02, The Meaning of
Conventional Convertible Debt Instruments, in EITF 00-19.

In accounting
for the convertible notes, the Company considered the guidance contained in
EITF 00-19 and SFAS 133. In accordance with the guidance provided in EITF
00-19, the Company determined that the conversion feature of the convertible
notes represents an embedded derivative since the note is convertible into a
variable number of shares upon conversion. Accordingly, the convertible notes
are not considered to be conventional convertible debt under EITF 00-19 and
thus the embedded conversion feature must be bifurcated from the debt host and
accounted for as a derivative liability.

11

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(UNAUDITED)

Derivatives

The Company
issued warrants and convertible notes that contain embedded derivatives that
require separate valuation. The Company, with the assistance of a third party,
estimates the fair value of its derivatives using available market information
and appropriate valuation methodologies. These derivatives derive their value
primarily based on changes in the price and volatility of the Companys common
stock. Changes in the estimated fair value of the embedded derivatives could
have a material effect on the Companys results of operations. Considerable
judgment is required in interpreting market data to develop the estimates of
fair value. Accordingly, the estimates presented herein are not necessarily
indicative of the amounts, if any, that the Company may eventually pay to
settle these embedded derivatives. The Company recognizes these derivatives as
liabilities in its consolidated balance sheet, measures them at their estimated
fair value and recognizes changes in their estimated fair value in their
consolidated results of operations in the period of change.

Stock-Based Incentive Plans

SFAS No. 123R Share-Based Payments (SFAS 123R),
requires all share-based payments to employees and non-employee directors,
including grants of employee stock options and employee stock purchase plans,
to be recognized in the financial statements based on their fair values.
The Company adopted SFAS 123R, in accounting for share-based compensation
granted under the 2006 Equity Incentive Plan. For stock options settled in
stock, compensation is measured on the grant date using valuation models. For
restricted stock units (RSU) and performance stock awards (PSA) settled in
stock, compensation is measured on the grant date using the fair values of the
Companys common stock. Compensation expense is recognized for each separately
vesting portion of the award as it is vested. For stock appreciation rights
(SAR) settled in stock, compensation expense is initially measured on the
grant date using a valuation model. For cash settled options and SARs,
compensation expense is recorded over the vesting period and changes in the
fair value between the date of grant and through when the cash settled options
and SARs are exercised and recognized as compensation expense. For the PSAs,
every reporting period until vesting, the cash settled portion is revalued
using valuation models and the stock settled portion is adjusted for any change
in the number of shares expected to be issued based on the performance
criteria. Any change in fair value is recognized as compensation expense.

Income Taxes

Deferred
income taxes are recognized for temporary differences between the basis of the
assets and liabilities for financial reporting and income tax purposes.
Temporary differences result primarily from the Companys net operating loss
(NOL) carryforwards as well as differences relating to intangible assets.
Deferred income taxes represent the future tax consequences of those
differences that will either be taxable or deductible when the assets and
liabilities are recovered or settled.

Realization of our deferred tax assets is, for the most part,
    dependent upon our U.S. consolidated tax group of companies having sufficient
    federal taxable income in future years to utilize our domestic net operating
    loss carryforwards before they expire. We assess our deferred tax valuation
    allowance on a quarterly basis in light of certain factors, including our
financial performance, and adjust the allowance if necessary.

Adoption of New Accounting Policies

Effective
January 1, 2007, the Company adopted Financial Accounting Standards Board
(FASB) Interpretation No. 48, Accounting for Uncertainty in Income Taxes
(FIN 48). an interpretation of
SFAS No. 109, Accounting for Income Taxes. The Interpretation addresses the
determination of whether tax benefits claimed or expected to be claimed on a
tax return should be

12

---



SUMMIT GLOBAL LOGISTICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  (UNAUDITED)

recorded in the financial statements. Under FIN 48, we may
recognize the tax benefit from an uncertain tax position only if it is more
likely than not that the tax position will be sustained on examination by the
taxing authorities, based on the technical merits of the position. The tax
benefits recognized in the financial statements from such a position should be
measured based on the largest benefit that has a greater than fifty percent
likelihood of being realized upon ultimate settlement. FIN 48 also provides
guidance on derecognition, classification, interest and penalties on income
taxes, accounting in interim periods and requires increased disclosures. (See
Note 12 - Income Taxes for additional disclosures.)

In December
2006, the FASB issued a Staff Position (FSP) on EITF 00-19-2, Accounting for
Registration Payment Arrangements (FSP 00-19-2). This FSP specifies that the
contingent obligation to make future payments or otherwise transfer
consideration under a registration payment arrangement, whether issued as a
separate agreement or included as a provision of a financial instrument or
other agreement, should be separately recognized and measured in accordance
with SFAS No. 5, Accounting for Contingencies. If the transfer of

13

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

consideration under a
registration payment arrangement is probable and can be reasonably estimated at
inception, the contingent liability under the registration payment arrangement
is included in the allocation of proceeds from the related financing
transaction (or recorded subsequent to the inception of a prior financing
transaction) using the measurement guidance in SFAS No. 5. This FSP is effective
immediately for registration payment arrangements and the financial instruments
subject to those arrangements that are entered into or modified subsequent to
the issuance of the FSP. For prior arrangements, the FSP is effective for
financial statements issued for fiscal years beginning after December 15, 2006
and interim periods within those years.

Variable Interest Entities

In January 2003, the FASB
issued FASB Interpretation No. 46 (FIN 46(R)), Consolidation of Variable
Interest Entities, an Interpretation of ARB No. 51, which was subsequently
revised in December 2003. Generally a variable interest entity, or VIE, is an
entity with one or more of the following characteristics, (a) the total equity
investment at risk is not sufficient to permit the entity to finance its
activities without additional subordinated financial support; (b) as a group
the holders of the equity investment at risk lack (i) the ability to make
decisions about an entitys activities through voting or similar rights, (ii) the
obligation to absorb the expected losses of the entity; or (c) the equity
investors have voting rights that are not proportional to their economic
interests and substantially all of the entitys activities either involve, or
are conducted on behalf of, an investor that has disproportionately few voting
rights. FIN 46(R) requires a VIE to be consolidated in the financial statements
of the entity that is determined to be the primary beneficiary of the VIE. The
primary beneficiary, as is applicable to the Companys circumstances with
Seamaster Logistics (China) Ltd. is Seamaster Logistics (Holdings) Ltd. The
Company has adopted FIN 46(R) effective April 1, 2007.

Foreign Currency Translation

The Companys foreign
subsidiaries and our VIEs functional currency has been translated into U.S.
dollars in accordance with SFAS No. 52, Foreign Currency Translation. All
assets and liabilities have been translated using the exchange rate in effect
at the balance sheet date. Unaudited condensed consolidated statement of
operations amounts have been translated using the average exchange rate for the
period. Adjustments from such translation included in accumulated other
comprehensive income amount to $31 and none for the three months ended
September 30, 2007 and 2006, respectively, and $118 and none for the nine
months ended September 30, 2007 and for the period from February 6, 2006 (date
of inception) to September 30, 2006, respectively.

(Loss) Earnings Per Share

Basic (loss) earnings per
share are computed by dividing income available to common stockholders by the
weighted-average number of common shares outstanding for the period. Diluted
(loss) earnings per share reflect the potential dilution that could occur if
the convertible notes were converted and common stock equivalents were
exercised and then shared in the earnings of the Company. If the effect of
outstanding options and warrants are anti-dilutive with respect to losses, they
are excluded from the computation of loss per common share.

The following table shows
the approximate number of stock equivalents outstanding that could potentially
dilute basic income per share in the future but were not included in the
calculation of diluted loss per share because their inclusion would be
anti-dilutive.

|                                                         |  |                               |        |      |  |   | 
|-------------------------------------------------------- |  | ----------------------------- | ------ | ---- |  | - | 
|                                                         |  | (IN THOUSANDS)
 September 30, |       
|                                                         |  | 2007                          |        | 2006 | 
|                                                         |  |                               |       
|Options                                                  |  |                               | 940    |      |  |  | 
|Warrants                                                 |  |                               | 6,864  |      |  |  | 
|Shares to be issued upon
 conversion of convertible debt |  |                               | 15,293 |      |  |  | 
|                                                         |  |                               |        |      |  |   | 
|Total number of stock equivalents                        |  |                               | 23,097 |      |  |  | 
|                                                         |  |                               |        |      |  |   | 

14

---



SUMMIT GLOBAL
LOGISTICS, INC. AND SUBSIDIARIES

NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | Recently Issued Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | As of the filing, no new
 accounting pronouncements were issued that are expected to have a material impact
 on the Companys consolidated financial position or results of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|3. | PRO FORMA FINANCIAL INFORMATION (UNAUDITED)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The following table sets
 forth the unaudited pro forma results of operations of the Company for the
 three and nine months ended September 30, 2006. The unaudited pro forma
 financial information summarizes the results of operations for the three and
 nine months ended September 30, 2006 as if the business combinations in 2006
 had occurred as of January 1, 2006. The pro forma information contains the
 actual operating results of the consolidated companies, with the results
 adjusted to include the proforma impact of incremental expenses, incremental
 amortization of acquired intangible assets, incremental interest expense, and
 provision for income taxes. The Company has included the unaudited proforma
 condensed consolidated results of operations of FMI Holdco I, LLC and
 Subsidiary, Tug Logistics, Inc. and Affiliates and MLI and Subsidiaries.
 These proforma amounts do not purport to be indicative of the results that
 would have actually been obtained if the acquisitions occurred as of the
 beginning of the period presented or that may be obtained in the future.

Proforma
Financial Information (Unaudited)

|                                                      |  |                                       |        |                                        |   |         |  
|----------------------------------------------------- |  | ------------------------------------- | ------ | -------------------------------------- | - | ------- | -
|                                                      |  | (IN
 THOUSANDS)                       |       
|                                                      |  |                                       |       
|                                                      |  | Three
 MonthsEnded
 September 30,2006 |        | Nine Months
 ended
 September 30, 2006 |  
|                                                      |  |                                       |        |                                        |  
|Total revenues                                        |  | $                                     | 57,856 |                                        | $ | 152,110 |  
|Total direct expenses                                 |  |                                       | 48,204 |                                        |   | 126,086 |  
|                                                      |  |                                       |        |                                        |   |         |  
|Revenues less direct
 expenses                        |  |                                       | 9,652  |                                        |   | 26,024  |  
|Total operating expenses                              |  |                                       | 7,210  |                                        |   | 20,539  |  
|                                                      |  |                                       |        |                                        |   |         |  
|Income from operations                                |  |                                       | 2,442  |                                        |   | 5,485   |  
|                                                      |  |                                       |        |                                        |   |         |  
|Interest expense, net,
 finance charges and bank fees |  |                                       | (2,312 | )                                      |   | (8,307  | )
|                                                      |  |                                       |        |                                        |   |         |  
|Income (loss) before
 income tax provision (benefit)  |  |                                       | 130    |                                        |   | (2,822  | )
|Income tax provision (benefit)                        |  |                                       | 53     |                                        |   | (1,128  | )
|                                                      |  |                                       |        |                                        |   |         |  
|Net income (loss)                                     |  | $                                     | 77     |                                        | $ | (1,694  | )
|                                                      |  |                                       |        |                                        |   |         |  

15

---



SUMMIT
GLOBAL LOGISTICS, INC. AND SUBSIDIARIES

NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

|   |                                                                                                 
|-- | ------------------------------------------------------------------------------------------------
|4. | PROPERTY AND EQUIPMENT                                                                          
|   |                                                                                                 
|   | At September 30, 2007 and
 December 31, 2006, property and equipment consisted of the following:

|                                                  |  |                                  |        |                    |   |        |  
|------------------------------------------------- |  | -------------------------------- | ------ | ------------------ | - | ------ | -
|                                                  |  | (IN
 THOUSANDS)                  |       
|                                                  |  |                                  |       
|                                                  |  | September
 30, 2007
 (Unaudited) |        | December
 31, 2006 |  
|                                                  |  |                                  |        |                    |  
|Office, computer and
 communication equipment     |  | $                                | 3,189  |                    | $ | 1,165  |  
|Transportation equipment                          |  |                                  | 961    |                    |   | 421    |  
|Warehouse and terminal
 equipment                 |  |                                  | 8,399  |                    |   | 8,412  |  
|Leasehold improvements                            |  |                                  | 1,198  |                    |   | 685    |  
|Construction in progress                          |  |                                  | 149    |                    |   | 18     |  
|                                                  |  |                                  |        |                    |   |        |  
|                                                  |  |                                  | 13,896 |                    |   | 10,701 |  
|Less - Accumulated
 depreciation and amortization |  |                                  | (1,763 | )                  |   | (328   | )
|                                                  |  |                                  |        |                    |   |        |  
|Net book value of property
 and equipment         |  | $                                | 12,133 |                    | $ | 10,373 |  
|                                                  |  |                                  |        |                    |   |        |  

| |                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Depreciation and
 amortization expense was $561 and $7 for the three months ended September 30,
 2007 and 2006, respectively, and $1,496 and $10 for the nine months ended
 September 30, 2007 and for the period from February 6, 2006 (date of
 inception) to September 30, 2006, respectively.
| |                                                                                                                                                                                                                                                                                                  
| | The changes in capital
 leases included in property and equipment are:                                                                                                                                                                                                                           

|                                        |  |                                                     |       |                    |   |       |  
|--------------------------------------- |  | --------------------------------------------------- | ----- | ------------------ | - | ----- | -
|                                        |  | (IN
 THOUSANDS)                                     |      
|                                        |  |                                                     |      
|                                        |  | Nine months
 ended
 September 30, 2007
 (Unaudited) |       | December
 31, 2006 |  
|                                        |  |                                                     |       |                    |  
|Capital leases, beginning
 of period    |  | $                                                   | 1,922 |                    |   |       |  
|Assets acquired through
 capital leases |  |                                                     | 438   |                    |   |       |  
|                                        |  |                                                     |       |                    |   |       |  
|Capital leases, end of
 period          |  |                                                     | 2,360 |                    | $ | 1,922 |  
|Less - accumulated
 depreciation        |  |                                                     | (390  | )                  |   | (97   | )
|                                        |  |                                                     |       |                    |   |       |  
|Net book value of capital
 leases       |  | $                                                   | 1,970 |                    | $ | 1,825 |  
|                                        |  |                                                     |       |                    |   |       |  

16

---



SUMMIT
GLOBAL LOGISTICS, INC. AND SUBSIDIARIES

NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

|   |                                             
|-- | --------------------------------------------
|5. | INTANGIBLE ASSETS                           
|   |                                             
|   | Intangible assets consist
 of the following:

|                         |  |                                  |        |                    |   |        |  
|------------------------ |  | -------------------------------- | ------ | ------------------ | - | ------ | -
|                         |  | (IN
 THOUSANDS)                  |       
|                         |  |                                  |       
|                         |  | September
 30, 2007
 (Unaudited) |        | December
 31, 2006 |  
|                         |  |                                  |        |                    |  
|Trademark                |  | $                                | 1,720  |                    | $ | 1,800  |  
|Software and other       |  |                                  | 3,300  |                    |   | 3,300  |  
|Customer list            |  |                                  | 39,000 |                    |   | 37,500 |  
|                         |  |                                  |        |                    |   |        |  
|                         |  |                                  | 44,020 |                    |   | 42,600 |  
|Accumulated amortization |  |                                  | (4,899 | )                  |   | (868   | )
|                         |  |                                  |        |                    |   |        |  
|Net carrying value       |  | $                                | 39,121 |                    | $ | 41,732 |  
|                         |  |                                  |        |                    |   |        |  

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | Amortization expense was
 $1,335 and none for the three months ended September 30, 2007 and 2006,
 respectively, and $4,030 and none for the nine months ended September 30,
 2007 and for the period from February 6, 2006 (date of inception) to
 September 30, 2006, respectively.
 During the nine months ended September 30, 2007, based on a final valuation
 of intangibles we reclassed approximately $1.4 million from goodwill to other
 intangibles.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|6. | LOSS ON IMPAIRMENT OF GOODWILL                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | During
 the three months ended September 30, 2007, based on the restructuring of its
    subsidiary Summit International Logistics, Inc. (SMI), the Company
 concluded that the carrying amount of goodwill is not recoverable and an
 impairment charge of $7,089 was recorded.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|7. | SENIOR SECURED CREDIT FACILITY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | On November 8, 2006, as
 part of the financing for the acquisitions, the Company obtained a senior
 secured credit facility from a financial institution and certain other
 lenders, consisting of (i) a $10 million revolver and (ii) a $55 million term
 loan. The senior secured credit facility has a five-year term and a 2% up
 front closing fee. Revolving loans, that constitute reference rate loans,
 bear interest at a rate per annum equal to 2% plus the greater of (i) the
 reference rate then in effect and (ii) 6%. Revolving loans that constitute
 LIBOR rate loans will bear interest at a rate per annum equal to 3% plus the
 greater of (i) the LIBOR rate then in effect and (ii) 4%. Term loans that
 constitute reference rate loans will bear interest at a rate per annum equal
 to the applicable margin plus the greater of (i) the reference rate then in
 effect and (ii) 6%. Term loans that constitute LIBOR rate loans will bear
 interest at a rate per annum equal to the applicable margin plus the greater
 of (i) the LIBOR rate then in effect and (ii) 4%.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Originally, applicable
 margins per annum on LIBOR rate loans range from 3.75% to 4.75% and for
 reference rate loans from 2.75% to 3.75% subject to the condition that the
 applicable margin will not be less than 4.25% during the period from November
 8, 2006 until the financial statements are delivered to agent after the last
 day of the fourth full fiscal quarter after the effective date, as defined.
 Upon the occurrence and during the continuation of an event of default, the
 interest rate(s) then in effect with respect to the obligations under the
 senior secured credit facility will be increased by three percent per annum.
 The applicable margins were increased in connection with the restructuring
 described below under the caption Amendments.                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The term loans require
 quarterly principal payments plus an annual principal payment each year in an
 amount equal to fifty percent of excess cash flow, as defined, for the
 immediately preceding fiscal year. The excess cash flow payments shall be
 applied to the term loan, in inverse order of maturity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

17

---



SUMMIT
GLOBAL LOGISTICS, INC. AND SUBSIDIARIES

NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | The revolver unused line
 fee equals one-half of one percent (.50%) per annum payable monthly. The
 revolver includes a letter of credit line of up to an aggregate amount of $7
 million. The letter of credit fee is 3% per annum payable monthly. The
 servicing fee equals $25 payable quarterly in advance. In addition, early
 termination fees may apply ranging from 1% to 2% of the total loan
 commitment. The deferred financing cost in connection with the senior secured
 credit facility amounted to approximately $6,194.                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The senior secured credit
 facility is secured by a first priority security interest in substantially
 all of existing and future assets of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The credit facility
 contains affirmative and negative covenants, and financial covenants which
 include (a) minimum EBITDA (earnings before interest, taxes, depreciation and
 amortization), (b) maximum total senior debt to EBITDA ratio, (c) minimum
 fixed charge coverage ratio, (d) maximum capital expenditure, and (e) key man
 provisions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Amendments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | On May 21, 2007, in
 connection with the restructuring of the senior secured credit facility, the
 Company agreed to pay the senior secured creditor $265, increase the interest
 rate on the loan facilities, and modify the financial covenants and, in
 exchange, the lenders agreed that all declared events of default were waived.
 As part of restructuring the debt of the Company, the Company amended the
 senior secured credit facility to increase the applicable margins by 0.50%.
 Under the amended credit facility the applicable margins per annum on LIBOR
 rate loans now range from 3.75% to 5.25% and for reference rate loans from
 2.75% to 4.25% subject to the condition that the applicable margin will not
 be less than 5.25% during the period from May 21, 2007 until the consolidated
 financial statements are delivered to the agent after the last day of the
 fourth full fiscal quarter after the effective date, as defined.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | In addition, on and after
 May 21, 2007, as part of the restructuring of the debt of the Company, the
 Company agreed that the senior secured lenders have no obligation to make any
 revolving loans to the Company under the revolving loan facility, but they
 may do so at their discretion.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The Company failed to meet
 certain financial covenants contained in the amended senior secured credit
 agreement. In November 2007, effective as of the dates
    the events of default occurred September 30, 2007, we obtained a waiver of
    all existing events of default from the senior secured creditor. (See Note
    16 - Subsequent Events.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|8. | CONVERTIBLE NOTES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | On November 8, 2006, as
 part of the financing for the acquisitions, the Company entered into a
 securities purchase agreement and issued (i) secured convertible notes in an
 aggregate principal amount of $65 million, which were originally convertible
 at the option of the holder into shares of the Companys common stock at an
 initial conversion price equal to $11.00 per share (subject to adjustment)
 and (ii) warrants to acquire in the aggregate up to 40% of the number of
 shares of common stock issuable upon conversion of the notes, exercisable
 until the fifth anniversary of November 8, 2006 at an original initial
 exercise price equal to $11.00 per share (subject to adjustment). The
 Conversion and exercise prices of the notes and warrants, respectively have
 been reduced in connection with the restructuring described below under the
 caption Amendments.                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The notes bear interest at
 a rate per annum equal to LIBOR plus the applicable margin then in effect.
 Originally, applicable margins per annum range from 2.75% to 3.75% subject to
 the condition that the applicable margin shall not be less than 3.25% during
 the period from November 8, 2006 until the financial statements are delivered
 to the applicable holder after the fourth full fiscal quarter after the
 issuance date. The debt issuance cost at the date of closing amounted to
 approximately $6.4 million. The applicable margins were increased in
 connection with the restructuring described below under the caption
 Amendments.                                                                                                                                                                                                                                                                                                   

18

---



SUMMIT
GLOBAL LOGISTICS, INC. AND SUBSIDIARIES

NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company may redeem all
 or any portion of the notes on or after the third anniversary of the issuance
 of the notes, if the closing sale price of our common stock is greater than
 180% of the conversion price then in effect for each of the previous 20
 trading days ending and certain other conditions are satisfied. A holder may
 require the Company to redeem the notes on an event of default or upon a
 change of control, in each case at a premium over the principal amount of the
 notes being redeemed. The premium in the event of a default is the greater of
 (x) the product of (i) the conversion amount to be redeemed together with
 accrued interest and unpaid interest and late charges, if any are incurred up
 to and including the conversion date, in respect of such conversion amount,
 and (ii) the Redemption Premium, as defined (ranging from 100% to 120%), or,
 (y) the product of (a) the closing sale price of the common stock on the date
 immediately preceding such event of default multiplied by (b) the number of
 shares of common stock into which the amount set forth in clause (x) would
 have converted. The premium in the event of a change of control is equal to a
 product of the amount of principal being redeemed multiplied by the greater
 of (a) the quotient of the closing sale price of our common stock immediately
 prior to the announcement of the change of control divided by the conversion
 price and (b) 120% in the first eighteen months, then 115% in the period from
 eighteen to forty-two months and 110% thereafter.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | The convertible notes are
 secured by substantially all of our assets and are subordinate to our senior
 secured credit facility.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | The inter-creditor
 agreement between our senior secured creditor and the convertible note
 holders prohibits the convertible note holders from receiving payments from
 the Company other than regularly scheduled principal and interest payments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Amendments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | On May 21, 2007, as part
 of restructuring of the Companys debt, the Company restructured the terms of
 the existing $65 million of secured convertible notes and accompanying
 warrants. After the restructuring the convertible notes are now convertible
 at the option of the holder into shares of the Companys common stock at an
 initial conversion price equal to $5.50 per share (subject to adjustment) and
 the warrants are exercisable at any time prior to November 8, 2011 at an
 initial exercise price equal to $5.50 per share (subject to adjustment).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | The convertible notes bear
 interest at a rate per annum equal to LIBOR plus the applicable margin then
 in effect. As of May 21, 2007, the applicable margins on the convertible
 notes range from 3.50% to 4.50% per annum subject to the condition that the
 applicable margin shall not be less than 4.50% during the period from May 21,
 2007 until the financial statements are delivered to the applicable holder
 after the fourth full fiscal quarter after November 8, 2006. Further, the
 interest payment for the five (5) consecutive calendar quarters on the
 convertible notes commencing with the quarter ended June 30, 2007 is not
 payable until the earlier of the maturity date, November 8, 2011, or the date
 on which the notes are converted to common stock of the Company. In
 connection with the restructuring, holders of the notes waived their then
 existing penalties pursuant to the registration rights agreement relating to
 the Companys failure to cause the shares of common stock underlying the
 convertible notes and warrants to become registered and extended the deadline
 for causing such shares to be registered. The debt issuance cost at the
 closing date amounted to approximately $2.6 million.                                                                                                                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | The agreement required the
 Company to file an amended registration statement with the Securities and
 Exchange Commission within 30 days of the date of the amendment and for the
 registration statement to become effective within 90 days from the date of
 filing. This registration statement (Registration Statement) was
 filed on a timely basis in compliance with the Agreements. The Agreements also
 required us to cause the Registration Statement to be effective under the Securities
 Act of 1933 (Act) by September 18, 2007. The Registration
 Statement is not yet effective under the Act.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Under the
 terms of the Agreements, we are required to pay liquidated damages in the
 event that the Registration Statement was not declared effective under the
 Act on or before September 18, 2007. Such payment is a percentage of the
 aggregate amount invested: one percent (1%) per month ($1.2 million),
 prorated on a daily basis for the first 30 days after September 18, 2007, and
 two percent (2%) per month ($2.4 million), prorated on a daily basis for each
 thirty day period thereafter, subject to a 10% aggregate limit ($11.8
 million). Our failure to cause the Registration Statement to be declared
 effective under the Act by the prescribed date also constituted an event of
 default under the credit documents with the note holders and our senior
 secured lenders (by virtue of cross default provisions). This event of default
    was also waived. (See Note 16 - Subsequent Events.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | We are currently incurring a penalty at the rate of
 approximately $78,000 a day (or approximately $2.4 million per month). We
 will continue to incur this penalty until such time as the Registration
 Statement is declared effective, subject to the $11.8 million aggregate cap.
 The incurring of these penalties has had and will continue to have a material
 adverse effect on our results of operations and financial condition.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | While the Registration Rights Agreements require us to pay
    the penalties in cash, we intend to request that our note holders and common
    stock holders who are entitled to the penalty payments accept payment in
    the form of convertible notes, as was done in connection with our restructuring
    in May, 2007. However, there is no assurance that such persons will be amenable
    to accepting convertible notes in lieu of the cash payments to which they
    are entitled.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

| |                                                                                                                                                                                                                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In connection with the
 restructuring, the exercise price of the warrants was reduced from $11.00 to
 $5.50 per share.                                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                       
| | The Company failed to meet
 certain financial and other covenants contained in the convertible note documents
 at September 30, 2007. In November 2007, effective as of the dates the events
    of default occurred, we obtained a waiver of all existing events of default
    from the convertible note holders. (See Note 16 - Subsequent Events.)

19

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(UNAUDITED)

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | New Additional Convertible Notes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | Private Placement of Convertible Notes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | In
  connection with the restructuring on May 21, 2007, we also completed a
  private placement of senior secured convertible notes and warrants resulting
  in $15 million in new money from the existing convertible note holders and
  certain members of management. Of the $15 million in convertible notes, we
  sold $12.5 million to existing convertible note holders. This $12.5 million
  was added pro rata to the principal amount of each holders restructured
  convertible note. In connection with the sale of the convertible notes we
  issued new warrants (exercisable for up to 50% of the number of shares of
  common stock issuable upon conversion of the notes), which have substantially
  the same terms as the restructured warrants.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | An aggregate
  default interest payment of $400 in connection with a failure to deliver
  timely our quarterly financial statements was added pro rata to the principal
  amount of the convertible notes in lieu of paying such interest in cash and
  will be payable on the earlier of November 8, 2011 or the date on which the
  notes are converted to common stock of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | We sold $2.5
  million of the $15 million additional convertible notes and warrants on
  substantially the same terms to members of our management. We may also issue
  up to $2.0 million of additional convertible notes and warrants to certain of
  our professionals in satisfaction of fees that we owe them. The new
  convertible notes are convertible at the option of the holder into shares of
  our common stock at an initial conversion price equal to $5.50 per share
  (subject to adjustment) and the new warrants, which are exercisable until
  November 8, 2011 at an initial exercise price equal to $5.50 per share
  (subject to adjustment). The new convertible notes bear interest at a rate
  per annum equal to LIBOR plus the applicable margin then in effect. As of May
  21, 2007, the applicable margins on the restructured convertible notes per
  annum range from 3.50% to 4.50% subject to the condition that the applicable
  margin shall not be less than 4.50% during the period from May 21, 2007 until
  the financial statements are delivered for the quarter ended December 31,
  2007. Further, the interest payment on the new convertible notes for the five
  (5) consecutive calendar quarters commencing on the quarter ended September
  30, 2007 is not payable until the earlier of the maturity date, May 21, 2012
  for the new convertible notes, or the date on which the notes are converted
  into our common stock. We may redeem all or any portion of the restructured
  convertible notes and the new notes on or before May 21, 2010, if the closing
  sale price of our common stock is greater than 180% of the conversion price
  then in effect for each of the previous 20 trading days and certain other
  conditions are satisfied, as opposed to November 8, 2006 as set out in the
  original notes.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | The
  convertible notes are secured by substantially all of our assets and are
  subordinate to our senior secured credit facility.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | While the Company
  failed to meet certain financial covenants contained in the convertible note
  documents at September 30, 2007 the Company has obtained waivers of all existing
    defaults and a revision of the financial covenants, as discussed elsewhere
    herein. (See Note 16 - Subsequent Events.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | Accrued Registration Rights Penalties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | Convertible Notes and Warrants. In exchange
  for $2 million of restructured convertible notes, the holders of the
  convertible notes waived then existing penalties pursuant to the registration
  rights agreement relating to our failure to cause the shares of our common
  stock underlying the convertible notes and warrants to become registered and
  extended the deadline for causing such shares to be registered. A portion of
  this $2 million was added to the principal amount of each holders
  restructured convertible note. Interest is payable at the same rate as the
  convertible notes. The agreement calls for the Company to file an amended
  registration statement with the Securities and Exchange Commission within 30
  days of the amendment (which was filed on June 20, 2007) and for the
  registration statement to become effective within 90 days from the date of
  filing (September 18, 2007). As described above, this Registration
  Statement was filed on a timely basis in compliance with the Agreements. The
  Agreements also required us to cause the Registration Statement to be effective
  under the Act by September 18, 2007. The Registration Statement is not yet
  effective under the Act. Consequently, we are incurring substantial cash
  penalties, as described above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | While the Registration Rights Agreements require
      us to pay the penalties in cash, we intend to request that our note holders
      and common stock holders who are entitled to the penalty payments accept
      payment in the form of convertible notes, as was done in connection with
      our restructuring in May, 2007. However, there is no assurance that such
      persons will be amenable to accepting convertible notes in lieu of the
    cash payments to which they are entitled.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

20

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(UNAUDITED)

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | Private Placement Notes. On May 21, 2007, in
  connection with the restructuring of the debt of the Company, a majority of
  the holders of the common stock of the Company agreed to waive certain
  penalties pursuant to the registration rights agreement relating to the
  Companys failure to cause certain shares of common stock and shares of
  common stock underlying warrants to become registered and extended the
  deadline for causing such shares to be registered, in exchange for all of the
  participants in the Companys prior private placement of common stock
  receiving pro rata unsecured convertible notes in the aggregate principal
  face amount of $1 million (classified in the unaudited condensed consolidated
  balance sheet as of September 30, 2007 as convertible notes).
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The
  unsecured convertible notes are convertible at the option of the holder into
  shares of the Companys common stock at an initial conversion price equal to
  $5.50 per share (subject to adjustment). There are no financial covenant
  requirements and there are only limited reporting requirements in conjunction
  with the unsecured convertible notes. Interest is payable at the same rate as
  the convertible notes.                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|9. | FAIR VALUE OF DERIVATIVE INSTRUMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Fair value
  of derivative instruments consisting of compound embedded derivatives within
  the convertible notes and warrants issued in connection with the note
  financing and common stock financing was calculated using a lattice model
  utilizing discounted cash flows and Black-Scholes models utilizing weighted
  average exercise prices. The following primary assumptions were used:                                                                                                                                                                                                                                                                                                                                                                                                                 

| |  |   |                                                                                                                                                                                                   
| |  | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |  | Stock growth
  of 15%.                                                                                                                                                                            
| |  |   |                                                                                                                                                                                                   
| |  |  | Annual
  volatility of 50%.                                                                                                                                                                       
| |  |   |                                                                                                                                                                                                   
| |  |  | Note default
  of 5% increasing 0.1% per quarter and 95% near term for one quarter.                                                                                                               
| |  |   |                                                                                                                                                                                                   
| |  |  | Alternative
  financing available of 0% initially, increasing 1% per quarter to a maximum
  of 10%.                                                                                               
| |  |   |                                                                                                                                                                                                   
| |  |  | Conversion
  pricing and exercise reset events occurring 10% of the time resulting in a
  weighted average conversion price of $5.467 and the warrant exercise price
  adjustment factor of 0.956.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The
  valuations of the embedded derivatives within the convertible notes and
  investor warrants at the effective date of issuance are recorded as a
  discount to the face value of the convertible notes. The registration rights
  contingent liability of $3,869 was recorded for the near term default for the
  period ending September 30, 2007. The discount is amortized over the life of
  the notes using an effective interest method. In addition, the value of the
  warrants issued to the placement agent was recorded as deferred financing
  costs in the amount of $1,429 and is expensed over the life of the note using
  an effective interest method. The warrants issued in connection with the common
  stock financing were valued at $7,361 on November 8, 2006. These derivative
  liabilities were fair valued as of September 30, 2007 as follows:

|                                                             |  |                                  |        |                   |   |        | 
|------------------------------------------------------------ |  | -------------------------------- | ------ | ----------------- | - | ------ | 
|                                                             |  | (IN THOUSANDS)                   |       
|                                                             |  | September 30, 2007
  (Unaudited) |        | December 31, 2006 |  
|                                                             |  |                                  |        |                   |  
|                                                             |  |                                  |        |                   |   |       
|                                                             |  |                                  |        |                   |   |        | 
|Compound embedded derivatives within the
  convertible notes |  | $                                | 28,938 |                   | $ | 17,162 | 
|Warrants attached to convertible notes                       |  |                                  | 10,349 |                   |   | 7,747  | 
|Warrants attached to common shares                           |  |                                  | 3,599  |                   |   | 7,239  | 
|                                                             |  |                                  |        |                   |   |        | 
|                                                             |  | $                                | 42,886 |                   | $ | 32,148 | 
|                                                             |  |                                  |        |                   |   |        | 

| | 
| | 

21

---



SUMMIT GLOBAL LOGISTICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(UNAUDITED)

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10. | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | As of
  December 31, 2006, the Company owed three shareholders a total of $844
  related to the acquisition and reimbursement of certain monies received on
  their behalf. This amount was reported as due to related parties on the
  consolidated balance sheet. These amounts were paid in full during the nine
  months ended September 30, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | Pursuant to
  the purchase agreement to acquire SLHL, the seller was required to loan the
  Company $2,000. As of September 30, 2007, the seller has loaned the Company
  $2,000. The loan is noninterest-bearing and payable after five years. This
  amount is reported as loan payable, related party on the unaudited condensed
  consolidated balance sheet.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|11. | 401(k)/PROFIT-SHARING PLAN                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | The Company
  has a 401(k) Profit Sharing Plan (the Plan), covering all eligible
  employees, as defined in the Plan. The Plan provides for employees
  contributions based on a percentage of covered employees salaries. The
  Company may contribute to the Plan matching contributions and discretionary
  profit sharing contributions. The Company approved a matching contribution
  equal to 25% of the employees contribution to the extent aggregate contributions
  did not exceed 4% of the employees compensation and additional profit
  sharing contributions. The 401(k) profit sharing expense was $31 and none for
  the three months ended September 30, 2007 and 2006, respectively, and $77 and
  none for the nine months ended September 30, 2007 and for the period from
  February 6, 2006 (date of inception) to September 30, 2006, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|12. | OPTIONS AND RESTRICTED COMPENSATION AGREEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | On November
  8, 2006, the Company established the 2006 Equity Incentive Plan (2006 Plan)
  which provides for the granting of incentive stock options, nonqualified
  stock options, stock appreciation rights (SARs), performance shares,
  restricted stock, restricted stock units and other common stock based awards
  to our employees, officers, directors, consultants, independent contractors
  and advisors of the Company and any other person who is determined by the
  Compensation Committee or the Board of Directors to have made (or is expected
  to make) contributions to the Company. The maximum number of shares available
  for issuance under the 2006 Plan as of September 30, 2007 is 1,634 shares. As
  of September 30, 2007, the Board of Directors have authorized the issuance of
  options to purchase 1,175 shares of common stock, of which 940 are
  outstanding, and the issuance of 234 shares of restricted stock under the
  2006 Plan. As of September 30, 2007, the Company granted 667 SARs as
  additional compensation. These options and SARs have been granted with an
  exercise price equal to $10 per share. The options have a 5-year term with
  full vesting ranging from two to three years. The issued restricted
  compensation shares are held in escrow and have an exercise price of $.001
  per share with a vesting rate and period of fifty percent in the second year
  and fully vested in the third year. Stock-based compensation expense was $454
  and none for the three months ended September 30, 2007 and 2006,
  respectively, and $1,708 and none for the nine months ended September 30,
  2007 and the period from February 6, 2006 (date of inception) to September
  30, 2006, respectively, and is included in general and administrative
  expenses.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | Stock options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | In April
  2007, the Board of Directors, on the recommendation of the Compensation
  Committee, approved an amendment of the Companys 2006 Equity Incentive Plan
  to increase by 250 the number of shares of the common stock of the Company
  issuable to employees and prospective employees under the plan. In May 2007,
  the Stockholders of the Company approved this amendment to the Companys 2006
  Equity Incentive Plan at the Companys Annual Meeting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

22

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(UNAUDITED)

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|13. | INCOME TAXES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | Effective
  January 1, 2007, the Company adopted FIN 48, and, as of September 30, 2007,
  the Company does not have a liability for unrecognized tax benefits.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | The Company
  files income tax returns in the U.S. federal jurisdiction and various states.
  All federal and state tax filings for the Company as of December 31, 2006
  have been timely filed. The Company, because of the acquisitions, is subject
  to U.S. federal or state income tax examinations by tax authorities for years
  after 2003. During the periods open to examination, the Company has net
  operating loss (NOL) carryforwards for U.S. federal and state tax purposes
  that have attributes from closed periods. Since these NOL carryforwards may
  be utilized in future periods, they remain subject to examination.                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | The
  Companys policy is to record interest and penalties on uncertain tax
  provisions as income tax expense. As of September 30, 2007, the Company has
  no accrued interest or penalties related to uncertain tax positions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | The income
  tax benefit effective tax rate differs from the statutory federal income tax
  rate of 34% due to permanent differences and state income taxes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|14. | LEASE COMMITMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | The Company
  leases various facilities and equipment in accordance with non-cancelable
  operating lease agreements, which expire at various dates through 2012. Total
  rent expense (net of sublease income) was $4,222 and $12 for the three months
  ended September 30, 2007 and 2006, respectively, and $12,084 and $27 for the
  nine months ended September 30, 2007 and for the period from February 6, 2006
  (date of inception) to September 30, 2006, respectively. The amount of
  sublease income recorded as an offset to rental expense was $894 and none for
  the three months ended September 30 2007 and 2006, respectively, and $2,199
  and none for the nine months ended September 30, 2007 and for the period from
  February 6, 2006 (date of inception) to September 30, 2006, respectively.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | The Company
  has capital lease obligations with financial institutions, with monthly
  installments of principal, including interest at various rates ranging from
  4.3% to 12.1% through 2010, collateralized by equipment. As of September 30,
  2007, future minimum lease payments required under non-cancelable leases are
  as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

|                                                     |  |                |                  |   |                    |        |   |        | 
|---------------------------------------------------- |  | -------------- | ---------------- | - | ------------------ | ------ | - | ------ | 
|                                                     |  | (IN THOUSANDS) |                 
|                                                     |  |                |                  |  
|Year ending
  December 31,                           |  |                | Capital
  leases |   | Operating
  leases |       
|                                                     |  |                |                  |   |                    |       
|2007                                                 |  |                |                  | $ | 242                |        | $ | 3,674  | 
|2008                                                 |  |                |                  |   | 867                |        |   | 13,815 | 
|2009                                                 |  |                |                  |   | 323                |        |   | 11,806 | 
|2010                                                 |  |                |                  |   | 34                 |        |   | 9,482  | 
|2011                                                 |  |                |                  |   |                    |        |   | 7,019  | 
|Thereafter                                           |  |                |                  |   |                    |        |   | 5,653  | 
|                                                     |  |                |                  |   |                    |        |  
|Total future minimum lease payments                  |  |                | 1,466            |   | $                  | 51,449 |  
|                                                     |  |                |                  |   |                    |        |  
|Less - Amount representing interest                  |  |                | (98              | ) |                    |        |  
|                                                     |  |                |                  |   |                    |        |  
|Present value of future net minimum lease
  payments |  | $              | 1,368            |   |                    |        |  
|                                                     |  |                |                  |   |                    |        |  

23

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(UNAUDITED)

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|15. | OTHER COMMITMENTS AND CONTINGENCIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | Registration Commitments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | The Company
  entered into a registration rights agreement with the buyers of the common
  shares in the private placement and convertible notes to provide certain
  registration rights with respect to the common stock underlying the warrants
  and the convertible notes and the shares held by management and certain
  security holders of the Company by April 9, 2007. The Company failed to
  register the common stock, and to obtain an extension of the deadline to
  September 18, 2007, paid the holders of the notes and warrants $3 million in
  the form of new convertible debt. The company failed to meet the September
  18, 2007 registration rights agreement and consequently, is obligated to pay
  the buyers of the common shares in the private placement and convertible
  notes substantial penalty payments. The company recorded a liability of
  $3,869 during the three months ended September 30, 2007. See Note 8
  Convertible Notes.                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | Contingent Payments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | In
  connection with the acquisitions, as additional purchase price, the Company
  has contractual commitments to make earn-out payments to former shareholders
  of TUG and SHLI based upon agreed target levels. In addition, there are
  contingent earn-out payments based upon achievement above the targets. The
  TUG earn-outs are based upon agreed EBIT (earnings before interest and taxes)
  targets over a period of five years. The estimated TUG earn-out is
  approximately $6 million. The SHLI earn-outs are based on a payment of 65% of
  projected EBITDA (earnings before interest, taxes and depreciation) in year
  one, two and three. After year three, the SHLI enterprise value will be
  determined based upon the average of the first three years EBITDA, multiplied
  by six. Any payments made from inception, and the value of the shares owned
  by the selling stockholder of SHLI valued at the fair market value at end of
  year three, will be deducted from the enterprise value calculated above. Any
  remaining balance due will be paid in cash in years four and five. The
  estimated SHLI earn-out is approximately $15 million. Additional earn-out
  payments will be recorded as goodwill.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | In the event of a change in control,
  the selling shareholders of TUG will receive their estimated unrealized
  earn-out payments in cash and stock and a pro rata amount thereof if the
  change in control occurs prior to November 8, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | In the event
  of a change in control, the principal selling shareholder of SHLI will
  receive its unrealized earn-out payment provided, that, if the change in
  control occurs within three years of the date of consummation of the
  acquisition, it shall receive six times the three year average EBITDA (as
  defined in the SHLI stock acquisition agreement) of SHLI, less any prior
  earn-out payments. The Company has contractual obligations to make contingent
  bonus payments to certain of TUG and continuing key employees based on EBIT
  targets set forth in three separate bonus agreements with the employees over
  a period of five years. The payments under the employees bonus agreements
  will be recorded as compensation.
The Company
  also has contractual obligations to pay contingent bonuses to certain key
  employees in accordance with their bonus agreements under the Management
  Incentive Plan based upon agreed target levels.                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | Reserve for Insurance Losses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | The Company
  participates in a high deductible insurance program for certain insurable
  risks consisting primarily of automobile, workers compensation, general
  liability and health insurance. Based on estimates of the aggregate liability
  for claims incurred, a provision for the deductible portion of the claims is
  recorded and revised annually. These losses are collateralized by restricted
  cash balances and letters of credit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | Shipping Agreements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | The Company
  entered into agreements with unrelated ocean carriers for the Company to
  receive commission revenue based on certain minimum volume levels and to
  protect various ocean shipping rates for the duration of the contract. These
  agreements expire December 31, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|16. | SUBSEQUENT EVENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | In November, 2007 the Company received conditional
      permission by governmental authorities in Shanghai, Peoples Republic of
      China, to acquire SeaMaster Logistics (China) Ltd (aka Young Jet International
      Logistics, Inc.) through its wholly-owned Chinese subsidiary, SeaMaster
      Logistics (Shanghai) Ltd. The Company is completing this process with local
      governmental authorities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|    | On November 19, 2007, the Company received from
      its senior secured lenders waivers of all existing defaults under its senior
      secured credit facility, in exchange for which, the Company, among other
      terms and conditions, agreed to (i) pay the senior lender a $250 cash amendment
      fee and (ii) an increase in the interest rates on certain types of loans.
      The senior secured lender also agreed to reset the financial covenants
      relating to EBITDA and the Fixed Charge Coverage Ratio (in each case, as
    defined).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|    | Additionally, on November 19, 2007, the Company
      received from its senior secured note holders waivers of all existing defaults
      under its senior secured convertible notes, in exchange for which, the
      Company, among other terms and conditions, agreed to the following: to
      pay the note holders $250 in the form of additional notes; to use its
      best efforts to cause two persons nominated by a certain note holder to
      be appointed to its board of directors; and, effective November 23, 2007,
      to increase the interest rate on the notes, by 150 basis points, and reduce
      the conversion price of the notes and exercise price of the warrants associated
      with the notes from $5.50 per share to $3.00 per share. The senior secured
      note holders also agreed to reset the financial covenants relating to EBITDA
      and the Fixed Charge Coverage Ratio (in each case, as defined).                                                                                                                                                                                                                                                                                   

24

---



Item I. Financial Statements - Predecessor
Companies

FMI HOLDCO I
LLC AND SUBSIDIARY

CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)

(IN THOUSANDS)

|                                        |  |                                            |        |                                           |   |        |  
|--------------------------------------- |  | ------------------------------------------ | ------ | ----------------------------------------- | - | ------ | -
|                                        |  | Three
  Months
  EndedSeptember
  30, 2006 |        | Nine
  Months
  EndedSeptember
  30, 2006 |  
|                                        |  |                                            |        |                                           |  
|Revenues                                |  | $                                          | 32,038 |                                           | $ | 84,748 |  
|                                        |  |                                            |        |                                           |   |        |  
|Expenses                                |  |                                            |        |                                           |   |        |  
|Direct expenses, excluding depreciation |  |                                            | 24,628 |                                           |   | 65,363 |  
|Facility shutdown and other costs       |  |                                            | 78     |                                           |   | 163    |  
|Depreciation and amortization           |  |                                            | 1,130  |                                           |   | 3,389  |  
|General and administrative              |  |                                            | 2,874  |                                           |   | 8,940  |  
|                                        |  |                                            |        |                                           |   |        |  
|Income from operations                  |  |                                            | 3,328  |                                           |   | 6,893  |  
|                                        |  |                                            |        |                                           |   |        |  
|                                        |  |                                            |        |                                           |   |        |  
|Other income (expense)                  |  |                                            |        |                                           |   |        |  
|Interest income                         |  |                                            | 6      |                                           |   | 32     |  
|Interest expense and bank fees          |  |                                            | (1,378 | )                                         |   | (4,247 | )
|                                        |  |                                            |        |                                           |   |        |  
|                                        |  |                                            | (1,372 | )                                         |   | (4,215 | )
|                                        |  |                                            |        |                                           |   |        |  
|                                        |  |                                            |        |                                           |   |        |  
|Income before income taxes              |  |                                            | 1,956  |                                           |   | 2,678  |  
|                                        |  |                                            |        |                                           |   |        |  
|Income taxes                            |  |                                            | 0      |                                           |   | 90     |  
|                                        |  |                                            |        |                                           |   |        |  
|                                        |  |                                            |        |                                           |   |        |  
|Net income                              |  | $                                          | 1,956  |                                           | $ | 2,588  |  
|                                        |  |                                            |        |                                           |   |        |  

See accompanying notes to Condensed
Consolidated Statement of Operations.

25

---



FMI HOLDCO I LLC AND SUBSIDIARY

CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)

NINE MONTHS ENDED SEPTEMBER 30, 2006

(IN THOUSANDS)

|                                                                                   |  |   |        |  
|---------------------------------------------------------------------------------- |  | - | ------ | -
|Cash flows from operating activities                                               |  |   |        |  
|Net income                                                                         |  | $ | 2,588  |  
|Adjustments to reconcile net income to net
  cash provided by operating activities |  |   |        |  
|Provision for doubtful accounts                                                    |  |   | 210    |  
|Depreciation                                                                       |  |   | 1,314  |  
|Amortization of intangibles                                                        |  |   | 2,074  |  
|Gain on disposition of fixed assets                                                |  |   | (10    | )
|Changes in assets and liabilities                                                  |  |   |        |  
|Accounts receivable                                                                |  |   | (2,638 | )
|Prepaid expenses and other current assets                                          |  |   | (403   | )
|Deposits                                                                           |  |   | (239   | )
|Deferred rent                                                                      |  |   | (247   | )
|Reserve for self insurance                                                         |  |   | (348   | )
|Accounts payable and accrued expenses                                              |  |   | 1,500  |  
|                                                                                   |  |   |        |  
|Net cash provided by operating activities                                          |  |   | 3,801  |  
|                                                                                   |  |   |        |  
|Cash flows from investing activities                                               |  |   |        |  
|Acquisition of property and equipment                                              |  |   | (662   | )
|                                                                                   |  |   |        |  
|Cash flows from financing activities                                               |  |   |        |  
|Repayment of long-term debt and capital
  lease obligations                        |  |   | (3,474 | )
|Prepayment of senior debt pursuant to
  excess cash flow agreement                 |  |   | (499   | )
|Debt issuance costs                                                                |  |   | (41    | )
|Equity contributions (distributions)                                               |  |   | (83    | )
|                                                                                   |  |   |        |  
|Net cash used in financing activities                                              |  |   | (4,097 | )
|                                                                                   |  |   |        |  
|Net increase in cash and cash equivalents                                          |  |   | (958   | )
|                                                                                   |  |   |        |  
|Cash and cash equivalents, beginning of period                                     |  |   | 1,580  |  
|                                                                                   |  |   |        |  
|Cash and cash equivalents, end of period                                           |  | $ | 622    |  
|                                                                                   |  |   |        |  

See accompanying notes to Condensed
Consolidated Statement of Cash Flows.

26

---



FMI HOLDCO I LLC AND SUBSIDIARY

NOTES TO
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND CASH FLOWS
(UNAUDITED)

|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1   - | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|      | Principles of Consolidation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|      | The
  accompanying unaudited condensed consolidated financial statements include
  the accounts of FMI Holdco I LLC and its wholly-owned subsidiary, FMI
  International LLC (collectively, the Company or FMI). All intercompany
  balances and transactions have been eliminated in consolidation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|      | Nature of Business                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|      | The Company
  is a full-service logistics and supply chain management service provider to
  the retail industry. The Company offers ocean and air freight forwarding;
  local trucking services in the New York and Los Angeles metropolitan markets;
  line haul truck load services throughout the continental 48 states; and
  warehousing, consolidation, distribution and marketing services in the New
  York, Los Angeles and Miami markets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|      | Use of Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|      | Management
  uses estimates and assumptions in preparing financial statements. Those
  estimates and assumptions affect the reported amounts of assets and
  liabilities, the disclosure of contingent assets and liabilities, and
  reported revenues and expenses. Actual results could differ from those
  estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|      | Revenue Recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|      | Revenue is
  recognized as services are rendered to customers and collection is reasonably
  assured.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|      | Cash and Cash Equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|      | For purposes
  of the statement of cash flows, the Company considers all highly liquid
  investments with a maturity of three months or less when purchased to be cash
  equivalents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|      | Concentration of Credit Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|      | The Company,
  at times, has balances with financial institutions in excess of the FDIC
  limits. The Company limits the amount of exposure with any one financial
  institution and believes that no significant concentration of investment risk
  exists with respect to cash or cash equivalents.Financial instruments that
  potentially subject the Company to credit risk consist principally of trade
  receivables. The Company extends credit to a substantial number of its
  customers and performs ongoing credit evaluations of those customers
  financial condition while generally requiring no collateral.At September 30,
  2006, approximately 24% and 10% of accounts receivable are due from two
  customers.The Company generated approximately 22% and 13% of its revenue for
  the three months ended September 30, 2006 and 20% and 13% of its revenues for
  the nine months ended September 30, 2006 from two customers.
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|      | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|      | In lieu of
  federal corporation income taxes, the members of an LLC include their
  proportionate share of the Companys taxable income or net operating loss in
  their individual income tax returns. Certain minimum state taxes have been
  recorded for the period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

27

---



FMI HOLDCO I LLC AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND CASH FLOWS
(UNAUDITED)

|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2   - | 401(k)/PROFIT-SHARING PLAN                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|      | The
  Companys 401(k)/profit-sharing plan covers substantially all eligible
  full-time employees. Employer contributions for the 401(k) portion are $0.25
  per $1.00 for participating employees up to 4% of salary, while employer
  contributions for the profit-sharing portion are discretionary. Contributions
  for the three and nine months ended September 30, 2006 were approximately
  $100 and $300, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|3   - | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|      | The Company
  paid to KRG Capital (KRG) $109 for the three months ended September 30,
  2006 and $324 during the nine months ended September 30, 2006. These fees
  were ongoing financial and managerial consulting fees. KRG has a controlling
  interest in FMI Holdco I LLC. In 2004, certain members purchased the Carteret
  facility and assumed the existing lease, which expires in 2014. Payments to
  the members under this lease totaled $931 for the nine months ended September
  30, 2006. On June 29, 2006, the Carteret facility was sold to an unrelated
  entity, with the present lease remaining in place.                                                                                                                                                                                                                                                                                                                             
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|4   - | FACILITY SHUTDOWN                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|      | In 2004,
  management approved a plan (the Plan) to shut down a warehouse facility in
  an effort to improve operating efficiencies. The Plan provided for the
  closing of its Carson, California warehouse. The Plan expenses include
  impairment of fixed assets and lease costs (net of estimated sublease
  rentals) related to the shutdown of the facility. Effective April 1, 2005,
  the Company entered into a sublease agreement with a third party to occupy
  the entire facility through July 2007, the termination date of the underlying
  lease. In accordance with SFAS 146, Accounting for Costs Associated with
  Exit or Disposal Activities, plan expenses are recorded net of sublease
  payments as of July 1, 2004 (the cease-use date). The Company incurred an
  additional expense of approximately $78 and $163 for the three and the nine
  months ended September 30, 2006 respectively related to the facility
  shutdown.
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|5   - | PRO FORMA CORPORATION INCOME TAX PROVISION (UNAUDITED)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|      | FMI Holdco I
  LLC and Subsidiary is not subject to federal corporation income taxes being
  an LLC. For information purposes, if the Company was subject to taxes as a
  C-Corporation status, we expect the effective tax rate for tax provision
  purposes to be approximately 40%. As a result, our income before income
  taxes, provision for income taxes and net income on a pro forma basis would
  be as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

|                           |  |                                            |       |                                           |   |       | 
|-------------------------- |  | ------------------------------------------ | ----- | ----------------------------------------- | - | ----- | 
|                           |  | (IN
  THOUSANDS)                           |      
|                           |  |                                            |      
|                           |  | Three
  Months
  EndedSeptember
  30, 2006 |       | Nine
  Months
  EndedSeptember
  30, 2006 |  
|                           |  |                                            |       |                                           |  
|Income before income taxes |  | $                                          | 1,956 |                                           | $ | 2,678 | 
|                           |  |                                            |       |                                           |   |       | 
|Income taxes               |  |                                            | 782   |                                           |   | 1,071 | 
|                           |  |                                            |       |                                           |   |       | 
|                           |  |                                            |       |                                           |   |       | 
|Net income                 |  | $                                          | 1,174 |                                           | $ | 1,607 | 
|                           |  |                                            |       |                                           |   |       | 

28

---



TUG LOGISTICS,
INC. AND AFFILIATES

CONDENSED
COMBINED STATEMENTS OF OPERATIONS 
(UNAUDITED)

(IN THOUSANDS)

|                                       |  |                                         |        |                                        |   |        | 
|-------------------------------------- |  | --------------------------------------- | ------ | -------------------------------------- | - | ------ | 
|                                       |  | Three Months
 Ended
 September 30, 2006 |        | Nine Months
 Ended
 September 30, 2006 |  
|                                       |  |                                         |        |                                        |  
|Net sales                              |  | $                                       | 25,268 |                                        | $ | 66,292 | 
|                                       |  |                                         |        |                                        |   |        | 
|Cost of sales                          |  |                                         | 23,163 |                                        |   | 59,892 | 
|                                       |  |                                         |        |                                        |   |        | 
|Gross profit                           |  |                                         | 2,105  |                                        |   | 6,400  | 
|                                       |  |                                         |        |                                        |   |        | 
|Operating expenses                     |  |                                         |        |                                        |   |        | 
|General and administrative             |  |                                         | 1,727  |                                        |   | 4,167  | 
|Depreciation and amortization          |  |                                         | 8      |                                        |   | 29     | 
|                                       |  |                                         |        |                                        |   |        | 
|Operating expenses                     |  |                                         | 1,735  |                                        |   | 4,196  | 
|                                       |  |                                         |        |                                        |   |        | 
|Income from operations                 |  |                                         | 370    |                                        |   | 2,204  | 
|                                       |  |                                         |        |                                        |   |        | 
|Interest expense, less interest income |  |                                         | 3      |                                        |   | 15     | 
|                                       |  |                                         |        |                                        |   |        | 
|Income before income taxes             |  |                                         | 367    |                                        |   | 2,189  | 
|                                       |  |                                         |        |                                        |   |        | 
|Income taxes                           |  |                                         | 109    |                                        |   | 370    | 
|                                       |  |                                         |        |                                        |   |        | 
|                                       |  |                                         |        |                                        |   |        | 
|Net income                             |  | $                                       | 258    |                                        | $ | 1,819  | 
|                                       |  |                                         |        |                                        |   |        | 

See accompanying notes to the Condensed
Combined Statements of Operations.

29

---



TUG LOGISTICS, INC. AND AFFILIATES

CONDENSED
COMBINED STATEMENT OF CASH FLOWS 
(UNAUDITED)

NINE MONTHS ENDED SEPTEMBER 30, 2006

(IN THOUSANDS)

|                                                                                  |  |   |        |  
|--------------------------------------------------------------------------------- |  | - | ------ | -
|Cash flows from operating activities                                              |  |   |        |  
|Net income                                                                        |  | $ | 1,819  |  
|Adjustments to reconcile net income to net
 cash provided by operating activities |  |   |        |  
|Depreciation                                                                      |  |   | 29     |  
|Provision for doubtful accounts                                                   |  |   | 184    |  
|Changes in assets and liabilities                                                 |  |   |        |  
|Accounts receivable                                                               |  |   | (2,148 | )
|Prepaid expenses and other current assets                                         |  |   | 19     |  
|Accounts payable and accrued expenses                                             |  |   | 902    |  
|Income taxes payable                                                              |  |   | 417    |  
|                                                                                  |  |   |        |  
|Net cash provided by operating activities                                         |  |   | 1,222  |  
|                                                                                  |  |   |        |  
|Cash flows from investing activities                                              |  |   |        |  
|Notes receivable, related parties                                                 |  |   | 116    |  
|Acquisition of property and equipment                                             |  |   | (84    | )
|                                                                                  |  |   |        |  
|Net cash provided by investing activities                                         |  |   | 32     |  
|                                                                                  |  |   |        |  
|Cash flows from financing activities                                              |  |   |        |  
|Loan payable, bank                                                                |  |   | (300   | )
|Principal payments of long term debt and capital
 lease obligations               |  |   | (14    | )
|Proceeds from issuance of stock                                                   |  |   | 200    |  
|                                                                                  |  |   |        |  
|Dividends paid                                                                    |  |   | (144   | )
|                                                                                  |  |   |        |  
|Net cash used in financing activities                                             |  |   | (258   | )
|                                                                                  |  |   |        |  
|Net increase in cash, and cash equivalents,
 end of period                        |  |   | 996    |  
|                                                                                  |  |   |        |  
|                                                                                  |  |   |        |  
|Cash, beginning of period                                                         |  |   | 1,461  |  
|                                                                                  |  |   |        |  
|Cash, end of period                                                               |  | $ | 2,457  |  
|                                                                                  |  |   |        |  
|Supplemental cash flow disclosures                                                |  |   |        |  
|Interest paid                                                                     |  | $ | 6      |  
|Income taxes paid                                                                 |  | $ | 33     |  

See accompanying notes to the Condensed
Combined Statement of Cash Flows.

30

---



TUG LOGISTICS, INC. AND AFFILIATES

NOTES TO
CONDENSED COMBINED STATEMENTS OF 
OPERATIONS AND CASH FLOWS 
(UNAUDITED)

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ---------------------------------------------------------------------------------------------------
|1 - | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                    
|    | Description of Business                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                    
|    | TUG
 Logistics, Inc. and Affiliates (TUG or the Company) provide logistics
 services through four operating entities in the United States. TUG is
 headquartered in Los Angeles, California and utilizes over 40 agents in
 China, Taiwan, Hong Kong, Korea, Japan, Malaysia, Indonesia, Thailand,
 Singapore and the Philippines. TUG provides ocean, air, supply chain
 logistics, warehouse and distribution and customs brokerage services to its
 customers, as well as a full range of ocean transportation intermediary
 services, forwarding containers (primarily via ocean and air, but also bulk
 cargo) between Asia and the United States using multiple carriers. TUG is a
 Non-Vessel-Operating Common Carrier (NVOCC).
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                    
|    | TUGs four
 operating entities in the United States are:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  | TUG
 Logistics, Inc. (LAX) - a California based NVOCC and headquarters for all
 TUG operations   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  | TUG
 Logistics (Miami), Inc. (MIAMI) - a Miami based NVOCC                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  | Clare
 Freight, Los Angeles, Inc. (CLARE) - provides customs house brokerage
 services           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  | Glare
 Logistics Inc., Carson, California (GLARE) - provides warehouse and
 distribution services
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                    
|    | Principles of Combination                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                    
|    | The
 accompanying financial statements include the combined accounts of TUG
 Logistics, Inc. and Affiliates which are affiliated through common ownership.
 All significant intercompany balances and transactions have been eliminated
 in combination.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                    
|    | Revenue Recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                    
|    | Revenue is
 recognized upon discharge of freight at the port of destination.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                    
|    | Use of Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                    
|    | Management
 uses estimates and assumptions in preparing financial statements. Those
 estimates and assumptions affect the reported amounts of assets and
 liabilities, the disclosure of contingent assets and liabilities, and
 reported revenues and expenses. Actual results could differ from those
 estimates.                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                    
|    | Cash and Cash Equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                    
|    | The Company
 considers all highly liquid investments with a maturity of three months or
 less when purchased to be cash equivalents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                                                                    
|    | The
 Companys cash balances are maintained at several banks. The balances are
 insured by the Federal Deposit Insurance Corporation for up to an aggregate
 of $100 for each company for each bank. Balances in these accounts at times
 exceed the insured limit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

31

---



TUG LOGISTICS, INC. AND AFFILIATES

NOTES TO CONDENSED COMBINED STATEMENTS OF 
OPERATIONS AND CASH FLOWS 
(UNAUDITED)

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1 - | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | Depreciation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | Depreciation
 is provided using the straight-line method over estimated useful lives
 ranging from three to seven years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | LAX and
 CLARE have elected S Corporation status for federal and California income tax
 purposes. Under these elections, the taxable income or loss is reportable by
 the stockholders on their individual income tax returns and there are no
 provisions made for federal income tax. Provisions are made for applicable
 state income taxes. For information purposes, if the Company was subject to
 taxes as a C-Corporation status, we expect the effective tax rate for tax
 provision purposes to be approximately 40%. As a result, our income before
 income taxes, provision for income taxes and net income on a pro forma basis
 would be as follows:

|                           |  |                                         |     |                                        |   |       | 
|-------------------------- |  | --------------------------------------- | --- | -------------------------------------- | - | ----- | 
|                           |  | (IN THOUSANDS)                          |    
|                           |  |                                         |    
|                           |  | Three Months
 Ended
 September 30, 2006 |     | Nine Months
 Ended
 September 30, 2006 |  
|                           |  |                                         |     |                                        |  
|Income before income taxes |  | $                                       | 367 |                                        | $ | 2,189 | 
|                           |  |                                         |     |                                        |   |       | 
|Income taxes               |  |                                         | 147 |                                        |   | 876   | 
|                           |  |                                         |     |                                        |   |       | 
|                           |  |                                         |     |                                        |   |       | 
|Net income                 |  | $                                       | 220 |                                        | $ | 1,313 | 
|                           |  |                                         |     |                                        |   |       | 

| |                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------
| | MIAMI and
 GLARE are C corporations for federal income tax purposes and are also subject
 to state income taxes in various jurisdictions.

32

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

The following
discussion and analysis of the financial condition and results of operations
should be read in conjunction with the unaudited condensed consolidated
financial statements and the related notes appearing elsewhere in this report
and together with the Managements Discussion and Analysis of Financial
Condition and Results of Operations and the audited consolidated financial
statements and related notes thereto in our Form 10-K/A for the fiscal year
ended December 31, 2006.

FORWARD LOOKING STATEMENTS

This quarterly report
contains statements which constitute forward-looking statements within the
meaning of Section 21E of the Securities and Exchange Act of 1934, as amended.
These forward-looking statements generally relate to our strategies, plans and
objectives for future operations and are based on our current plans and beliefs
or estimates of future results or trends. Forward looking statements also involve
risks and uncertainties, including, but not restricted to, the risk and
uncertainties described in Item 1A of our Annual Report on Form 10-K/A for the
year ended December 31, 2006, and in our subsequent Quarterly Reports on Form
10Q, which could cause actual results to differ materially from those contained
in any forward-looking statement. Many of these factors are beyond our ability
to control or predict.

You should not place undue reliance on any
forward-looking statements which are based on current expectations. Further,
forward-looking statements speak only as of the date they are made, and we will
not update these forward-looking statements, even if our situation changes in
the future. We caution the reader that a number of important factors discussed
herein, and in other reports filed with the Securities and Exchange Commission,
could affect our actual results and cause actual results to differ materially
from those discussed in forward-looking statements.

Introduction

This managements discussion and analysis of
financial condition and results of operations is intended to provide investors
with an understanding of our financial condition, changes in financial
condition and results of operations. We will discuss and provide our analysis
in the following order:

| |   |                                                             
| | - | ------------------------------------------------------------
| |  | Consolidated
 and Predecessor Companies Financial Statements
| |   |                                                             
| |  | Discussion
 of Operating Results                            
| |   |                                                             
| |  | Liquidity
 and Capital Resources                            
| |   |                                                             
| |  | Off-Balance
 Sheet Arrangements                             
| |   |                                                             
| |  | Impact of
 Inflation                                        
| |   |                                                             
| |  | Critical
 Accounting Policies and Use of Estimates          
| |   |                                                             
| |  | Contractual
 Obligations                                    

Consolidated
and Predecessor Companies Financial Statements

We have
included in our filing the unaudited condensed consolidated statements of
operations for Summit Global Logistics Inc. (formerly Aerobic Creations Inc.)
and its subsidiary, Maritime Logistics US Holdings Inc., and its subsidiaries
(Maritime or MLI), TUG USA, Inc., Summit Logistics International, Inc., AMR
Investment Inc., Seamaster Logistics Inc., FMI Holdco I LLC, and their
subsidiaries (collectively, the Company, we, us, and/or our) for the
three and nine months ended September 30, 2007 and the three months ended
September 30, 2006 and the period from February 6, 2006 (date of inception) to
September 30, 2006 and the inclusion as of April 1, 2007 of Seamaster Logistics
(China) Ltd, our variable interest entity. Also included are separate unaudited
condensed consolidated statements of operations of FMI Holdco I LLC, and
Subsidiary (FMI); and separate unaudited condensed combined statements of
operations of TUG Logistics, Inc. and Affiliates (TUG), for the three and
nine months ended September 30, 2006 and separate unaudited condensed
consolidated statements of cash flows of FMI and TUG for the nine months ended September
30, 2006. FMI and TUG are each considered to be a predecessor company. Under
generally accepted accounting principles in the United States (GAAP), it is
not acceptable to combine their historical operations, as there was no common
control or management prior to the November 8, 2006 acquisition of these
companies. We believe the following discussion of operating results to be
acceptable for GAAP purposes and meaningful to understanding of our business.
The financial information presented is not necessarily indicative of the future
financial position or future results of operations of the consolidated
enterprise.

Acquisitions

The Company is
a reporting company under the Exchange Act, and its common stock is quoted on
the NASDs Over-the-Counter Bulletin Board. The Company was formed as a Nevada
corporation on February 25, 2004, under the name Aerobic Creations, Inc. The
Companys initial business plan was to produce and sell aerobics workout DVDs.

The Company
reincorporated as a Delaware corporation in August 2006 through a migratory
merger. Prior to the acquisition of MLI (which we refer to as the merger), the
Company did not have any meaningful business operations. Prior to the merger,
R&R Biotech

33

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Partners, LLC,
an affiliate of Rodman & Renshaw, LLC, the Companys placement agent, and
Arnold Kling, acquired shares of the Companys common stock in private
placements, both from then existing stockholders and directly from the Company,
as a result of which they became the owners of approximately 92.4% of its
issued and outstanding capital stock prior to the merger.

As a result of
the merger, MLI became a wholly-owned subsidiary of the Company and the
security holders of MLI received an aggregate of 1,451,000 restricted shares of
the Companys common stock representing approximately 85.5% of the Companys
outstanding common stock immediately after the merger and prior to the
financings. Accounting principles generally accepted in the United States
generally require that a company whose security holders retain the majority
voting interest in the combined business be treated as the acquirer for
financial reporting purposes. The acquisition was accounted for as a reverse
acquisition whereby MLI was deemed to be the accounting acquirer.
Additionally, upon the effectiveness of the merger, the Companys then existing
officers and directors were replaced by individuals associated with MLI. Upon
the effectiveness of the merger and prior to the financings and the
acquisitions, security holders holding 85.5% of the Companys then outstanding
common stock voted, by written consent, to amend and restate its certificate of
incorporation, to, among other things, change the Companys corporate name from
Aerobic Creations, Inc. to Summit Global Logistics, Inc. and effect the reverse
split, as described below. In addition, the Companys security holders voted to
approve certain executive compensation arrangements and to adopt a new stock
incentive plan and certain other benefit plans. On January 29, 2007, the
Company filed a definitive information statement with the Securities and
Exchange Commission under Regulation 14C of the Exchange Act with respect to
these stockholder consents. The actions taken by the consent became effective
on or around February 20, 2007, 20 days after mailing an information statement
in compliance with Regulation 14C to the Companys security holders.

After
completion of the merger, the Company joined the common stock financing, the
note financing and the senior credit facility agreements arranged by MLI. With
a substantial portion of the proceeds of the credit facility and the
financings, the Company and its subsidiaries acquired (i) FMI and one of its
parent companies; and, then (ii) certain of the assets or equity interests of
the TUG Logistics group of companies, including certain of the assets of TUG
Logistics, Inc., TUG Logistics (Miami), Inc. and Glare Logistics, Inc., as well
as all of the equity interests of Clare Freight, Los Angeles, Inc. and TUG New
York, Inc., which collectively we refer to as TUG. As a result, the former
security holders and employees of MLI, FMI and TUG own approximately 53.0% of
the Companys issued and outstanding common stock, the holders of common stock
issued in the common stock financing own approximately 43.8% of the Companys
issued and outstanding common stock and the Companys security holders who held
its stock prior to the merger with MLI hold the remainder of its outstanding
common stock.

On or about
December 26, 2006, the provincial authority in Shanghai in the Peoples
Republic of China approved the establishment of our wholly-foreign-owned
enterprise, or WFOE, in the Peoples Republic of China under newly adopted
rules in China permitting foreign corporations to own and operate their own
companies in China. The approval we received was subject to the WFOE obtaining
its business license from the Shanghai provincial authority, which was
subsequently received. Consequently, we have proceeded to establish offices at
major transportation centers located in China. Given the flexibility this new
approval will afford us, we currently are reviewing our overall strategy
(including our acquisition strategy) for addressing the Chinese market. We may
acquire the Shanghai office of SeaMaster Logistics (China) Ltd., a Chinese
company we refer to as SeaMaster China, during 2007, and subsequently, its
other offices in China, subject in each case to the approval of local
authorities in each province. We may acquire SeaMaster Chinas assets, or hire its
personnel. At present, SeaMaster, our subsidiary, has an exclusive agency
agreement with SeaMaster China. SeaMaster China has a Class A license as an
international freight forwarding agent in Shanghai. We believe acquiring
SeaMaster China or its assets, or hiring some or all of its personnel, in the
future, will provide increased freight services revenue for us in China. We
hope to hire additional personnel experienced in logistics in China during the
fourth quarter of 2007 and 2008. There can be no assurance that we will
consummate the acquisition of SeaMaster China, or hire the additional
experienced personnel in China. SeaMaster China primarily focuses on imports to
the United States.

Discussion of Operating Results

The following
discussion of operating results explains material changes in results of
operations for the unaudited consolidated and combined companies for the three
and nine months ended September 30, 2007 and 2006. The discussion should be
read in conjunction with the financial statements and related notes and
financial information included elsewhere in this report.

Maritime
merged with a wholly owned subsidiary of Aerobic Creations, Inc. (Aerobic) on
November 8, 2006. On February 20, 2007, Aerobic changed its name to Summit
Global Logistics, Inc. (Summit). Maritime, the accounting acquirer was formed
on February 6, 2006, which is the date of inception of our consolidated entity.

The financial
information of Summit reflects the unaudited condensed consolidated results of
operations of Summit Global Logistics Inc. and subsidiaries for the three and
nine months ended September 30, 2007. The financial information of Summit for
the three months ended September 30, 2006 and for the period from February 6,
2006 (date of inception) to September 30, 2006 reflects the unaudited condensed
consolidated results of operations of Maritime, the accounting acquirer and
subsidiary acquired by Summit on November 8, 2006.

On November 8,
2006, FMI was acquired by Maritime, a subsidiary of Summit. FMI is a
predecessor company. The financial information of FMI reflects the results of
operations of FMI Holdco I LLC and Subsidiary prior to the date of the merger.

34

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On November 8,
2006, TUG Logistics Inc. and Affiliates was acquired by Maritime, a subsidiary
of Summit. TUG Logistics Inc. is a predecessor company. The financial
information of TUG reflects the results of operations of the TUG entities
acquired prior to the date of the merger.

FMI and TUG
are each considered to be a predecessor company. However, under GAAP, it is not
acceptable to combine their historical operations, as there was no common
control or management prior to the November 8, 2006 acquisition; thus, we
believe the following discussion of operating results to be acceptable for GAAP
purposes and meaningful to understanding of our business.

Seamaster
Logistics Inc. (SLI), a wholly-owned subsidiary of Maritime, was formed in
August 2006 in the State of Delaware. SLI is licensed in the United States as
an ocean transportation intermediary. SLI acquired the entire capital of
Seamaster Logistics (Holding) Limited (SLHL), a Hong Kong/China-based,
asset-light, ocean transportation intermediary and logistics provider with
offices in Hong Kong and an exclusive agency network in the Peoples Republic
of China.

In December
2006, the provincial authority in Shanghai in the Peoples Republic of China
(PRC) approved the establishment of Seamaster Logistics (Shanghai) Ltd., a
wholly-foreign-owned enterprise, or WFOE, under newly adopted rules in the PRC
permitting foreign corporations to own and operate companies in the PRC. The
approval was subject to the WFOE obtaining a business license from the Shanghai
provincial authority, which was received in January 2007. During 2007, through
our WFOE, we established offices at major transportation centers in the PRC.
SLI, our subsidiary, has an exclusive agency agreement with Seamaster Logistics
(China) Ltd., a Chinese company, (Seamaster China). We may acquire the
Shanghai office of Seamaster China. Seamaster China has a Class A license as an
international freight forwarding agent in Shanghai. The Company believes that
Seamaster China is a variable interest entity (VIE). Under GAAP, because it
is considered a VIE, Seamaster China is consolidated in the financial
statements effective April 1, 2007. SLI, SLHL, Seamaster (Shanghai) Ltd., and
Seamaster China are collectively referred to as Seamaster.

In November, 2007 the Company received conditional permission
    by governmental authorities in Shanghai, Peoples Republic of China, to acquire
    SeaMaster Logistics (China) Ltd (aka Young Jet International Logostics, Inc.)
    through its wholly-owned Chinese subsidiary, SeaMaster Logistics (Shanghai)
Ltd. The Company is completing this process with local governmental authorities.

Geographic Operating Results.

We manage our
business through two geographic areas comprised of the Americas and Asia
Pacific, which offer similar products and services. Each geographic area is
managed regionally by executives who are directly accountable to and maintain
regular contact with our Chief Executive Officer to discuss operating activities,
financial results, forecasts and plans for each geographic region. For
reporting purposes by geographic region, airfreight and ocean freight
forwarding revenues for the movement of goods is attributed to the country
where the shipment originates. Revenues for all other services are attributed
to the country where the services are performed. Summits unaudited
consolidated revenues and net income (loss) for the three and nine months ended
September 30, 2007, the three months ended September 30, 2006 and the period
from inception through September 30, 2006 are set forth in the following
table (in millions):

|                    |  |                                          |       |                                          |   |      | 
|------------------- |  | ---------------------------------------- | ----- | ---------------------------------------- | - | ---- | 
|                    |  | Three Months
 Ended
 September
 30, 2007 |       | Three Months
 Ended
 September
 30, 2006 |  
|                    | 
|                    |  |                                          |       |                                          |  
|Revenues:           |  |                                          |       |                                          |  
|Americas            |  | $                                        | 28.1  |                                          | $ | 32.0 | 
|Asia Pacific        |  |                                          | 71.8  |                                          |   | 25.9 | 
|                    |  |                                          |       |                                          |   |      | 
|                    |  | $                                        | 99.9  |                                          | $ | 57.9 | 
|                    |  |                                          |       |                                          |   |      | 
|                    |  |                                          |       |                                          |   |      | 
|Net income
 (loss): |  |                                          |       |                                          |   |      | 
|Americas            |  | $                                        | 2.4   |                                          | $ | 1.8  | 
|Asia Pacific        |  |                                          | .6    |                                          |   | .3   | 
|Corporate costs     |  |                                          | (18.1 | )                                        |   |     | 
|                    |  |                                          |       |                                          |   |      | 
|                    |  | $                                        | (15.1 | )                                        | $ | 2.1  | 
|                    |  |                                          |       |                                          |   |      | 

|                    |  |                                         |       |                                                                |   |       | 
|------------------- |  | --------------------------------------- | ----- | -------------------------------------------------------------- | - | ----- | 
|                    |  | Nine Months
 Ended
 September
 30, 2007 |       | February 6,
 2006 (date of
 inception) to
 September 30,
 2006 |  
|                    |  |                                        
|Revenues:           |  |                                         |       |                                                                |   |       | 
|Americas            |  | $                                       | 78.9  |                                                                | $ | 84.7  | 
|Asia Pacific        |  |                                         | 136.2 |                                                                |   | 67.4  | 
|                    |  |                                         |       |                                                                |   |       | 
|                    |  | $                                       | 215.1 |                                                                | $ | 152.1 | 
|                    |  |                                         |       |                                                                |   |       | 
|                    |  |                                         |       |                                                                |   |       | 
|Net income
 (loss): |  |                                         |       |                                                                |   |       | 
|Americas            |  | $                                       | 1.4   |                                                                | $ | 2.3   | 
|Asia Pacific        |  |                                         | 1.4   |                                                                |   | 1.8   | 
|Corporate costs     |  |                                         | (34.7 | )                                                              |   |      | 
|                    |  |                                         |       |                                                                |   |       | 
|                    |  | $                                       | (31.9 | )                                                              | $ | 4.1   | 
|                    |  |                                         |       |                                                                |   |       | 



35

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Three months ended September 30, 2007
compared with the prior period and predecessor three months ended September 30,
2006.For the three months ended September 30, 2007
and 2006, the results of operations of each of the separate companies are shown
in the following table and significant changes are discussed below (in
millions):

|                                               |  |                                  |       |      |   |        |   |   |       |   |  |        |    
|---------------------------------------------- |  | -------------------------------- | ----- | ---- | - | ------ | - | - | ----- | - |  | ------ | ---
|                                               |  | Three Months Ended September 30, |      
|                                               |  |                                 
|                                               |  | 2007                             |       | 2006 |   | Change |   | % |      
|                                               |  |                                  |       |      |  
|                                               |  |                                  |       |      |   |        |   |   |       |   |  |        |    
|Revenues:                                      |  |                                  |       |      |   |        |   |   |       |   |  |        |    
|Summit                                         |  | $                                | 99.9  |      | $ | 0.6    |   | $ | 99.3  |   |  |        |    
|FMI                                            |  |                                  |      |      |   | 32.0   |   |   | (32.0 | ) |  |        |    
|TUG                                            |  |                                  |      |      |   | 25.3   |   |   | (25.3 | ) |  |        |    
|                                               |  |                                  |       |      |   |        |   |   |       |   |  |        |    
|                                               |  |                                  | 99.9  |      |   | 57.9   |   |   | 42.0  |   |  | 72.5   | %  
|Revenues
 less direct expenses (Gross profit): |  |                                  |       |      |   |        |   |   |       |   |  |        |    
|Summit                                         |  |                                  | 12.0  |      |   | 0.1    |   |   | 11.9  |   |  |        |    
|FMI                                            |  |                                  |      |      |   | 7.4    |   |   | (7.4  | ) |  |        |    
|TUG                                            |  |                                  |      |      |   | 2.1    |   |   | (2.1  | ) |  |        |    
|                                               |  |                                  |       |      |   |        |   |   |       |   |  |        |    
|                                               |  |                                  | 12.0  |      |   | 9.6    |   |   | 2.4   |   |  | 25.0   | %  
|Selling,
 general and administrative:          |  |                                  |       |      |   |        |   |   |       |   |  |        |    
|Summit                                         |  |                                  | 11.3  |      |   | 0.3    |   |   | 11.0  |   |  |        |    
|FMI                                            |  |                                  |      |      |   | 2.9    |   |   | (2.9  | ) |  |        |    
|TUG                                            |  |                                  |      |      |   | 1.7    |   |   | (1.7  | ) |  |        |    
|                                               |  |                                  |       |      |   |        |   |   |       |   |  |        |    
|                                               |  |                                  | 11.3  |      |   | 4.9    |   |   | 6.4   |   |  | 130.6  | %  
|Depreciation
 and amortization:                |  |                                  |       |      |   |        |   |   |       |   |  |        |    
|Summit                                         |  |                                  | 1.9   |      |   |       |   |   | 1.9   |   |  |        |    
|FMI                                            |  |                                  |      |      |   | 1.1    |   |   | (1.1  | ) |  |        |    
|TUG                                            |  |                                  |      |      |   |       |   |   |      |   |  |        |    
|                                               |  |                                  |       |      |   |        |   |   |       |   |  |        |    
|                                               |  |                                  | 1.9   |      |   | 1.1    |   |   | 0.8   |   |  | 72.7   | %  
|Loss on
 impairment of goodwill                |  |                                  |       |      |   |        |   |   |       |   |  |        |    
|Summit                                         |  |                                  | 7.1   |      |   |       |   |   | 7.1   |   |  |        |    
|FMI                                            |  |                                  |      |      |   |       |   |   |       |   |  |        |    
|TUG                                            |  |                                  |      |      |   |       |   |   |       |   |  |        |    
|                                               |  |                                  |       |      |   |        |   |   |       |   |  |        |    
|                                               |  |                                  | 7.1   |      |   |       |   |   | 7.1   |   |  | 100.0  | %  
|Interest and
 finance charges:                 |  |                                  |       |      |   |        |   |   |       |   |  |        |    
|Summit                                         |  |                                  | 6.6   |      |   |       |   |   | 6.6   |   |  |        |    
|FMI                                            |  |                                  |      |      |   | 1.4    |   |   | (1.4  | ) |  |        |    
|TUG                                            |  |                                  |      |      |   |       |   |   |      |   |  |        |    
|                                               |  |                                  |       |      |   |        |   |   |       |   |  |        |    
|                                               |  |                                  | 6.6   |      |   | 1.4    |   |   | 5.2   |   |  | 371.4  | %  
|Registration
 rights expense:                  |  |                                  |       |      |   |        |   |   |       |   |  |        |    
|Summit                                         |  |                                  | 3.9   |      |   |       |   |   | 3.9   |   |  |        |    
|FMI                                            |  |                                  |      |      |   |       |   |   |      |   |  |        |    
|TUG                                            |  |                                  |      |      |   |       |   |   |      |   |  |        |    
|                                               |  |                                  |       |      |   |        |   |   |       |   |  |        |    
|                                               |  |                                  | 3.9   |      |   |       |   |   | 3.9   |   |  | 100.0  | %  
|Other income
 (expense):                       |  |                                  |       |      |   |        |   |   |       |   |  |        |    
|Summit                                         |  |                                  | (1.8  | )    |   |       |   |   | (1.8  | ) |  |        |    
|FMI                                            |  |                                  |      |      |   |       |   |   |      |   |  |        |    
|UG                                             |  |                                  |      |      |   |       |   |   |      |   |  |        |    
|                                               |  |                                  |       |      |   |        |   |   |       |   |  |        |    
|                                               |  |                                  | (1.8  | )    |   |       |   |   | (1.8  | ) |  | (100.0 | ) %
|Income tax
 (benefit) provision:               |  |                                  |       |      |   |        |   |   |       |   |  |        |    
|Summit                                         |  |                                  | (5.5  | )    |   |       |   |   | (5.5  | ) |  |        |    
|FMI                                            |  |                                  |      |      |   |       |   |   |      |   |  |        |    
|TUG                                            |  |                                  |      |      |   | 0.1    |   |   | (0.1  | ) |  |        |    
|                                               |  |                                  |       |      |   |        |   |   |       |   |  |        |    
|                                               |  |                                  | (5.5  | )    |   | 0.1    |   |   | (5.6  | ) |  | (5,600 | ) %
|Net (loss)
 income:                            |  |                                  |       |      |   |        |   |   |       |   |  |        |    
|Summit                                         |  |                                  | (15.1 | )    |   | (.2    | ) |   | (14.9 | ) |  |        |    
|FMI                                            |  |                                  |      |      |   | 2.0    |   |   | (2.0  | ) |  |        |    
|TUG                                            |  |                                  |      |      |   | .3     |   |   | (0.3  | ) |  |        |    
|                                               |  |                                  |       |      |   |        |   |   |       |   |  |        |    
|                                               |  | $                                | (15.1 | )    | $ | 2.1    |   | $ | (17.2 | ) |  | (819   | ) %



36

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Revenues

| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | SUMMIT Revenues were $99.9 million for
 the three months ended September 30, 2007 compared to $0.6 million for the
 three months ended September 30, 2006. Summit acquired FMI and TUG on
 November 8, 2006, and thus, its revenues for the three months ended September
 30, 2006 do not reflect the revenues of the acquired companies. In April
 2007, Summit actively started its operations in the PRC through its
 subsidiaries and VIE, which are referred to as Seamaster. Our revenues are
 classified into two types, (a) logistics services and (b) air and ocean
 freight services. Our logistics service revenues are generated by FMI. Our
 air and ocean freight service revenues are principally generated by TUG,
 Seamaster, AmeRussia and SLI. Our logistics revenues and air and ocean
 freight revenues for the three months ended September 30, 2007 were $29.6
 million and $70.3 million, respectively. During the three months ended
 September 30, 2007, air and ocean freight revenues generated by Seamaster,
 AmeRussia and SLI were $24.7 million, $1.2 million and $10.4 million,
 respectively.
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | FMI - Revenues were $32.0 million for
 the three months ended September 30, 2006. On November 8, 2006, FMI was
 acquired by Maritime, a subsidiary of Summit. On a comparative basis, FMIs
 revenue (which is included in Summits results) for the three months ended
 September 30, 2007 were $29.6 million, a decrease of $2.4 million or 7.5%.
 This decrease is due to the loss of warehouse accounts, decreasing revenue
 from cargo handling. We do not expect this trend to continue.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | TUG - Revenues were $25.3 million for
 the three months ended September 30, 2006. On November 8, 2006, TUG was
 acquired by Maritime, a subsidiary of Summit. On a comparative basis, TUGs
 revenue (which is included in Summits results) for the three months ended
 September 30, 2007 were $34 million, an increase of $8.7 million or 34.4%.
 This increase is due to (i) an increase in containerized cargo freight
 management movements related to the continued expansion of business to the
 United States East and Gulf Coasts from Asia, including the opening of a New
 York office during 2006, and (ii) general market growth. We expect this trend
 to continue.                                                                                                                                                                                                                                                                                                                                                                                                                                             

Revenues less direct expenses (Gross profit)

| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | SUMMIT - Gross profit was $12 million
 for the three months ended September 30, 2007 compared to $0.1 million for
 the three months ended September 30, 2006 (does not reflect the operations of
 the acquired companies). Our logistics and air and ocean freight gross
 profits for the three months ended September 30, 2007 were $6.6 million and
 $5.4 million, respectively. Our logistics and air and ocean freight services
 gross profits as percentages of revenues were 22.3% and 7.6%, respectively.                                                                                                                                                                              
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |  | FMI - Gross profit was $7.4 million for
 the three months ended September 30, 2006. On a comparative basis, gross
 profit for the three months ended September 30, 2007 (which is included in
 Summits results) was $6.6 million, a decrease of $0.8 million or 10.8%. On a
 comparative basis, gross profit as a percentage of revenue decreased from
 23.1% in the three months ended September 30, 2006 compared to 22.3% for the
 three months ended September 30, 2007. This decrease and the lower gross
 profit margin is due to the loss of warehousing revenue accounts reducing the
 overall contribution factor on the fixed cost of the building.                                
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |  | TUG - Gross profit was $2.1 million for
 the three months ended September 30, 2006. On a comparative basis, gross
 profit for the three months ended September 30, 2007 (which is included in
 Summits results) was $2.3 million, an increase of $0.2 million or 9.5%,
 however gross profit as a percentage of revenue decreased from 8.3% to 6.9%.
 The increase in gross profit was due to our increase in sales by 34.7%. The decrease
 in our gross profit percentage was due to an increase in ocean freight costs
 including peak season charges and lower margin on co-load business, which
 could not be fully passed on to our customers. We do not expect this trend to
 continue.

Selling, general and administrative expenses

| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | SUMMIT - Selling, general and
 administrative (SG&A) expenses were $11.3 million for the three months
 ended September 30, 2007, compared to $0.3 million for the three months ended
 September 30, 2006 (does not reflect the operations of the acquired
 companies). For the three months ended September 30, 2007 the unaudited
 condensed consolidated SG&A expenses of $11.3 million consisted
 principally of salaries and benefits of $4.5 million, stock based compensation
 of $0.5 million, professional fees of $2.2 million, office expenses of $1.5
 million, and other SG&A expenses of $2.6 million. For the three months
 ended September 30, 2007, SG&A expenses related to our logistics
 services, air and ocean freight services, and corporate SG&A expenses
 were $2.7 million, $4.4 million and $4.2 million, respectively. Corporate
 office SG&A expenses for the three months ended September 30, 2007
 consisted of salaries and benefits of $0.4 million, stock based compensation
 of $0.5 million, professional fees of $1.9 million, office expenses of $0.4
 million, and other SG&A expenses of $1 million.
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |  | FMI - SG&A expenses were $2.9
 million for the three months ended September 30, 2006. On a comparative
 basis, SG&A expenses for the three months ended September 30, 2007 (which
 is included in Summits results) were $2.7 million, a decrease of $0.2
 million or 7.4%. This is principally due to the elimination of financial and
 managerial consulting fees that FMI was paying in 2006 to a member with a
 controlling interest that ended in October 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          



37

---



| |   |                                                                                                                                                                                                                                       
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | TUG - SG&A expenses were $1.7
 million for the three months ended September 30, 2006. On a comparative
 basis, SG&A expenses for the three months ended September 30, 2007 (which
 is included in Summits results) were $1.7 million.

Depreciation and amortization

| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | SUMMIT  Depreciation and amortization
 expenses of $1.9 million for the three months ended September 30, 2007
 reflect the consolidated operations of Summit Global Logistics Inc. and Subsidiaries.
 For the three months ended September 30, 2007, depreciation and amortization
 expenses related to our logistics services, air and ocean freight services,
 and corporate were $1.5 million, $.3 million and $.1 million, respectively.                                             
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |  | FMI Depreciation and amortization
 expenses were $1.1 million for the three months ended September 30, 2006. On
 a comparative basis, depreciation and amortization expenses for the three
 months ended September 30, 2007 (which is included in Summits results) were
 $1.5 million, an increase of $0.4 million or 35.9%. This increase is
 primarily due to amortization of revalued intangible assets adjusted to their
 fair value at the date of acquisition on November 8, 2006.

Loss on impairment of goodwill

| |   |                                                                                                                                                                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | SUMMIT- The $7.1 million charge for impairment
    of goodwill is based on  restructuring of SMI. The Company periodically
    tests the carrying value of goodwill for impairment. Accordingly, there could
    be further impairment charges in the future.

Interest and finance charges

| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | SUMMIT  Interest and finance charges of
 $6.6 million for the three months ended September 30, 2007 relates
 principally to the senior secured credit facility obtained and the
 convertible notes issued to finance acquisitions of FMI and TUG on November
 8, 2006 as well as additional notes we have since issued. Since our
 restructuring on May 21, 2007, the interest rates related to the senior
 secured debt and convertible notes were increased by approximately 75 basis
 points on average. In addition, because we were in default of our loan
 covenants, the interest expense recorded during the three months ended
 September 30, 2007 was based on the default interest rate, which is 200 basis
 points higher than the normal rate.
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  | FMI Interest and finance charges was
 $1.4 million for the three months ended September 30, 2006. The credit
 facility of FMI was fully paid at the date of its merger with Summit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

Registration rights expense

| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | SUMMIT  Registration rights expense of
 $3.9 million is principally due to the failure to meet the registration
 provision with the convertible note holders and the private placement common
 stock purchasers as of September 30, 2007. We expect to continue to incur
 these expenses, at the rate of approximately $2.4 million per month until our
 Registration Statement is declared effective under the Securities Act of
 1933, subject to the contractual cap of approximately $11.8 million. While the
    Registration Rights Agreements require us to pay the penalties in cash, we
    intend to request that our note holders and common stock holders who are
    entitled to the penalty payments accept payment in the form of convertible
    notes, as was done in connection with our restructuring in May, 2007. However,
    there is no assurance that such persons will be amenable to accepting convertible
    notes in lieu of the cash payments to which they are entitled.

Other income (expense)

| |   |                                                                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | SUMMIT  Other expense of $1.8 million
 is principally due to the loss in fair value of derivative instruments. Our
 derivative instruments include embedded discounts on convertible notes and
 warrants.

Income tax (benefit) provision

| |   |                                                                                                                                                                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | SUMMIT -
 Income tax benefit of $5.5 million for the three months ended September 30,
 2007 is 27% of the loss before income tax (benefit) provision. The effective
    tax rate differs from the statutory federal income tax rate of 34% due to
    permanent differences and state income taxes.



38

---



Net income (loss)

| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | SUMMIT - Net loss of $15.1 million for
 the three months ended September 30, 2007 reflects the consolidated
 operations of Summit Global Logistics, Inc. and Subsidiaries (including the
 acquired companies and our VIE). The consolidated loss reflects, in part, increased
 SG&A expenses consisting primarily of salaries and benefits, corporate
 office overhead, increased interest expense and loss on impairment of goodwill.                               
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |  | FMI - Net income was $2 million for the
 three months ended September 30, 2006. On a comparative basis, FMIs net
 income before taxes (without reallocation of corporate expenses) for the
 three months ended September 30, 2007 (which is included in Summits results)
 was $2.4 million or an increase of $.4 million. This increase is primarily
 attributable to a decrease in interest expense offset by a reduction of
 logistics revenues and gross profit.
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |  | TUG - Net income was $0.3 million for
 the three months ended September 30, 2006. On a comparative basis, TUGs net
 income without reallocation of corporate expenses for the three months ended
 September 30, 2007 (which is included in Summits results) is $0.4 million,
 an increase of $0.1 million. This increase was primarily caused by an
 increase in sales offset by the increased SG&A expenses.                                                      



39

---



Nine months ended
September 30, 2007 compared with the prior period and predecessor nine months
ended September 30, 2006. For the nine months ended
September 30, 2007 and 2006, the results of operations of each of the separate
companies are shown in the following table and significant changes are
discussed below (in millions):

|                                               |  |      |       |      |   |        |  |   |       |   |  |        |   
|---------------------------------------------- |  | ---- | ----- | ---- | - | ------ |  | - | ----- | - |  | ------ | --
|                                               |  |      |      
|                                               |  | 2007 |       | 2006 |   | Change |  | % |      
|                                               |  |      |      
|Revenues:                                      |  |      |       |      |   |        |  |   |       |   |  |        |   
|Summit                                         |  | $    | 215.1 |      | $ | 1.1    |  | $ | 214.0 |   |  |        |   
|FMI                                            |  |      |      |      |   | 84.7   |  |   | (84.7 | ) |  |        |   
|TUG                                            |  |      |      |      |   | 66.3   |  |   | (66.3 | ) |  |        |   
|                                               |  |      |       |      |   |        |  |   |       |   |  |        |   
|                                               |  |      | 215.1 |      |   | 152.1  |  |   | 63.0  |   |  | 41.4   | % 
|Revenues less direct expenses (Gross
 profit): |  |      |       |      |   |        |  |   |       |   |  |        |   
|Summit                                         |  |      | 26.8  |      |   | 0.2    |  |   | 26.6  |   |  |        |   
|FMI                                            |  |      |      |      |   | 19.3   |  |   | (19.3 | ) |  |        |   
|TUG                                            |  |      |      |      |   | 6.4    |  |   | (6.4  | ) |  |        |   
|                                               |  |      |       |      |   |        |  |   |       |   |  |        |   
|                                               |  |      | 26.8  |      |   | 25.9   |  |   | 0.9   |   |  | 3.5    | % 
|Selling, general and administrative:           |  |      |       |      |   |        |  |   |       |   |  |        |   
|Summit                                         |  |      | 30.2  |      |   | 0.5    |  |   | 29.7  |   |  |        |   
|FMI                                            |  |      |      |      |   | 9.0    |  |   | (9.0  | ) |  |        |   
|TUG                                            |  |      |      |      |   | 4.2    |  |   | (4.2  | ) |  |        |   
|                                               |  |      |       |      |   |        |  |   |       |   |  |        |   
|                                               |  |      | 30.2  |      |   | 13.7   |  |   | 16.5  |   |  | 120.4  | % 
|Depreciation and amortization:                 |  |      |       |      |   |        |  |   |       |   |  |        |   
|Summit                                         |  |      | 5.5   |      |   |       |  |   | 5.5   |   |  |        |   
|FMI                                            |  |      |      |      |   | 3.4    |  |   | (3.4  | ) |  |        |   
|TUG                                            |  |      |      |      |   |       |  |   |      |   |  |        |   
|                                               |  |      |       |      |   |        |  |   |       |   |  |        |   
|                                               |  |      | 5.5   |      |   | 3.4    |  |   | 2.1   |   |  | 61.8   | % 
|Loss on impairment of goodwill                 |  |      |       |      |   |        |  |   |       |   |  |        |   
|Summit                                         |  |      | 7.1   |      |   |       |  |   | 7.1   |   |  |        |   
|FMI                                            |  |      |      |      |   |       |  |   |       |   |  |        |   
|TUG                                            |  |      |      |      |   |       |  |   |       |   |  |        |   
|                                               |  |      |       |      |   |        |  |   |       |   |  |        |   
|                                               |  |      | 7.1   |      |   |       |  |   | 7.1   |   |  | 100    | % 
|Interest and finance charges:                  |  |      |       |      |   |        |  |   |       |   |  |        |   
|Summit                                         |  |      | 18.0  |      |   |       |  |   | 18.0  |   |  |        |   
|FMI                                            |  |      |      |      |   | 4.2    |  |   | (4.2  | ) |  |        |   
|TUG                                            |  |      |      |      |   |       |  |   |      |   |  |        |   
|                                               |  |      |       |      |   |        |  |   |       |   |  |        |   
|                                               |  |      | 18.0  |      |   | 4.2    |  |   | 13.8  |   |  | 328.6  | % 
|Registration rights expense:                   |  |      |       |      |   |        |  |   |       |   |  |        |   
|Summit                                         |  |      | 6.9   |      |   |       |  |   | 6.9   |   |  |        |   
|FMI                                            |  |      |      |      |   |       |  |   |      |   |  |        |   
|TUG                                            |  |      |      |      |   |       |  |   |      |   |  |        |   
|                                               |  |      |       |      |   |        |  |   |       |   |  |        |   
|                                               |  |      | 6.9   |      |   |       |  |   | 6.9   |   |  | 100.0  | % 
|Other income (expense):                        |  |      |       |      |   |        |  |   |       |   |  |        |   
|Summit                                         |  |      | (1.7  | )    |   |       |  |   | (1.7  | ) |  |        |   
|FMI                                            |  |      |      |      |   |       |  |   |      |   |  |        |   
|TUG                                            |  |      |      |      |   |       |  |   |      |   |  |        |   
|                                               |  |      |       |      |   |        |  |   |       |   |  |        |   
|                                               |  |      | (1.7  | )    |   |       |  |   | (1.7  | ) |  | (100.0 | %)



40

---



|                                    |  |   |       |   |   |      |   |   |       |   |  |        |   
|----------------------------------- |  | - | ----- | - | - | ---- | - | - | ----- | - |  | ------ | --
|Income tax (benefit)
    provision: |  |   |       |   |   |      |   |   |       |   |  |        |   
|Summit                              |  |   | (10.7 | ) |   |     |   |   | (10.7 | ) |  |        |   
|FMI                                 |  |   |      |   |   | 0.1  |   |   | (.1   | ) |  |        |   
|TUG                                 |  |   |      |   |   | 0.4  |   |   | (.4   | ) |  |        |   
|                                    |  |   |       |   |   |      |   |   |       |   |  |        |   
|                                    |  |   | (10.7 | ) |   | 0.5  |   |   | (11.2 | ) |  | (2,240 | )%
|Net income (loss):                  |  |   |       |   |   |      |   |   |       |   |  |        |   
|Summit                              |  |   | (31.9 | ) |   | (0.3 | ) |   | (31.6 | ) |  |        |   
|FMI                                 |  |   |      |   |   | 2.6  |   |   | (2.6  | ) |  |        |   
|TUG                                 |  |   |      |   |   | 1.8  |   |   | (1.8  | ) |  |        |   
|                                    |  |   |       |   |   |      |   |   |       |   |  |        |   
|                                    |  | $ | (31.9 | ) | $ | 4.1  |   | $ | (36.0 | ) |  | (878.1 | )%

Revenues

| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | SUMMIT - Revenues were $215.1 million
 for the nine months ended September 30, 2007 compared to $1.1 million for the
 prior period from February 6, 2006 (date of inception) to September 30, 2006.
 Summit acquired FMI and TUG on November 8, 2006, and thus, its revenues for the
 period from inception to September 30, 2006 do not reflect the revenues of
 the acquired companies. In April 2007, Summit actively started its operations
 in the PRC through its subsidiaries and VIE, which are referred to as
 Seamaster. Our revenues are classified into two types, (a) logistics services
 and (b) air and ocean freight services. Our logistics service revenues are
 generated by FMI. Our air and ocean freight service revenues are principally
 generated by TUG, Seamaster, AmeRussia and SLI. Our logistics revenues and
 air and ocean freight revenues for the nine months ended September 30, 2007
 were $78.9 million and $136.2 million, respectively. During the nine months
 ended September 30, 2007, air and ocean freight revenues generated by
 Seamaster, AmeRussia and SLI were $39.4 million, $2.6 million and $11.4
 million, respectively.
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |  | FMI - Revenues were $84.7 million for
 the nine months ended September 30, 2006. On November 8, 2006, FMI was
 acquired by Maritime, a subsidiary of Summit. On a comparative basis,
 revenues for the nine months ended September 30, 2007 (which are included in
 Summits results) were $78.9 million, a decrease of $5.8 million or 6.9%.
 This decrease is due to the loss of warehouse accounts decreasing the revenue
 from cargo handling. We do not expect this trend to continue.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |  | TUG - Revenues were $66.3 million for
 the nine months ended September 30, 2006. On November 8, 2006, TUG was
 acquired by Maritime, a subsidiary of Summit. On a comparative basis,
 revenues for the nine months ended September 30, 2007 (which are included in
 Summits results) were $82.8 million, an increase of $16.5 million or 24.9%.
 This increase is due to (i) an increase in containerized cargo freight
 management movements related to the continued expansion of business to the
 United States East and Gulf Coasts from Asia, including the opening of a New
 York office in 2006, and (ii) general market growth. We expect this trend to
 continue.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

Revenues less direct expenses (Gross profit)

| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | SUMMIT- Gross profit was $26.8 million
 for the nine months ended September 30, 2007 compared to $0.2 million for the
 prior period from February 6, 2006 (date of inception) to September 30, 2006.
 In 2006, Summit through Maritime was a newly formed entity. Our logistics and
 air and ocean freight gross profits for the nine months ended September 30,
 2007 were $14.8 million and $12 million, respectively. Our logistics and air
 and ocean freight services gross profits as a percentage of revenue were
 18.7% and 8.9%, respectively.                                                                                                                                                
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  | FMI - Gross profit was $19.3 million for
 the nine months ended September 30, 2006. On a comparative basis, gross
 profit for the nine months ended September 30, 2007 (which is included in
 Summits results) was $14.8 million, a decrease of $4.5 million or 23.3%. On
 a comparative basis, gross profit as a percentage of revenue decreased from
 22.9% for the nine months ended September 30, 2006 compared to 18.7% for the
 nine months ended September 30, 2007. This decrease and the lower gross
 profit margin is due to the loss of warehousing revenue accounts reducing the
 overall contribution factor on the fixed cost of the building. We do not
 expect this trend to continue.
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  | TUG - Gross profit was $6.4 million for
 the nine months ended September 30, 2006. On a comparative basis, gross
 profit for the nine months ended September 30, 2007 (which is included in
 Summits results) was $6.9 million, an increase of $0.5 million or 7.8%. On a
 comparative basis, gross profit as a percentage of revenue decreased from
 9.7% to 8.4%. This decrease is due to the increase in ocean freight costs
 including peak season charges and lower margin on co-load business, which
 could not be fully passed on to our customers. We do not expect this trend to
 continue.                                                                                                  



41

---



|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-------------------------------------------- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Selling, general and administrative expenses
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                             |  | SUMMIT - Selling, general and
 administrative (SG&A) expenses were $30.2 million for the nine
 months ended September 30, 2007, compared to $0.5 million for the period from
 February 6, 2006 (date of inception) to September 30, 2006. In 2006, Summit
 through Maritime was a newly formed entity. For the nine months ended
 September 30, 2007, Summits unaudited condensed consolidated SG&A
 expenses consisted principally of salaries and benefits of $13.5 million,
 stock based compensation of $1.7 million, professional fees of $6.4 million,
 office expenses of $3.3 million, and other SG&A expenses of $5.3 million.
 For the nine months ended September 30, 2007, SG&A expenses related to
 our Logistics services, Air and ocean freight services, and Corporate
 SG&A expenses were $8.4 million, $9.9 million and $12 million,
 respectively. Corporate office SG&A expenses for the nine months ended
 September 30, 2007 consisted of salaries and benefits of $2.3 million, stock
 based compensation of $1.7 million, professional fees of $5.5 million, office
 expenses of $0.6 million, and other SG&A expenses of $1.9 million.
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                             |  | FMI - SG&A expenses were $9.0
 million for the nine months ended September 30, 2006. On a comparative basis,
 SG&A expenses for the nine months ended September 30, 2007 (which are
 included in Summits results) were $8.4 million, a decrease of $0.6 million
 or 6.7%. This is principally due to the elimination of financial and
 managerial consulting fees that FMI was paying in 2006 to a member with a
 controlling interest that ended in October 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                             |  | TUG - SG&A expenses were $4.2
 million for the nine months ended September 30, 2006. On a comparative basis,
 SG&A expenses for the nine months ended September 30, 2007 (which are
 included in Summits results) were $4.9 million, an increase of $0.7 million
 or 16.7%. The increase was primarily driven by an increase in staff and other
 costs to service its business expansion into the United States East and Gulf
 coasts. We do not expect this trend to continue.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|----------------------------- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Depreciation and amortization
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                              |  | SUMMIT  Depreciation and amortization
 expenses of $5.5 million for the nine months ended September 30, 2007 were
 due to the consolidated operations of Summit Global Logistics Inc. and
 Subsidiaries. For the nine months ended September 30, 2007, depreciation and
 amortization expenses related to our Logistics services, Air and Ocean
 freight services, and Corporate were $4.7 million, $.7 million and $.1
 million, respectively.                                              
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                              |  | FMI  Depreciation and amortization
 expenses were $3.4 million for the nine months ended September 30, 2006. On a
 comparative basis, depreciation and amortization expenses for the nine months
 ended September 30, 2007 (which are included in Summits results) were $4.7
 million, an increase of $1.3 million or 38.1%. This increase is primarily due
 to amortization of revalued intangible assets adjusted to their fair value at
 the date of the acquisition on November 8, 2006.

|                               |   |                                                                                                                                                                                                                                                                 
|------------------------------ | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Loss on impairment of goodwill
|                               |   |                                                                                                                                                                                                                                                                 
|                               |  | Summit-
The $7.1 million charge for impairment
    of goodwill is based on the restructuring of SMI. The Company periodically
    tests the carrying value of goodwill for impairment. Accordingly, there could
    be further impairment charges in the future.

|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|----------------------------- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Interest and finance charges:
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                              |  | SUMMIT  Interest and finance charges of
 $18 million for the nine months ended September 30, 2007 relate principally
 to the senior secured credit facility obtained and the convertible notes
 issued to finance the acquisitions of FMI and TUG on November 8, 2006, as
 well as additional notes we have since issued. Since May 21, 2007, the
 interest rates related to the senior secured debt and convertible notes were
 increased by approximately 75 basis points, on average. In addition, because
 we were in default of our loan covenants, the interest expense recorded during
 the three months ended September 30, 2007 was based on the default interest
 rates, which are 200 basis points higher than the normal rates.
|                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                              |  | FMI  Interest and finance charges were
 $4.2 million for the nine months ended September 30, 2006. The credit
 facility of FMI was fully paid at the date of their acquisition.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

|                            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--------------------------- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Registration rights expense
|                            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                            |  | SUMMIT  Registration rights expense of
 $6.9 million for the nine months ended September 30, 2007 is due to the
 failure to meet the registration provision with the convertible note holders
 and the private placement common stock purchasers as of September 30, 2007.
 We expect to continue to incur these expenses at the rate of approximately
 $2.4 million per month until our Registration Statement is declared effective
 under the Securities Act of 1933, subject to the contractual cap of
 approximately $11.8 million. While the Registration Rights Agreements require
    us to pay the penalties in cash, we intend to request that our note holders
    and common stock holders who are entitled to the penalty payments accept
    payment in the form of convertible notes, as was done in connection with
    our restructuring in May, 2007. However, there is no assurance that such
    persons will be amenable to accepting convertible notes in lieu of the cash
    payments to which they are entitled.



42

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|                       |   |                                                                                                                                                                                    
|---------------------- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Other income (expense)
|                       |   |                                                                                                                                                                                    
|                       |  | SUMMIT  Other expense of $1.7 million
 is principally due to the loss in fair value of derivative instruments which
 include embedded discounts on convertible notes and warrants.

|                               |   |                                                                                                                                                                                                                                                                                            
|------------------------------ | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Income tax (benefit) provision
|                               |   |                                                                                                                                                                                                                                                                                            
|                               |  | SUMMIT - Income tax benefit of $10.7 million for
    the nine months ended September 30, 2007 is 25.1% of the loss before income
    tax expense. The effective tax rate differs from the statutory federal income
    tax rate of 34% due to permanent differences and state income taxes.

|                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|----------------- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Net income (loss)
|                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                  |  | SUMMIT - Net loss of $31.9 million for
 the nine months ended September 30, 2007 reflects the consolidated operations
 of Summit Global Logistics Inc. and Subsidiaries (including the acquired
 companies and our VIE). The consolidated loss reflects, in part, increased SG&A
 expenses, consisting primarily of salaries and benefits, corporate office
 overhead, interest expense, registration rights expense and the loss on
 impairment of goodwill. During the nine months ended September 30, 2007, our net
 loss includes, among others, the following non cash expenses:   $7.1
 million in charges related to impairment of goodwill, $2.3 million in amortization
 of deferred financing costs, $4 million in amortization of intangibles, $5.1
 million in amortization of discount on convertible debt, $1.7 million of stock
 based compensation expense, and $1.7 million of loss on derivative instruments.
|                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                  |  | FMI- Net income was $2.6 million for the
 nine months ended September 30, 2006. On a comparative basis, FMIs net loss
 for the nine months ended September 30, 2007 (which is included in Summits
 results) without reallocation of corporate overhead was $1.4 million, a
 decrease of $1.2 million. This decrease is attributable to FMIs decreased
 sales and gross profit margin.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                  |  | TUG - Net income was $1.8 million for
 the nine months ended September 30, 2006. On a comparative basis, TUGs net
 income for the nine months ended September 30, 2007 (which is included in
 Summits results) without reallocation of corporate overhead was $1.4 million,
 a decrease of $0.4 million. This decrease was primarily caused by a lower
 gross profit margin and increased SG&A expenses due to the expansion of
 business in the United States East and Gulf Coasts.                                                                                                                                                                                                                                                                                                                                                                                                                                         

43

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Liquidity and Capital Resources

As of
September 30, 2007, we had cash and cash equivalents of approximately $8.5
million (including restricted cash of $3.4 million) and working capital
of $9.6 million, compared with cash and cash equivalents of $
15.8 million (including restricted cash of $4 million) and working capital of
$20.7 million, at December 31, 2006. The decrease of $7.3 million in our cash
and cash equivalents during the nine months ended September 30, 2007, is a
result of our use of cash in our operating activities of $13.6 million, use of
cash in our investing activities of $2.1 million and cash provided by our
financing activities of $8.3 million, consisting primarily of proceeds from the
sale of additional convertible notes and the restructuring of existing
convertible notes on May 21, 2007. The decrease of $11.1 million in our working
capital was primarily attributable to  a $3 million increase in our short term
    debt, accrued registration rights expense of approximately $3.9 million and
a net decrease in other working capital accounts of approximately $4.2 million.

As
    discussed below, we believe that we will require additional working capital
    during the early part of the first quarter of 2008 to fund our operations
    and our growth. If we are unable to obtain the capital we need in a timely
    fashion, there will be a material adverse effect on our business and our
    financial condition.

We
    have failed repeatedly in the past to meet certain of the financial covenants
    under our senior secured credit facility and the convertible notes. As described
    below, on November 19, 2007, we obtained waivers of all existing defaults
    from our senior secured lenders and senior secured note holders. As discussed
    elsewhere herein, we were also in default of our obligation to register certain
    securities related to the convertible notes and common stock offering; while
    the default related to the convertible notes has also been waived, we continue
    to incur substantial cash penalties as a result of our failure to register
    the shares in compliance with the applicable agreements.

On
    November 19, 2007, the Company received from its senior secured lenders waivers
    of all existing defaults under its senior secured credit facility, in exchange
    for which, the Company, among other terms and conditions, agreed to (i) pay
    the senior lender a $250 cash amendment fee and (ii) an increase in the interest
    rates on certain types of loans. The senior secured lender also agreed to
    reset the financial covenants relating to EBITDA and the Fixed Charge Coverage
    Ratio (in each case, as defined).

Additionally,
    on November 19, 2007, the Company received from its senior secured note holders
    waivers of all existing defaults under its senior secured convertible notes,
    in exchange for which, the Company, among other terms and conditions, agreed
    to the following: to pay the note holders $250 in the form of additional
    notes; to use its best efforts, subject to certain conditions, to cause two
    persons nominated by a certain note holder to be appointed to its board of
    directors; and, effective November 23, 2007, to increase the interest rate
    on the notes, by 150 basis points, and reduce the conversion price of the
    notes and exercise price of the warrants associated with the notes from $5.50
    per share to $3.00 per share. The senior secured note holders also agreed
    to reset the financial covenants relating to EBITDA and the Fixed Charge
    Coverage Ratio (in each case, as defined).

Although
    we were able to secure revised financial covenants from our senior secured
    lenders and our senior secured note holders in November, 2007, we may nevertheless
    be unable to comply with our financial covenants in the future. If we are
    unable to comply in the future with the financial and other covenants contained
    in our credit documents, there will be a further event of default, in which
    event, our lenders will have the right to accelerate our indebtedness and
    foreclose on our assets, in which case we would cease to be a going concern.

We entered
into registration rights agreements in connection with our senior secured note
and common stock financings on November 8, 2006. These agreements were amended
on May 21, 2007 in connection with a restructuring of such notes
(Agreements). Pursuant to these Agreements, we were required to file
our amended registration statement by June 20, 2007 under the Securities Act
of 1933, as amended (the Act), with respect to certain shares of
our common stock. This registration statement (Registration Statement)
was filed on a timely basis in compliance with the Agreements. The Agreements
also required us to cause the Registration Statement to be effective under the
Act by September 18, 2007. The Registration Statement is not yet effective under
the Act, and thus, we are in default of our obligations under these Agreements.
While this default has also been waived, we continue to incur substantial
cash penalties as a result of our failure to register the shares in compliance
with the applicable agreements.

Under the
terms of the Agreements, we are required to pay liquidated damages in the event
that the Registration Statement was not declared effective under the Act on or
before September 18, 2007. Such payment is a percentage of the aggregate amount
invested as follows: one percent (1%) per month ($1.2 million), prorated on a
daily basis for the first 30 days after September 18, 2007, and two percent
(2%) per month ($2.4 million), prorated on a daily basis for each thirty day
period thereafter, subject to a 10% aggregate limit ($11.8 million). Our
failure to cause the Registration Statement to be declared effective under the
Act by the prescribed date also constituted an event of default under the
credit documents with the note holders and our senior secured lenders (by
virtue of cross default provisions).

As of November
19, 2007, we have incurred (but not yet paid) aggregate penalties of
approximately $5.9 million. We are currently incurring a penalty at the rate
    of approximately $78,000 a day (or approximately $2.4 million per month).
    We will continue to incur this penalty until such time as the Registration
    Statement is declared effective, subject to the $11.8 million aggregate cap.
    The incurring of these penalties has had and will continue to have a material
    adverse effect on our results of operations and financial condition. We are
    currently preparing to file an amendment to our Registration Statement in
    response to the SEC comments, with a view to having it declared effective
as soon as practicable, thereby mitigating the impact on our financial results.

While the Registration Rights Agreements require us to pay
    the penalties in cash, we intend to request that our note holders and common
    stock holders who are entitled to the penalty payments accept payment in
    the form of convertible notes, as was done in connection with our restructuring
    in May, 2007. However, there is no assurance that such persons will be amenable
    to accepting convertible notes in lieu of the cash payments to which they
    are entitled.

44

---



Due to our
prior failure to meet certain financial covenants under our senior secured
credit facility and convertible debt at December 31, 2006, the terms of the
revolving loan portion of our senior credit facility were amended so as to make
advances under our $10 million facility subject to the discretion of the lender.
Accordingly, we do not currently have any availability under our $10 million
revolving credit facility, which could have a material adverse effect on us if
we should need additional external sources of liquidity. If we should require
additional liquidity and are unable to access our revolving credit facility (or
if we are unable to secure additional sources of liquidity), there would be a
material adverse effect on our business and financial condition, including a
potential default under our credit facility. Our senior lenders have a secured
interest in all of our assets.

We
    believe that we will require additional working capital during the early
    part of the first quarter of 2008 to fund our operations and our growth.
    Subject to the approval of our lenders, we anticipate that we will be able
    to obtain access to additional sources of equity and debt financing but can
    provide no assurance that additional funds will be available, or if available,
    on commercially acceptable terms or in a timely manner to enable us to continue
    our operations in the normal course. Our covenants in connection with our
    agreements with our senior secured creditor and note holders limit our ability
    to raise more debt or capital. During the nine months ended September 30,
    2007, we invested approximately $6 million in our operations in Asia Pacific
    through Seamaster Logistics (Shanghai) Ltd. and our exclusive agency agreement
    with Seamaster Logistics (China) Ltd. for working capital and capital expenditures.



We need to generate
cash flows from operations or obtain additional funds, either through the
issuance of debt or equity, or we may not have sufficient cash to continue our
operations. We cannot be certain that we will be able
to generate cash flow from operations or secure additional funds on a timely
basis, or at all. Any financing we do obtain could be on onerous terms that are
highly dilutive to our existing security holders. Our access to additional
sources of liquidity is dependent upon, among other things, the support of our
senior lenders and note holders. The terms of our senior credit facility, notes
and long-term leases require that we comply with certain financial and other
covenants and restrictions which limit our activities, including making further
acquisitions or securing additional funding. Subject to obtaining the approval
of our lenders, where required, we may seek additional debt or equity
financings, in public or private transactions. There can be no assurances that
additional equity or debt financing will be available on acceptable terms, if
at all. We cannot be certain as to the availability of sufficient liquidity to
continue our operations beyond twelve months. Our potential sources of
long-term liquidity (beyond twelve months), include our then current cash
balances (if any), any cash flows from operations, our current credit facility,
though we currently have no availability thereunder, and any additional equity
or credit facilities we can arrange.

If we obtain
additional funds by issuing equity securities, dilution to stockholders may
occur, and conversion rate adjustments and/or anti-dilution provision in our
notes and warrants may apply that could adversely affect our stockholders. If
we are not able to generate sufficient cash flow from our operations to meet
our obligations under the senior credit facility, notes, leases and earn-out
payments, then we will be required to use our capital for such payments and may
be required to refinance all or a portion of such obligations or obtain
additional financing. This will negatively impact our liquidity and financial
position and restrict our ability to make additional acquisitions. We may also
be forced to sell an acquired company in order to satisfy our obligations. We
cannot be certain that we will be able to operate profitably once we sell an
acquired company or that we will be able to generate a sufficient amount of
proceeds from the disposition of such acquired companies to satisfy the
obligations we incurred to make these acquisitions.

We believe
that we will require additional working capital during the early part of the
first quarter of 2008 to fund our growth. Subject to the approval of our
lenders, we anticipate that we will be able to obtain access to additional sources
of equity and debt financing but can provide no assurance that additional funds
will be available, or if available, on commercially acceptable terms or in a
timely manner to enable us to continue our operations in the normal course. Our
covenants in connection with our agreements with our senior secured creditor
and note holders limit our ability to raise more debt or capital. During the
nine months ended September 30, 2007, we invested approximately $6 million in
our operations in Asia Pacific through Seamaster Logistics (Shanghai) Ltd. and
our exclusive agency agreement with Seamaster Logistics (China) Ltd. for
working capital and capital expenditures.

We anticipate
that our capital expenditures for the remainder of 2007 will be approximately
$.5 million, comprised of additional office equipment, the replacement of
current warehouse equipment, leasehold improvements, and information
technology.

We are working constructively with our Senior Secured lender
    and our Convertible Note holders (which on November 19, 2007, granted us
    waivers of all existing defaults, as described herein) with respect to various
    strategic alternatives. In that regard, the Company has engaged Gordian Group,
    LLC, an investment bank, to advise it on such matters. The Company seeks
    to maximize the value of the Company and is contemplating, among other possible
    initiatives, a recapitalization, a restructuring, an alliance with strategic
    partners, and a sale to or merger with a third party, any of which, if pursued,
    could be implemented outside or inside Chapter 11 of the Bankruptcy Code,
    as appropriate.

Off-Balance Sheet Arrangements

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.

Impact of Inflation

Our business
may be significantly or adversely affected by inflation. We generally expect to
pass carrier rate increases and surcharges on to our customers by means of
price increases and surcharges. Direct carrier rate increases could occur over
the short- to medium-term. Due to the high degree of competition in the
marketplace, these rate increases might lead to an erosion of our profit
margins.

Critical Accounting Policies and Use of
Estimates

The
preparation of our unaudited condensed financial statements in accordance with
GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and
liabilities that are not readily apparent from other sources. We evaluate these
estimates including those related to basis of consolidation, business
combinations, revenue recognition, self insurance, accounts receivable and
allowance for doubtful accounts, impairment of tangible and intangible assets
and goodwill. Actual results may differ from these estimates using different
assumptions under different

45

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conditions. We
believe that the following discussion addresses our most critical accounting
policies, which are those that are most important to the portrayal of our
consolidated financial condition and results of operations and require
managements most difficult, subjective and complex judgments.

Revenue
Recognition

Air and Ocean
Freight Services. Revenue is recognized at the time of shipment. The Company
recognizes revenue on air and ocean freight services on a gross basis, in
accordance with Emerging Issues Task Force (EITF) 99-19, Reporting Revenue
Gross versus Net, as a result of the following: the Company is the primary
obligor responsible for providing the service desired by its customer and is
responsible for fulfillment, including the acceptability of the services
ordered by the customer. The Company, at its sole discretion, 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 provides its customers and has the absolute and
complete discretion and right to select the supplier that best serves our
customer needs. In most cases, the Company determines the nature, type,
characteristics, and specifications of the services ordered by the customer.
The Company also assumes credit risk for the amount billed to the customer.

Customs
Brokerage. Revenue is recognized when the necessary documentation for customs
clearance has been completed. This revenue is generated by the fees charged for
providing customs brokerage services. Reimbursement for the disbursements made
on behalf of a customer (principally custom duty) is recorded as a reduction of
expenses incurred in accordance with EITF 01-14, Income Statement
Characterization of Reimbursements Received for Out-of-Pocket Expenses
Incurred.

Logistics Services.
Revenue for warehouse and distribution services is recognized at the time of
receipt or at the time of shipment based on services provided. Storage charges
are recognized on a monthly basis. Revenue for domestic transportation services
is recognized at the time of cargo receipt.

Goodwill

The Company reviews goodwill for impairment annually, or more
    frequently if impairment indicators arise and goodwill is written off when
    impaired. Impairment, if any, would be determined based on an implied fair
    value model for determining the carrying value of goodwill. The impairment
    test is a two-step process. The first step requires comparing the fair value
    of each reporting unit  to its net book value. The Company uses management
    estimates of future cash flows to perform the first step of the goodwill
    impairment test. Estimates made
  by management include assumptions about future conditions such as future
  revenues, gross margins and operating expenses. The second step is only
  performed if impairment is indicated after the first step is performed, as
  it
involves measuring the actual impairment to goodwill. The Company recorded an
    impairment charge of $7,089 in the third quarter of 2007.

Convertible Notes

The Company
accounts for conversion options embedded in convertible notes in accordance
with Statement of Financial Accounting Standards (SFAS) No. 133, Accounting
for Derivative Instruments and Hedging Activities (SFAS 133) and EITF 00-19,
Accounting for Derivative Financial Instruments Indexed to, and Potentially
Settled in, a Companys Own Stock. SFAS 133 generally requires companies to
bifurcate conversion options embedded in convertible notes from their host
instruments and to account for them as free standing derivative financial
instruments in accordance with EITF 00-19. SFAS 133 provides for an exception
to this rule when convertible notes, as host instruments, are deemed to be
conventional as that term is described in the implementation guidance under
Appendix A to SFAS 133 and further clarified in EITF 05-02, The Meaning of
Conventional Convertible Debt Instruments, in EITF 00-19.

In accounting
for the convertible notes, the Company considered the guidance contained in
EITF 00-19 and SFAS 133. In accordance with the guidance provided in EITF
00-19, the Company determined that the conversion feature of the convertible
notes represents an embedded derivative since the note is convertible into a
variable number of shares upon conversion. Accordingly, the convertible notes
are not considered to be conventional convertible debt under EITF 00-19 and
thus the embedded conversion feature must be bifurcated from the debt host and
accounted for as a derivative liability.

Derivatives

The Company
issued warrants and convertible notes that contain embedded derivatives that
require separate valuation. The Company, with the assistance of a third party,
estimates the fair value of its derivatives using available market information
and appropriate valuation methodologies. These derivatives derive their value
primarily based on changes in the price and volatility of the Companys common
stock. Changes in the estimated fair value of the embedded derivatives could
have a material effect on the Companys results of operations. Considerable
judgment is required in interpreting market data to develop the estimates of
fair value. Accordingly, the estimates presented herein are not necessarily
indicative of the amounts, if any, that the Company may eventually pay to
settle these embedded derivatives. The Company recognizes these derivatives as
liabilities in its consolidated balance sheet, measures them at their estimated
fair value and recognizes changes in their estimated fair value in their
consolidated results of operations in the period of change.

Stock-Based Incentive Plans

SFAS No. 123R
Share-Based Payments (SFAS 123R), requires all share-based payments to
employees and non-employee directors, including grants of employee stock
options and employee stock purchase plans, to be recognized in the financial
statements based on their fair values. The Company adopted SFAS 123R, in accounting
for share-based compensation granted under the 2006 Equity Incentive Plan. For
stock options settled in stock, compensation is measured on the grant date
using valuation models. For restricted stock units (RSU) and performance
stock awards (PSA) settled in stock, compensation is measured on the grant
date using the fair values of the Companys common stock. Compensation expense
is recognized for each separately vesting portion of the

46

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award as it is
vested. For stock appreciation rights (SAR) settled in stock, compensation
expense is initially measured on the grant date using a valuation model. For
cash settled options and SARs, compensation expense is recorded over the
vesting period and changes in the fair value between the date of grant and
through when the cash settled options and SARs are exercised are recognized as
compensation expense. For the PSAs, every reporting period until vesting, the
cash settled portion is revalued using valuation models and the stock settled
portion is adjusted for any change in the number of shares expected to be
issued based on the performance criteria. Any change in fair value is
recognized as compensation expense.

Variable Interest Entities

In January
2003, the FASB issued FASB Interpretation No. 46 (FIN 46(R)), Consolidation
of Variable Interest Entities, an Interpretation of ARB No. 51, which was
subsequently revised in December 2003. Generally a variable interest entity, or
VIE, is an entity with one or more of the following characteristics, (a) the total
equity investment at risk is not sufficient to permit the entity to finance its
activities without additional subordinated financial support; (b) as a group
the holders of the equity investment at risk lack (i) the ability to make
decisions about an entitys activities through voting or similar rights, (ii)
the obligation to absorb the expected losses of the entity; or (c) the equity
investors have voting rights that are not proportional to their economic
interests and substantially all of the entitys activities either involve, or
are conducted on behalf of, an investor that has disproportionately few voting
rights. FIN 46(R) requires a VIE to be consolidated in the financial statements
of the entity that is determined to be the primary beneficiary of the VIE. The
primary beneficiary, as is applicable to the Companys circumstances with
Seamaster Logistics (China) Ltd, is Seamaster Logistics (Holdings) Ltd. The
Company has adopted FIN 46(R) effective April 1, 2007.

47

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Contractual
Obligations

We have
entered into contracts with various third parties in the normal course of
business that will require substantial future payments. The following table
illustrates the contractual obligations (in thousands) of the operating
companies as of September 30, 2007:

|                                         |  |                        |         |                 |   |           |  |           |        |                  |   |         |  |   |       | 
|---------------------------------------- |  | ---------------------- | ------- | --------------- | - | --------- |  | --------- | ------ | ---------------- | - | ------- |  | - | ----- | 
|                                         |  | Payments due by period |        
|                                         | 
|                                         |  | Total                  |         | Less than1 year |   | 1-3 years |  | 3-5 years |        | More than 5years |  
|                                         |  |                        |         |                 |   |           |  |           |        |                  |  
|Senior
 secured debt                     |  | $                      | 51,000  |                 | $ | 8,000     |  | $         | 16,000 |                  | $ | 27,000  |  | $ | —     | 
|                                         |  |                        |         |                 |   |           |  |           |        |                  |   |         |  |   |       | 
|Interest on
 senior secured debt         |  |                        | 17,711  |                 |   | 5,785     |  |           | 8,759  |                  |   | 3,167   |  |   | —     | 
|                                         |  |                        |         |                 |   |           |  |           |        |                  |   |         |  |   |       | 
|Capital
 leases                          |  |                        | 1,368   |                 |   | 831       |  |           | 537    |                  |   | —       |  |   | —     | 
|                                         |  |                        |         |                 |   |           |  |           |        |                  |   |         |  |   |       | 
|Interest on
 capital leases              |  |                        | 98      |                 |   | 72        |  |           | 26     |                  |   | —       |  |   | —     | 
|                                         |  |                        |         |                 |   |           |  |           |        |                  |   |         |  |   |       | 
|Operating
 leases                        |  |                        | 51,450  |                 |   | 14,157    |  |           | 22,384 |                  |   | 12,094  |  |   | 2,815 | 
|                                         |  |                        |         |                 |   |           |  |           |        |                  |   |         |  |   |       | 
|Contractual
 obligations and other loans |  |                        | 100,794 |                 |   | —         |  |           | —      |                  |   | 100,794 |  |   | —     | 
|                                         |  |                        |         |                 |   |           |  |           |        |                  |   |         |  |   |       | 
|                                         |  | $                      | 222,421 |                 | $ | 28,845    |  | $         | 47,706 |                  | $ | 143,055 |  | $ | 2,815 | 
|                                         |  |                        |         |                 |   |           |  |           |        |                  |   |         |  |   |       | 

Senior Secured
Credit Facility

On November 8,
2006, as part of the financing for the acquisitions, we obtained a senior
secured credit facility from a financial institution and certain other lenders,
consisting of (i) a $10 million revolver and (ii) a $55 million term loan. Our
senior secured credit facility has a five-year term and we paid a two percent
up front closing fee. Revolving loans that constitute reference rate loans will
bear interest at a rate per annum equal to two (2%) percent plus the greater of
(i) the reference rate then in effect and (ii) six (6%) percent. Revolving
loans that constitute LIBOR rate loans will bear interest at a rate per annum
equal to three (3%) percent plus the greater of (i) the LIBOR rate then in
effect and (ii) four (4%) percent. Term loans that constitute reference rate
loans will bear interest at a rate per annum equal to the applicable margin
plus the greater of (i) the reference rate then in effect and (ii) six (6%)
percent. Term loans that constitute LIBOR rate loans will bear interest at a
rate per annum equal to the applicable margin plus the greater of (i) the LIBOR
rate then in effect and (ii) four (4%) percent. Until the agent under the
senior credit facility receives our financial statements following the last day
of the fourth full fiscal quarter after November 8, 2006, prior to the
amendment of our senior secured credit facility, the applicable margin was
equal to the greater of (i) the amount determined as set forth in the grid
below based on the ratio of our Net Senior Debt to EBITDA for the immediately
preceding twelve (12) month period ending as of the last day of each fiscal
quarter prior thereto and (ii) four and one quarter (4.25%) percent per annum.
Thereafter, on a quarterly basis, the applicable margin shall be reset based
upon the following grid:

|                                |         |  |                                       |   |                                           |      |  
|------------------------------- | ------- |  | ------------------------------------- | - | ----------------------------------------- | ---- | -
|Net Senior Debt/
 TTM(1) EBITDA |         |  | Applicable Margin
 (LIBOR Rate Loans) |   | Applicable
 Margin(Reference Rate
 Loans) |     
|                                |         |  |                                       |   |                                           |     
|>3.0x                           |         |  | 4.75                                  | % |                                           | 3.75 | %
|> 2.5x                          | <= 3.0x |  | 4.50                                  | % |                                           | 3.50 | %
|> 2.0x                          | <= 2.5x |  | 4.25                                  | % |                                           | 3.25 | %
|> 1.5x                          | <=2.0x  |  | 4.00                                  | % |                                           | 3.00 | %
|                                | <= 1.5x |  | 3.75                                  | % |                                           | 2.75 | %



|    |                                                   
|--- | --------------------------------------------------
|(1) | TTM is an
 abbreviation for trailing twelve months

The applicable
margins were increased in connection with the restructuring described below
under the caption Amendments to Senior Secured Credit Facility.

Upon the
occurrence and during the continuation of an event of default, the interest
rate(s) then in effect with respect to the obligations under the senior credit
facility will be increased by three percent (3%) per annum. As described
herein, we were in default of certain covenants under our senior
credit facility, and the interest rates were increased during the pendency of
    the default.

The revolver unused line fee
equals one-half of one percent (0.50%) per annum calculated upon the amount by
which the total revolving credit commitments exceeds the sum of the average
daily principal balance of the outstanding revolving loans plus the average
daily undrawn amount of all letters of credit for the immediately preceding
month, payable monthly. The revolver includes a

48

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letter of
credit line of up to an aggregate amount of $7.0 million. The letter of credit
fee is three percent (3.00%) per annum on the average daily maximum amount
available to be drawn under all of such letters of credit, payable monthly. We
are also responsible for any additional third-party letter of credit issuer fees and/or
cash collateral requirements. The servicing fee equals $25, payable quarterly
in advance.

Our senior
secured credit facility is secured by a first priority security interest in substantially
all of our existing and future assets and the other borrowers that are party to
the senior credit facility, including all of their plant property and equipment
and accounts receivable, and the proceeds thereof (subject to permitted liens).
In addition to the scheduled quarterly term loan principal payments, we are
required to make an annual principal payment each year in an amount equal to
fifty percent (50%) of excess cash flow for the immediately preceding fiscal
year. Excess cash flow is generally defined as our EBITDA for the applicable
period less consolidated net interest expense less the cash portion of capital
expenditures made during such period less scheduled cash principal payments
made on account of debt during such period less all cash prepayments on account
of our senior secured credit facility (other than payments on account of
revolving loans that do not permanently reduce the revolving commitments by the
amount of such payment(s)) during such period less income taxes paid or accrued
during such period less special incentive bonuses, earn-outs and deferred
payments of purchase price for the acquisitions permitted to be consummated
under the senior credit facility made during such period less any closing fee,
loan servicing, unused line fee, letter of credit fee and prepayment fee paid
during such period. The excess cash flow payments shall be applied to the term
loan, in inverse order of maturity. Our credit facility contains affirmative
and negative covenants, and financial covenants customarily found in loan
agreements for similar financings including, but not limited to, (i) a minimum
earnings before interest, taxes, depreciation and amortization referred to as
EBITDA covenant measured on a trailing twelve months basis, referred to as TTM,
(ii) a maximum total senior debt outstanding to TTM EBITDA ratio covenant,
(iii) a minimum fixed charge coverage ratio covenant, (iv) a maximum capital
expenditure covenant, and (v) key man provisions with respect to members of
management. An early termination fee is due if we terminate the senior credit
facility for any reason (other than as described below) prior to the third
anniversary of such effective date and is payable as follows: (i) two percent
(2%) of the total loan commitment if we terminate the senior credit facility on
or prior to the second anniversary of the effective date of the senior credit
facility and (ii) one percent (1%) of the total loan commitment if we terminate
the senior credit facility after the second anniversary of such effective date
and on or prior to the third anniversary of such effective date.

The deferred
financing cost in connection with the senior secured credit facility amounted
to approximately $6.2 million. This cost will be amortized and charged to
expense over the next five years.

The loan
agreement relating to our senior secured credit facility provides that, we may
acquire the stock (and/or other equity interests) and/or assets of other
companies provided that the following conditions are satisfied: (i) the senior
agent shall have received not less than ten (10) business days prior written
notice of the proposed acquisition and certain information related thereto;
(ii) the assets acquired shall constitute assets used in, or the stock/equity
interests shall be in an operating company or a division of an operating
company that engages in, a line of business substantially similar,
complimentary or related to the business that we are engaged in as of the date
of the loan agreement; (iii) as of the date of any such acquisition and any
payment in respect thereof, and after giving effect thereto, the sum of the
excess availability plus the qualified cash shall have been not less than $3.0
million for each of the ten (10) consecutive business days prior to the date of
such acquisition or payment and shall be not less than $3.0 million as of the
date of such acquisition or payment (and after giving effect thereto); (iv) the
aggregate amount of all consideration paid for all permitted acquisitions
(including any earn-outs, deferred purchase price payments and special
incentive bonuses to employees, officers, directors and/or sellers of the
acquired business in connection with such permitted acquisition, including the
value of any capital stock, warrants or other equity interests) shall not
exceed $5.0 million; (v) the senior agent shall have received certain financial
statements and projections with respect to the acquired business and/or company
and our detailed projections through the maturity date giving pro forma effect
as of the last day of the fiscal month most recently ended to such acquisition
and all related transactions, demonstrating pro forma compliance with all
financial covenants set forth in the loan agreement; (vi) the senior agent
shall have received certain other security agreements and guarantees required
under the loan agreement with respect to the acquired business and/or company;
(vii) in the case of the acquisition of the capital stock of another person or
entity, the board of directors (or other comparable governing body) of such
other person or entity shall have duly approved such acquisition and such
person or entity shall not have announced that it will oppose such acquisition
or shall not have commenced any action which alleges that such acquisition will
violate applicable law; and (viii) no default or event of default under the
loan agreement shall exist or have occurred as of the date of such acquisition
or the sale or issuance of any shares or any payment in respect thereof and
after giving effect to such acquisition and all related transactions or the
sale or issuance of any shares or any payment in connection therewith.

Amendments to senior
secured credit facility

On May 21,
2007, in connection with restructuring the senior secured credit facility, the
Company agreed to (i) pay the senior secured creditor $265,000, (ii) an
increase in the interest rate on the loan facilities, and (iii) a modification
of the financial covenants. In exchange, the lenders waived all then existing
declared events of default. As part of restructuring the debt of the Company,
    the senior secured credit facility was amended to increase the applicable
    margins by 0.50%. Under the amended credit facility, the applicable margins
    per annum on LIBOR rate loans now range from 3.75% to 5.25% and for reference
    rate loans from 2.75% to 4.25% subject to the condition that the applicable
    margin will not be less than 5.25% during the period from May 21, 2007 until
    the financial statements are delivered to agent after the last day of the
fourth full fiscal quarter after the effective date, as defined.

49

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In addition,
on and after May 21, 2007, as part of the restructuring of the debt of the
Company, the Company agreed that the senior secured lenders have no obligation
to make any revolving loans to the Company under the revolving loan facility,
but may do so at their discretion.

On
    November 19, 2007, in connection with a further restructuring the senior
    secured credit facility, the Company agreed to (i) pay the senior secured
    creditor $250, (ii) an increase in the interest rate on the loan facilities,
    and (iii) a modification of the financial covenants. In exchange, the lenders
    waived all then existing events of default. As part of restructuring the
    debt of the Company, the senior secured credit facility was amended to increase
    the applicable margins by 2%. Under the amended credit facility, the applicable
    margins per annum on LIBOR rate loans now range from 5.75% to 6.75% and for
    reference rate loans from 4.75% to 5.75%.



Convertible Notes
  and Warrants

To finance the
acquisitions, Maritime Logistics entered into a securities purchase agreement
with certain investors, pursuant to which the investors agreed to purchase (i)
secured notes in an aggregate principal amount of $65.0 million, which notes
were originally convertible at the option of the holder into shares of our
common stock at an initial price equal to $11.00 per share (subject to
adjustment) and (ii) warrants to acquire in the aggregate up to 40% of the
number of shares of common stock issuable upon conversion of the notes,
exercisable until the fifth anniversary of November 8, 2006 at an original
initial exercise price equal to $11.00 per share (subject to adjustment)
(referred to herein as the note financing). On November 8, 2006, after the
recapitalization, we entered into a joinder agreement pursuant to which we
assumed the Maritime Logistics obligations under the securities purchase
agreement and consummated the note financing. The Conversion and exercise
prices of the notes and warrants, respectively, have been reduced in connection
with the restructuring described below under the caption Restructured
convertible notes.

The notes bear
interest at a rate per annum equal to LIBOR plus the applicable margin then in
effect. Until the holders of the notes receive our consolidated financial
statements following the last day of the fourth full fiscal quarter after
November 8, 2006, the original applicable margin was equal to the greater of
(i) the amount determined as set forth in the grid below based on the ratio of
Net Senior Debt to TTM EBITDA for the immediately preceding twelve (12) month
period ending as of the last day of each fiscal quarter prior thereto and (ii)
three and one quarter (3.25%) percent per annum. Thereafter, on a quarterly
basis, the applicable margin shall be reset based upon the following grid:

|                            |  |                    |   | 
|--------------------------- |  | ------------------ | - | 
|Net Senior
 Debt/TTM EBITDA |  | Applicable
 Margin |  
|                            |  |                    |  
|>3.0x                       |  | 3.75               | % | 
|>2.5x
 <=3.0x               |  | 3.50               | % | 
|>2.0x
 <=2.5x               |  | 3.25               | % | 
|>1.5x
 <=2.0x               |  | 3.00               | % | 
|<=1.5x                      |  | 2.75               | % | 

The foregoing
applicable margins were increased in connection with the restructuring of our
convertible notes. See restructured convertible notes below.

The notes
issued in connection with our November 8, 2006 financing provide that, after
the date thereof, we may acquire the stock (or other equity interests) and/or
assets of other companies provided that the following conditions are satisfied:
(i) immediately prior to, and after giving effect thereto, no default or event
of default under the noted shall have occurred and be continuing or would
result there from; (ii) all applicable security agreements, pledge agreements
and guarantees required under the notes with respect to the acquired business
and/or company shall have been delivered; (iii) we are in compliance with the
financial covenants set forth in the notes on a pro forma basis after giving
effect to such acquisition as of the last day of the fiscal quarter most
recently ended; (iv) the cash consideration for any such acquisition (excluding
therefrom earnouts, deferred purchase price payments, special incentive bonuses
and subordinated indebtedness derived or arising in connection therewith) shall
not exceed the amount of notes then available in respect of the permitted
indebtedness under the notes plus our cash and cash equivalents on hand
provided that we must have at least $2.5 million of cash and cash equivalents
on hand and/or availability under our senior credit facility after giving
effect to the applicable permitted acquisition; and (v) the assets acquired
shall constitute assets used in, or the stock/equity interests acquired shall
be in an operating company or a division of an operating company that engages
in, a line of business substantially similar, complimentary or related to the
business that we are engaged in as of the date of the notes.

The notes also
provide that our contingent indebtedness arising pursuant to earn-outs and/or
deferred purchase price payments under any permitted acquisition(s) consummated
after the date thereof shall not exceed $30 million in the aggregate.
Additionally, the notes provide that we may incur contingent indebtedness in
the form of special incentive bonuses to employees, directors and/or officers
and/or to sellers of assets and/or equity interests, in each case, in connection
with any permitted acquisitions consummated, provided that the sum of (a) the
aggregate amount of payments in respect of such indebtedness to employees,
directors and/or officers and/or to such sellers, plus (b) the aggregate amount
of cash consideration paid in respect of all permitted acquisitions (excluding
earnouts and deferred purchase price payments) other than from the proceeds of
the common stock financing which we completed in November 2006 and any other
cash on hand, shall not exceed in the aggregate for (a) and (b), $7.5 million.

A holder may
require us to redeem the notes upon an event of default or upon a change of
control, in each case at a premium over the principal amount of the notes being
redeemed. The premium in the event the note holders require us to redeem their
notes due to an event default is the greater of (x) the product of (i) the
conversion amount to be redeemed together with accrued interest and unpaid
interest and late charges, if any are accrued up to and including the
conversion date , in respect of such conversion amount, and (ii) the

50

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Redemption
Premium, as defined (ranging from 100% to 120%), or, (y) the product of (a) the
closing sale price of the common stock on the date immediately preceding such
event of default multiplied by (b) the number of shares of common stock into
which the amount set forth in clause (x) would have converted. The premium in
the event of a change of control is equal to the product of the amount of
principal being redeemed multiplied by the greater of (a) the quotient of the
closing sale price of our common stock immediately prior to the announcement of
the change of control divided by the conversion price and (b) 120% in the first
18 months, 115% in the period from 18 to 42 months and 110% thereafter. We may
redeem all or any portion of the notes after the third anniversary of the
issuance of the notes, if the closing sale price of our common stock is greater
than 180% of the conversion price then in effect for each of the previous 20
trading days ending and certain other conditions are satisfied. If we redeem
the notes, we must pay the principal and accrued interest through the date of
redemption.

The
indebtedness evidenced by the notes is secured indebtedness, and is subordinate
to our senior debt financing. As security for our obligations under the notes,
we and certain of our subsidiaries executed a security agreement, pursuant to
which we and such subsidiaries granted a security interest in substantially all
of their assets to the collateral agent for the benefit of the holders of the
notes (which liens are subordinate to the liens that secure the senior debt
financing).

The warrants
issued in connection with the notes also provide for a cash payment in the
event of a change of control equal to the Black Scholes value of the
unexercised portion of the warrant which may result in a significant cash
payment to the holders of the warrants.

We recorded
deferred financing costs of approximately $6.1 million, including expenses in
connection with this note financing. In addition, based upon lattice models
utilizing discount cash flows and Black-Scholes valuation, we recorded issuance
costs of approximately $1.4 million, in connection with the warrants issued to
the placement agent. These costs will be amortized and charged to expense over
the next five years.

We also
entered into an amended registration rights agreement with the buyers of the
notes, whereby we agreed to provide certain registration rights with respect
    to the common stock underlying the notes and warrants and the shares held
    by management and the security holders of Aerobic prior to the merger under
    the Securities Act of 1933 and the rules and regulations promulgated there
    under. As described above, while we have obtained a waiver of the default
    of our obligations under the registration rights agreement, we are nevertheless
    obligated to pay the holders of the notes and warrants substantial penalty
    payments. See Liquidity
and Capital Resources.

Restructured
convertible notes

Convertible Notes.On
May 21, 2007, as part of the restructuring of the Companys debt, the Company
restructured the terms of the existing $65 million of secured convertible notes
and accompanying warrants. After the restructuring the convertible notes are
convertible at the option of the holder into shares of the Companys common
stock at an initial conversion price equal to $5.50 per share (subject to
adjustment) and the warrants are exercisable at any time prior to November 8,
2011 at an initial exercise price equal to $5.50 per share (subject to
adjustment). As described herein, we were  in default of certain
covenants under our convertible notes. Consequently, we were again subject to
the default interest rates contained in the operative agreements during the pendency
of such defaults.

The
convertible notes bear interest at a rate per annum equal to LIBOR plus the
applicable margin then in effect. As of May 21, 2007, the applicable margins on
the convertible notes range from 3.50% to 4.50% per annum subject to the
condition that the applicable margin shall not be less than 4.50% during the
period from November 8, 2006 until the financial statements are delivered to the
applicable holder after the fourth full fiscal quarter after November 8, 2006.
Further, the interest payment on the convertible notes for the five (5)
consecutive calendar quarters commencing on the quarter ended June 30, 2007 is
not payable until the earlier of the maturity date, November 8, 2011, or the
date on which the notes are converted to common stock of the Company. The debt
issuance cost at the closing amounted to approximately $2.6 million.

In exchange
for $2 million of new convertible notes (as described below), the holders of
the convertible notes waived the then existing penalties payable to them
pursuant to the registration rights agreement relating to the Companys
failure to cause the shares of common stock underlying the convertible notes
and warrants to become registered and extended the deadline for causing such
shares to be registered (classified in the unaudited condensed balance sheet
as of September 30, 2007 as accrued registration rights expense). The agreement
required the Company to file an amended registration statement with the
Securities and Exchange Commission within 30 days of the amendment and for the
registration statement to become effective within 90 days from the date of
filing. While we filed the amended registration statement in a timely fashion,
the registration statement was not declared effective within 90 days of the
filing date, as required. Consequently, as described above, while we obtained
waivers with respect to our defaults under the registration
rights agreements, we continue to incur substantial cash penalties. In connection
with the restructuring of the convertible notes the exercise price of the warrants
originally issued in connection with the convertible notes was reduced from $11.00
to $5.50.

On November 19, 2007, in connection with a further restructuring
    of the senior secured notes, we received from our senior secured note holders
    waivers of all existing defaults under our senior secured convertible notes,
    in exchange for which, among other terms and conditions, we agreed to the
    following: to pay the note holders $250 in the form of additional notes;
    to use our best efforts, subject to certain conditions, to cause two persons
    nominated by a certain note holder to be appointed to our board of directors;
    and, effective November 23, 2007, to increase the interest rate on the notes,
    by 150 basis points, and reduce the conversion price of the notes and exercise
    price of the warrants associated with the notes from $5.50 per share to $3.00
    per share. The senior secured note holders also agreed to reset the financial
    covenants relating to EBITDA and the Fixed Charge Coverage Ratio (in each
case, as defined).

Private Placement of
Convertible Notes

Additional
Principal of Restructured Convertible Notes. To raise working capital, in
connection with the restructuring, we also completed a private placement of
senior secured convertible notes and warrants resulting in $15 million in new
money from the existing convertible note holders and certain members of
management. Of the $15 million in convertible notes, we sold $12.5 million to
existing convertible note holders. This $12.5 million was added pro rata to the
principal amount of each holders restructured convertible note. In connection
with the sale of the convertible notes, we issued new warrants (exercisable for
up to 50% of the

51

---



number of
shares of common stock issuable upon conversion of the notes), which have
substantially the same terms as the restructured warrants.

An aggregate
default interest payment of $400,833 in connection with a failure to deliver
timely our quarterly financial statements was added pro rata to the principal
amount of the convertible notes in lieu of paying such interest in cash and
will be payable on the earlier of November 8, 2011 or the date on which the
notes are converted to common stock of the Company. As described herein, we were
    in default of certain covenants under our convertible notes. Consequently,
    we were subject to the default interest rates contained in the operative
agreements, during the pendency of such defaults.

We sold $2.5
million of the $15 million additional convertible notes and warrants on
substantially the same terms, to members of our management. We issued a
convertible note of $713 to one of our professionals in satisfaction of fees
owed. The new convertible notes are convertible at the option of the holder
into shares of our common stock at an initial conversion price equal to $5.50
per share (subject to adjustment), and the new warrants are exercisable until
November 8, 2011 at an initial exercise price equal to $5.50 per share (subject
to adjustment). The new convertible notes bear interest at a rate per annum
equal to LIBOR plus the applicable margin then in effect. As of May 21, 2007,
the applicable margins on the restructured convertible notes per annum range
from 3.50% to 4.50% subject to the condition that the applicable margin shall
not be less than 4.50% during the period from May 21, 2007 until the financial
statements are delivered for the quarter ended December 31, 2007. Further, the
interest payment on the new convertible notes for the five (5) consecutive
calendar quarters commencing on the quarter ended June 30, 2007 is not payable
until the earlier of the maturity date, May 21, 2012 for the new convertible
notes, or the date on which the notes are converted into our common stock.

Accrued Registration Rights Penalties.

Convertible Notes and Warrants.
In exchange for $2 million of restructured convertible notes, the holders of
the convertible notes on May 21, 2007, in connection with the restructuring of
the debt of the Company, waived their then existing penalties pursuant to the
registration rights agreement relating to our failure to cause the shares of
our common stock underlying the convertible notes and warrants to become
registered and extended the deadline for causing such shares to be registered.
A pro-rata portion of this $2 million was added to the principal amount of each
holders restructured convertible note. Interest is payable at the same
rate as the convertible notes. The agreement required the Company to file an
amended registration statement with the Securities and Exchange Commission within
30 days of the amendment (which has been done) and for the registration statement
to become effective within 90 days from the date of filing (as noted above the
registration statement was not declared effective within 90 days of the filing
date, as required (and is still not effective). Consequently, as described
above, while we obtained waivers with respect to our defaults of our obligations
under the registration rights agreements, we continue to incur substantial cash
penalties.

We may redeem
all or any portion of the restructured convertible notes and the new notes on
or before May 21, 2010, if the closing sale price of our common stock is
greater than 180% of the conversion price then in effect for each of the
previous 20 trading days and certain other conditions are satisfied.

The
convertible notes are secured by substantially all of our assets and are
subordinate to our senior secured credit facility.

Private Placement Notes.
On May 21, 2007, in connection with the restructuring of the debt of the
Company, a majority of the holders of the common stock of the Company waived
certain then existing penalties pursuant to the registration rights agreement
relating to the Companys failure to cause certain shares of common stock and
shares of common stock underlying warrants to become registered and extended
the deadline for causing such shares to be registered, in exchange for all of
the participants in the Companys prior private placement of common stock
receiving, pro rata, unsecured convertible notes in the aggregate principal
face amount of $1 million (classified in the unaudited condensed consolidated
balance sheet as of June 30, 2007 as accrued registration rights expense).

The unsecured
convertible notes are convertible at the option of the holder into shares of
the Companys common stock at an initial conversion price equal to $5.50 per
share (subject to adjustment). There are no financial covenant requirements and
limited reporting requirements in conjunction with the unsecured convertible
notes. Interest is payable at the same rate as the convertible notes.

52

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Contingent Payments

The following
table summarizes our estimated contingent based earn-out payments for the next
five fiscal years indicated based on achievement of certain earn-out targets
(in thousands):

|                                                           |  |                                |       |      |   |       |   |      |       |      |   |       |   |   |       |   |   |        |  
|---------------------------------------------------------- |  | ------------------------------ | ----- | ---- | - | ----- | - | ---- | ----- | ---- | - | ----- | - | - | ----- | - | - | ------ | -
|                                                           |  | Fiscal Year Ended December 31, |      
|                                                           |  |                                |      
|                                                           |  | 2007                           |       | 2008 |   | 2009  |   | 2010 |       | 2011 |   | Total |  
|                                                           |  |                                |       |      |   |       |   |      |       |      |   |       |  
|                                                           |  |                                |       |      |   |       |   |      |       |      |   |       |   |   |       |   |   |        |  
|Earn-out payments:                                         |  |                                |       |      |   |       |   |      |       |      |   |       |   |   |       |   |   |        |  
|                                                           |  |                                |       |      |   |       |   |      |       |      |   |       |   |   |       |   |   |        |  
|TUG(1)                                                     |  | $                              | 1,483 |      | $ | 1,483 |   | $    | 1,483 |      | $ | 1,483 |   | $ |      |   | $ | 5,932  |  
|                                                           |  |                                |       |      |   |       |   |      |       |      |   |       |   |   |       |   |   |        |  
|SeaMaster(2)                                               |  |                                | 1,300 |      |   | 2,275 |   |      | 3,575 |      |   | 3,575 |   |   | 3,575 |   |   | 14,300 |  
|                                                           |  |                                |       |      |   |       |   |      |       |      |   |       |   |   |       |   |   |        |  
|TUG New York Bonus (3)                                     |  |                                | 60    |      |   | 70    |   |      | 81    |      |   | 90    |   |   | 102   |   |   | 403    |  
|                                                           |  |                                |       |      |   |       |   |      |       |      |   |       |   |   |       |   |   |        |  
|TUG Los Angeles and Miami Bonus (3)                        |  |                                | 112   |      |   | 120   |   |      | 135   |      |   | 143   |   |   | 145   |   |   | 655    |  
|                                                           |  |                                |       |      |   |       |   |      |       |      |   |       |   |   |       |   |   |        |  
|SeaMaster Bonus (3)                                        |  |                                | 550   |      |   | 550   |   |      | 550   |      |   | 550   |   |   | 550   |   |   | 2,750  |  
|                                                           |  |                                |       |      |   |       |   |      |       |      |   |       |   |   |       |   |   |        |  
|                                                           |  |                                |       |      |   |       |   |      |       |      |   |       |   |   |       |   |   |        |  
|Total                                                      |  | $                              | 3,505 |      | $ | 4,498 |   | $    | 5,824 |      | $ | 5,841 |   | $ | 4,372 |   | $ | 24,040 |  
|                                                           |  |                                |       |      |   |       |   |      |       |      |   |       |   |   |       |   |   |        |  
|                                                          
|                                                           |  |                                |       |      |   |       |   |      |       |      |   |       |   |   |       |   |   |        |  
|Earn-out targets(4)                                        |  |                                |       |      |   |       |   |      |       |      |   |       |   |   |       |   |   |        |  
|                                                           |  |                                |       |      |   |       |   |      |       |      |   |       |   |   |       |   |   |        |  
|                                                          
|TUG(1)                                                     |  |                                | 2,200 |      |   | 2,420 |   |      | 2,660 |      |   | 2,930 |   |   |      |   |   | 10,210 |  
|                                                           |  |                                |       |      |   |       |   |      |       |      |   |       |   |   |       |   |   |        |  
|SeaMaster(2)                                               |  |                                | 2,000 |      |   | 3,500 |   |      | 5,500 |      |   | 5,500 |   |   | 5,500 |   |   | 22,000 |  
|                                                           |  |                                |       |      |   |       |   |      |       |      |   |       |   |   |       |   |   |        |  
|                                                           |  | $                              | 4,200 |      | $ | 5,920 |   | $    | 8,160 |      | $ | 8,430 |   | $ | 5,500 |   | $ | 32,210 |  
|                                                           |  |                                |       |      |   |       |   |      |       |      |   |       |   |   |       |   |   |        |  
|                                                           |  |                                |       |      |   |       |   |      |       |      |   |       |   |   |       |   |   |        |  
|Combined earn-outs targets for TUG and
 SeaMaster          |  | $                              | 4,200 |      | $ | 5,920 |   | $    | 8,160 |      | $ | 8,430 |   | $ | 5,500 |   | $ | 32,210 |  
|                                                           |  |                                |       |      |   |       |   |      |       |      |   |       |   |   |       |   |   |        |  
|Earn-outs for TUG and SeaMaster as a
 percentage of target |  |                                | 66.3  | %    |   | 63.5  | % |      | 62.0  | %    |   | 60.0  | % |   | 65.0  | % |   | 62.8   | %
|                                                           |  |                                |       |      |   |       |   |      |       |      |   |       |   |   |       |   |   |        |  

Notes:

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The TUG
 earn-outs are contractual commitments based upon agreed EBIT targets. The
 earn-out payments set out above are projected payments based upon estimates
 by TUG. In addition, there are contingent earn-out payments based upon
 achievement of EBIT above the targets. If EBIT targets are not met, the
 earn-out payments will be less than those set forth above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|(2) | The
 SeaMaster earn-outs are contractual commitments based on a payment of 65% of
 projected EBITDA in year one, two and three. The earn-out payments set out
 above are projected payments based upon estimates by SeaMaster. Actual
 payments may vary and depend on the actual EBITDA generated by SeaMaster,
 during years one, two and three, as defined in the SeaMaster acquisition
 agreement. After year three, the SeaMaster enterprise value will be
 determined based upon the average of the first three years EBITDA, multiplied
 by six. Any payments made from inception, and the value of the shares owned
 by the selling stockholder of SeaMaster valued at the fair market value at
 end of year three, will be deducted from the enterprise value calculated
 above. Any remaining balance due, if any, will be paid in cash in years four
 and five, subject to SeaMaster using its best efforts to maintain the year
 three EBITDA level. If the three year average EBITDA of SeaMaster, pursuant
 to the terms of the SeaMaster acquisition agreement, is greater than $3.67
 million, than the total SeaMaster earn-out payment will exceed the amounts
 set out above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|(3) | The
 contingent bonus payments to certain of our key employees are based on EBITDA
 targets set forth in three separate bonus agreements with these employees.
 Pursuant to the agreements, Mr. Wu and Mr. Lee, two of our key employees are
 entitled to payments subject to the TUG and Sea Master businesses achieving
 certain EBITDA targets established in the agreements. The TUG New York bonus
 is based on targets of the business which, prior to our acquisition of TUG,
 was conducted by TUG New York, Inc. The equivalent payments for TUG Los
 Angeles and Miami bonus is based on EBITDA targets of the business which,
 prior to our acquisition of TUG, was conducted by TUG Logistics, Inc. (Los
 Angeles) and TUG Logistics (Miami), Inc. and the SeaMaster China Bonus is
 based on the targets set forth in the SeaMaster acquisition agreement. In
 addition, Mr. Wu and Mr. Lee are entitled, under the Miami and Los Angeles
 Bonus Agreement to receive an additional $0.20 for each dollar by which the
 EBITDA target is exceeded up to an EBITDA target of $200 and thereafter an
 additional $0.30 for each dollar by which the EBITDA target is exceeded up to
 a maximum EBITDA cap. Mr. Wu and Mr. Lee are also entitled to receive an
 additional payment of $0.30 for each dollar by which the EBITDA target is
 exceeded under the New York bonus agreement. The EBITDA targets (i) for the
 TUG New York Bonus payments are $500, $535, $570, $600 and $640 in each of
 the years, (ii) for the TUG Los Angeles and Miami bonus payments $2.2
 million, $2.24 million, $2.66 million, $2.93 million and $3.22 million in
 each of the years, and (iii) for the SeaMaster bonus payments, $3.67 million
 in each of the years.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|(4) | Does not
 include earn-out targets for the TUG New York Bonus, TUG Los Angeles and
 Miami or SeaMaster/TUG China bonus payment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    



53

---



In the event
we undergo a change in control, the selling shareholders of TUG will receive
their estimated unrealized earn-out payments of approximately $15.5 million in
cash and stock and a pro rata amount thereof if the change in control occurs
prior to November 8, 2009.

In the event
we undergo change in control, the principal selling shareholder of SeaMaster
will receive its unrealized earn-out payment (up to approximately $22.5 million
less any prior earn-out payments) provided, that, if the change in control
occurs within 3 years of the date of consummation of the acquisition, it shall
receive six times the three year average EBITDA (as defined in the SeaMaster
stock acquisition agreement) of SeaMaster, less any prior earn-out payments.

Recent Accounting Pronouncements

As of the
filing of this report, no new accounting pronouncements were issued that are
expected to have a material impact on the Companys consolidated financial
position or results of operations.

Subsequent Events

In
    November, 2007 the Company received conditional permission by governmental
    authorities in Shanghai, Peoples Republic of China, to acquire SeaMaster
    Logistics (China) Ltd (aka Young Jet International Logistics, Inc.) through
    its wholly-owned Chinese subsidiary, SeaMaster Logistics (Shanghai) Ltd.
    The Company is completing this process with local governmental authorities.

On
    November 19, 2007, the Company received from its senior secured lenders waivers
    of all existing defaults under its senior secured credit facility, in exchange
    for which, the Company, among other terms and conditions, agreed to (i) pay
    the senior lender a $250 cash amendment fee and (ii) an increase in the interest
    rates on certain types of loans. The senior secured lender also agreed to
    reset the financial covenants relating to EBITDA and the Fixed Charge Coverage
    Ratio (in each case, as defined).

Additionally,
    on November 19, 2007, the Company received from its senior secured note holders
    waivers of all existing defaults under its senior secured convertible notes,
    in exchange for which, the Company, among other terms and conditions, agreed
    to the following: to pay the note holders $250 in the form of additional
    notes; to use its best efforts, subject to certain conditions, to cause two
    persons nominated by a certain note holder to be appointed to its board of
    directors; and, effective November 23, 2007, to increase the interest rate
    on the notes, by 150 basis points, and reduce the conversion price of the
    notes and exercise price of the warrants associated with the notes from $5.50
    per share to $3.00 per share. The senior secured note holders also agreed
    to reset the financial covenants relating to EBITDA and the Fixed Charge
    Coverage Ratio (in each case, as defined).



54

---



ITEM 3. Quantitative And Qualitative
Disclosures About Market Risk

Interest Rates.

We are exposed
to changes in interest rates as a result of our financial activities with
respect to our borrowings under the senior credit facility and the notes
issued. Borrowings under these credit agreements bear interest at variable rates
based on a LIBOR margin pricing grid adjusted quarterly, based on our leverage
ratio. A 1% change in interest rates would affect our interest expense by approximately
    $1.4 million per year.

We have a $55
million senior credit facility with a five-year term. The senior credit
facility, as amended, bears interest at the rate set forth in the disclosure
concerning our Senior Credit Facility contained in this report.

Additionally,
our notes are convertible at the option of the holder into shares of common
stock and mature on the fifth anniversary of their issuance and bear interest
at the interest rate set forth in the disclosure concerning our Convertible
Notes contained in this report. The principal amount of the notes does not
amortize during the life of the notes, but is subject to a balloon payment at
the end of the term should the notes not be in converted into common stock
prior to maturity.

Foreign Currency Exposure.

Our worldwide
operations will necessitate that we deal with a multitude of currencies other than
the U.S. dollar. This results in our potentially being exposed to the inherent
risks of the international currency markets and governmental interference. Some
of the countries where we maintain offices and/or agency relationships have
strict currency control regulations which influence our ability to hedge
foreign currency exposure. We plan to try to compensate for these exposures by
accelerating international currency settlements among our offices or agents. We
may enter into foreign currency hedging transactions only in limited locations
where there are regulatory or commercial limitations on our ability to move
money freely around the world. We currently have no foreign currency
derivatives outstanding, and have no significant funds subject to foreign
exchange controls.

Customer Concentration

We have a
limited number of customers with individually large amounts due at any given
balance sheet date. Any unanticipated change in one of those customers credit
worthiness, or other matters affecting the collectability of amounts due from
such customers, could have a material affect on our results of operations in
the period in which such changes or events occur. At September 30, 2007,
approximately 8.0% of accounts receivable were due from one customer. For the
three months and nine months ended September 30, 2007, approximately 10.2% and
11.5% of revenues, respectively, was generated from one customer, Jones Apparel
Group, Inc.

55

---



ITEM 4. Controls and Procedures

The Companys
management is responsible for establishing and maintaining a system of
disclosure controls and procedures (as defined in Rule 13a-15 and 15d-15 under
the Securities Exchange Act of 1934 (the Exchange Act), designed to ensure
that information required to be disclosed by the Company in the reports that it
files or submits under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Securities and Exchange
Commissions rules and forms. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information
required to be disclosed by an issuer in the reports that it files or submits
under the Exchange Act is accumulated and communicated to the issuers
management, including its principal executive officer or officers and principal
financial officer or officers, or persons performing similar functions, as
appropriate to allow timely decisions regarding required disclosure.

In accordance
with Exchange Act Rules 13a-15 and 15d-15, the Company carried out an
evaluation, with the participation of the Chief Executive Officer and Chief
Financial Officer of the Company, of the effectiveness of the Companys
disclosure controls and procedures as of the end of the period covered by this
report. Based on that evaluation, the Companys Chief Executive Officer and
Chief Financial Officer concluded that the Companys disclosure controls and
procedures were effective, as of the end of the period covered by this report,
to ensure that information required to be disclosed in the Companys reports
filed or submitted under the Exchange Act is (i) accumulated and communicated
to management, including the Chief Executive Officer and Chief Financial
Officer as appropriate to allow timely decisions regarding required disclosure
and (ii) recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commissions rules and forms.

In designing
and evaluating the Companys disclosure controls and procedures (as defined in
Rules 13a-15(e) or 15d-15(e) of the Exchange Act), management recognized that
any controls and procedures, no matter how well designed and operated, can
provide only reasonable assurances of achieving the desired control objectives,
as ours are designed to do, and management necessarily was required to apply
its judgment in evaluating the cost-benefit relationship of possible controls
and procedures. We believe that our disclosure controls and procedures provide
such reasonable assurance.

No change occurred
in the Companys internal controls concerning financial reporting during the
third quarter of the fiscal year ending December 31, 2007 that has materially
affected, or is reasonably likely to materially affect, the Companys internal
controls over financial reporting.

Section 404 Compliance

Beginning with
this year ending December 31, 2007, Section 404 of the Sarbanes-Oxley Act of
2002 will require the Company to include managements report on our internal
control over financial reporting in its Annual Report on Form 10-K. The
internal control report must contain (1) a statement of managements
responsibility for establishing and maintaining adequate internal control over
our financial reporting, (2) a statement identifying the framework used by management
to conduct the required evaluation of the effectiveness of our internal control
over financial reporting and (3) managements assessment of the effectiveness
of our internal control over financial reporting as of the end of our most
recent fiscal year. In order to achieve compliance with Section 404 within the
prescribed period, management has commenced a Section 404 compliance project
under which management has adopted a detailed project work plan to assess the
adequacy of the Companys internal control over financial reporting, remediate
any control deficiencies that may be identified, validate through testing that
controls are functioning as documented and implement a continuous reporting and
improvement process for internal control over financial reporting. We expect to
incur substantial expense in connection with the Section 404 compliance
project.

Changes in Internal Control Over Financial
Reporting

As more fully
set forth in Item 9A, Controls and Procedures, of the 2006 Form 10-K/A, in
light of the transactions that closed in 2006, as described in the Companys
annual report, the Company plans to continue to review and make necessary
changes to the overall design of its internal control environment, including
the roles and responsibilities of each functional group within the organization
and reporting structure, as well as policies and procedures to improve the
overall effectiveness of internal control over financial reporting. In
particular, the Company has implemented during 2007 the specific measures
described in the Companys annual report to reduce the possibility that
possible material weaknesses result in the Companys failure to prevent or
detect misstatements in its financial statements in future financial periods.
During the most recent fiscal quarter there were no material changes in the
Companys system of internal controls over financial reporting.

56

---



PART II: OTHER
INFORMATION



Item 1. LEGAL PROCEEDINGS

The Company is
ordinarily involved in claims and lawsuits which arise in the normal course of
business, none of which currently, in managements opinion, will have a
significant effect on the Companys financial position or results of
operations.

Item 1A. RISK FACTORS

Financing risk

The following
represent changes in the Companys risk factors from those disclosed in the
report on Form 10-K/A filed on or about April 18, 2007.

We do not currently
have any availability under our $10 million revolving credit facility, which
could have a material adverse effect on us if we should need additional
external sources of liquidity

We failed at
December 31, 2006 to meet certain monthly financial covenants in our senior
secured credit facility. Our senior lenders agreed to waive these defaults in
exchange for modifying the terms of our revolving loan portion of our senior
credit facility so as to make advances under our $10 million facility subject
to the discretion of the lender. If we should require additional liquidity and
are unable to access our revolving credit facility (or we cannot secure
additional sources of liquidity), there would be a material adverse effect on
our business and financial condition, including a potential default under our
credit facility.

We
    have since failed repeatedly to meet certain of the financial covenants under
    our senior secured credit facility and the convertible notes. On November
    19, 2007, as described elsewhere herein, we obtained waivers of all existing
    defaults under our senior secured credit facility and secured convertible
    notes. As discussed elsewhere herein, we were also in default of our obligation
    to register certain securities related to the convertible notes and our common
    stock offering; while the default related to the convertible notes has also
    been waived, we continue to incur substantial cash penalties.

While
    we have secured a revision of our financial covenants on November 19, 2007,
    effective November 23, 2007, we may be unable to comply with our financial
    covenants in the future. If we are unable to comply in the future with the
    financial and other covenants contained in our credit documents, there will
    be an event of default, in which case, our lenders will have the right to
    accelerate our indebtedness and foreclose on our assets, in which case we
    would cease to be a going concern.

Country risk

The Company
may be exposed to a variety of risks as a result of its operation in Asia being
primarily in the PRC. These include risks associated with, among other things,
the political, economic and legal environment and foreign currency exchange.
The Companys results may be adversely affected by a change in the political or
social conditions in the PRC, and by changes in governmental policies with
respect to laws and regulations, anti-inflationary measures, currency
conversion and remittance abroad, and rates and methods of taxation, among
other things. The Companys management does not believe these risks to be
significant. There can be no assurance, however, that changes in political and
other conditions will not result in any adverse impact.

57

---



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

We issued a convertible note in the principal amount of $712,500
    and warrants to purchase 64,773 shares of common stock to an accredited investor
    in exchange for services rendered. The convertible note is convertible at
    the option of the holder into shares of our common stock at an initial conversion
    price equal to $5.50 per share (subject to adjustment), and the new warrants
    are exercisable until November 8, 2011 at an initial exercise price equal
    to $5.50 per share (subject to adjustment).
    The Company believes that the foregoing transaction was exempt from the registration
    requirements under Rule 506 of Regulation D promulgated under the Securities
    Act of 1933, as amended (the Act) or Section 4(2) under the
    Act, based on the following facts: there was no general solicitation, there
    was a single purchaser, which was an accredited investor (within the meaning of
	Regulation D under the Securities Act of 1933, as amended) and which was about business and financial
	matters, and all securities issued were subject to restriction on transfer, so as to take reasonable steps to assure that the purchaser
	was not an underwriter within the meaning of Section 2(11) under the Act.

Item 3. DEFAULTS UPON SENIOR SECURITIES

As
    described below, on November 19, 2007, we obtained waivers of all existing
    defaults under our senior secured credit facility and convertible notes (relating
    primarily to the attainment of specified EBITDA targets and maintenance of
    prescribed ratios of debt to trailing twelve month EBITDA (as defined)).
    We also obtained a waiver of our default with respect to our obligation to
    register certain shares of common stock issuable in connection with the note
    financing ; however, we continue to incur substantial cash penalties.

On
    November 19, 2007, we received from our senior secured lenders waivers of
    all existing defaults under our senior secured credit facility, in exchange
    for which, the Company, among other terms and conditions, agreed to (i) pay
    the senior lender a $250 cash amendment fee and (ii) an increase in the interest
    rates on certain types of loans. The senior secured lender also agreed to
    reset the financial covenants relating to EBITDA and the Fixed Charge Coverage
    Ratio (in each case, as defined).

Additionally,
    on November 19, 2007, we received from our senior secured note holders waivers
    of all existing defaults under our senior secured convertible notes, in exchange
    for which, the Company, among other terms and conditions, agreed to the following:
    to pay the note holders $250 in the form of additional notes; to use its
    best efforts, subject to certain conditions, to cause two persons nominated
    by a certain note holder to be appointed to its board of directors; and,
    effective November 23, 2007, to increase the interest rate on the notes,
    by 150 basis points, and reduce the conversion price of the notes and exercise
    price of the warrants associated with the notes from $5.50 per share to $3.00
    per share. The senior secured note holders also agreed to reset the financial
    covenants relating to EBITDA and the Fixed Charge Coverage Ratio (in each
    case, as defined).

We are working constructively with our Senior Secured lender
    and our Convertible Note holders with respect to various strategic alternatives.
    In that regard, the Company has engaged Gordian Group, LLC, an investment
    bank, to advise it on such matters. The Company seeks to maximize the value
    of the Company and is contemplating, among other possible initiatives, a
    recapitalization, a restructuring, an alliance with strategic partners, and
    a sale to or merger with a third party, any of which, if pursued, could be
implemented outside or inside Chapter 11 of the Bankruptcy Code, as appropriate.

58

---



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

N/A

Item 5. OTHER INFORMATION

We failed at December
    31, 2006 to meet certain monthly financial covenants in our senior secured
    credit facility. Our senior lenders previously agreed to waive these defaults
    in exchange for modifying the terms of our revolving loan portion of our
    senior credit facility so as to make advances under our $10 million facility
    subject to the discretion of the lender.

We have since failed
    repeatedly to meet certain of the financial and other covenants under our
    senior secured credit facility and our senior secured convertible notes.

On November 19,
    2007, as described elsewhere herein, we obtained waivers of all existing
    defaults under our senior secured credit facility and senior secured convertible
    notes. As discussed elsewhere herein, we were also in default of our obligation
    to register certain securities related to the convertible notes and our common
    stock offering; while the default related to the convertible notes has also
    been waived, we continue to incur substantial cash penalties.

On November 19,
    2007, we entered into an amendment with our senior secured lenders of the
    loan agreement with respect to our senior secured credit facility. In connection
    with this amendment, we received waivers of all existing defaults under our
    senior secured credit facility, in exchange for which, among other terms
    and conditions, we agreed to (i) pay the senior lender a $250 cash amendment
    fee and (ii) an increase in the interest rates on certain types of loans.
    The senior secured lender also agreed to reset the financial covenants relating
    to EBITDA and the Fixed Charge Coverage Ratio (in each case, as defined).

On
    November 19, 2007, we entered into an amendment with our senior secured convertible
    note holders with respect to our senior secured convertible notes. In connection
    with this amendment, we received waivers of all existing defaults under our
    senior secured convertible notes, in exchange for which, among other terms
    and conditions, we agreed to the following: to pay the note holders $250
    in the form of additional notes; to use our best efforts, subject to certain
    conditions, to cause two persons nominated by a certain note holder to be
    appointed to our board of directors; and, effective November 23, 2007, to
    increase the interest rate on the notes, by 150 basis points, and reduce
    the conversion price of the notes and exercise price of the warrants associated
    with the notes from $5.50 per share to $3.00 per share. The senior secured
    note holders also agreed to reset the financial covenants relating to EBITDA
    and the Fixed Charge Coverage Ratio (in each case, as defined).

Item 6. EXHIBITS

|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 
|----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|2.1         |  | Agreement
 and Plan of Merger, dated as of November 8, 2006, by and among Aerobic
 Creations, Inc., Aerobic Merger Sub Inc., and Maritime Logistics US Holdings
 Inc. (1)                                                                                                                                                                                                                                                                         
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|3.1         |  | First
 Amended and Restated Certificate of Incorporation of Aerobic Creations, Inc. (6)                                                                                                                                                                                                                                                                                                                                                           
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|3.2         |  | Certificate
 of Merger of Aerobic Merger Sub Inc. with and into Maritime Logistics US
 Holdings Inc. (1)                                                                                                                                                                                                                                                                                                                                          
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|3.3         |  | Amended and
 Restated Bylaws of Aerobic Creations, Inc. (to be known as Summit Global
 Logistics, Inc.) (1)                                                                                                                                                                                                                                                                                                                                       
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.1         |  | Form of
 Warrant issued under Convertible Notes Securities Purchase Agreement. (1)                                                                                                                                                                                                                                                                                                                                                                
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.2         |  | Form of Note
 issued under Convertible Notes Securities Purchase Agreement. (1)                                                                                                                                                                                                                                                                                                                                                                   
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.3         |  | Form of
 Warrant issued under common stock Securities Purchase Agreement. (1)                                                                                                                                                                                                                                                                                                                                                                     
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.4         |  | Registration
 Rights Agreement under the Securities Purchase Agreement (Notes and
 Warrants), dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                                                   
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.5         |  | Registration
 Rights Agreement under the Securities Purchase Agreement (common stock and
 Warrants), dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                                            
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.6         |  | Lockup
 Agreement by and between Protex Holding Limited and Summit Global Logistics,
 Inc., dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                                                     
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.7         |  | Lockup
 Agreement by and between Robert Lee and Summit Global Logistics, Inc., dated
 as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                                                                 
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.8         |  | Lockup
 Agreement by and between Robert Wu and Summit Global Logistics, Inc., dated
 as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                                                                  
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.9         |  | Lockup
 Agreement by and between the management of Maritime Logistics US Holdings
 Inc. and Summit Global Logistics, Inc., dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                      
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.10        |  | Lockup
 Agreement by and between the management of FMI Holdco I, LLC and Summit
 Global Logistics, Inc., dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                                        
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.11        |  | Lockup
 Agreement by and between Di Wang, Dong Wong, and Han Huy Ling and Summit
 Global Logistics, Inc., dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                                       
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.12        |  | Voting
 Agreement dated as of November 8, 2006 by and between Maritime Logistics US
 Holdings Inc. and the holders of the common stock of Maritime Logistics US
 Holdings Inc., certain members and employees of the parent companies of FMI
 Holdco I, LLC, the principal holders of the common stock of the TUG group of
 logistic companies, and the holder of the issued shares in the capital of Sea
 Master Logistics (Holding) Limited. (1)
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.13        |  | Waiver and
 Amendment No. 1 to Warrant issued under Convertible Notes Securities Purchase
 Agreement. (7)                                                                                                                                                                                                                                                                                                                                         
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.14        |  | Waiver and
 Amendment No. 1 to Warrant issued under common stock Securities Purchase
 Agreement. (7)                                                                                                                                                                                                                                                                                                                                              
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.15        |  | Form of
 Warrant under Convertible Notes Securities Purchase Agreement. (7)                                                                                                                                                                                                                                                                                                                                                                       
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.16        |  | Form of
 Amended and Restated Senior Secured Convertible Note. (7)                                                                                                                                                                                                                                                                                                                                                                                
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.17        |  | Form of
 Senior Secured Convertible Note. (7)                                                                                                                                                                                                                                                                                                                                                                                                     
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.18        |  | Form of
 Unsecured Convertible Note. (7)                                                                                                                                                                                                                                                                                                                                                                                                          
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.19        |  | Waiver and
 Amendment No. 1 to Registration Rights Agreement under the Securities
 Purchase Agreement (Notes and Warrants). (7)                                                                                                                                                                                                                                                                                                                   



59

---



|      |  |                                                                                                                                                                                                                                                                                                                               
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.20  |  | Waiver and
 Amendment No. 1 to Registration Rights Agreement (common stock and Warrants),
 dated as of November 8, 2006. (7)                                                                                                                                                                                                  
|      |  |                                                                                                                                                                                                                                                                                                                               
|4.21  |  | Waiver and Amendment to Senior Secured Convertible Notes. (8)                                                                                                                                                                                                                                                                 
|      |  |                                                                                                                                                                                                                                                                                                                               
|10.1  |  | Security
 Agreement (Second Lien), dated as of November 8, 2006 made by the guarantors
 listed therein and Law Debenture Trust Company of New York. (1)                                                                                                                                                                       
|      |  |                                                                                                                                                                                                                                                                                                                               
|10.2  |  | Pledge and
 Security Agreement, dated as of November 8, 2006 made by the pledgors listed
 therein and Law Debenture Trust Company of New York. (1)                                                                                                                                                                            
|      |  |                                                                                                                                                                                                                                                                                                                               
|10.3  |  | Guaranty,
 dated as of November 8, 2006 made by the guarantors listed therein and Law
 Debenture Trust Company of New York. (1)                                                                                                                                                                                               
|      |  |                                                                                                                                                                                                                                                                                                                               
|10.4  |  | Intercreditor
 and Subordination Agreement, under Notes Purchase Agreement, dated as of
 November 8, 2006 by and between Fortress Credit Corp. and the parties listed
 therein. (1)                                                                                                                                           
|      |  |                                                                                                                                                                                                                                                                                                                               
|10.5  |  | Securities
 Purchase Agreement (common stock and Warrants), dated as of October 31, 2006,
 among Maritime Logistics US Holdings Inc., Aerobic Creations, Inc. and the
 purchasers listed therein. (1)                                                                                                                         
|      |  |                                                                                                                                                                                                                                                                                                                               
|10.6  |  | Securities
 Purchase Agreement (Notes and Warrants), dated as of November 8, 2006, among
 Maritime Logistics US Holdings Inc., Aerobic Creations, Inc. and the
 purchasers listed therein; First Amendment to Securities Purchase Agreement
 (Notes and Warrants), dated as of January 5, 2007. (3)                           
|      |  |                                                                                                                                                                                                                                                                                                                               
|10.7  |  | Joinder
 Agreement to common stock Securities Purchase Agreement, dated as of November
 8, 2006 by and among Maritime Logistics US Holdings Inc. and the investors
 identified therein. (1)                                                                                                                                   
|      |  |                                                                                                                                                                                                                                                                                                                               
|10.8  |  | Joinder
 Agreement to Convertible Notes Securities Purchase Agreement, dated as of
 November 8, 2006 by and among Maritime Logistics US Holdings Inc. and the
 investors identified therein. (1)                                                                                                                              
|      |  |                                                                                                                                                                                                                                                                                                                               
|10.9  |  | Loan
 Agreement, dated as of November 8, 2006 by and among Maritime Logistics US
 Holdings Inc. and its subsidiaries as borrowers, the guarantors identified
 therein, Fortress Credit Corp. as agent, and certain other lenders as set
 forth therein. (1)                                                                   
|      |  |                                                                                                                                                                                                                                                                                                                               
|10.10 |  | Security
 Agreement under Loan Agreement, dated November 8, 2006 made by the borrowers
 and guarantors identified therein in favor of Fortress Credit Corp. (1)                                                                                                                                                               
|      |  |                                                                                                                                                                                                                                                                                                                               
|10.11 |  | Pledge and
 Security Agreement, dated November 8, 2006 made by the pledgors identified
 therein in favor of Fortress Credit Corp. (1)                                                                                                                                                                                         
|      |  |                                                                                                                                                                                                                                                                                                                               
|10.12 |  | Leasehold
 Mortgage, Assignment of Rents and Security Agreement, dated November 8, 2006
 by FMI International LLC to Fortress Credit Corp. (800 Federal Blvd,
 Carteret, NJ). (1)                                                                                                                                             
|      |  |                                                                                                                                                                                                                                                                                                                               
|10.13 |  | Leasehold
 Mortgage, Assignment of Rents and Security Agreement, dated November 8, 2006
 by FMI International LLC and First American Title Insurance for the benefit
 of Fortress Credit Corp. (3355 Dulles Dr., Mira Loma, CA). (1)                                                                                          
|      |  |                                                                                                                                                                                                                                                                                                                               
|10.14 |  | Sale and
 Purchase Agreement by and among Maritime Logistics US Holdings Inc. and
 Protex Holdings Limited and Sea Master Logistics (Holding) Limited, dated as
 of September 28, 2006. (1)(4)                                                                                                                                
|      |  |                                                                                                                                                                                                                                                                                                                               
|10.15 |  | Asset/Stock
 Purchase Agreement by and among Dolphin US Logistics, Inc. and TUG Logistics,
 Inc., Glare Logistics Inc., and TUG Logistics (Miami), Inc. and Clare
 Freight, Los Angeles, Inc., and TUG New York, Inc. and Robert Lee, and Robert
 Wu and Wang Dong, Di Wang and Han Huy Ling, dated as of October 2, 2006. (1)
|      |  |                                                                                                                                                                                                                                                                                                                               
|10.16 |  | Equity
 Purchase Agreement between the parties set forth therein and Maritime
 Logistics US Holdings Inc., dated October 23, 2006. (1)                                                                                                                                                                                        
|      |  |                                                                                                                                                                                                                                                                                                                               
|10.17 |  | TUG Miami
 and Los Angeles Bonus Agreement by and among TUG USA, Inc. and the employees
 set forth therein, dated as of October 2, 2006. (5)                                                                                                                                                                                  
|      |  |                                                                                                                                                                                                                                                                                                                               
|10.18 |  | TUG New York
 Bonus Agreement by and among TUG USA, Inc. and the New York employees set
 forth therein, dated as of October 2, 2006. (5)                                                                                                                                                                                      
|      |  |                                                                                                                                                                                                                                                                                                                               
|10.19 |  | TUG China
 Bonus Agreement by and between Sea Master Logistics (Holding) Limited and
 Robert Lee and Robert Wu, dated October 2, 2006. (5)                                                                                                                                                                                    



60

---



|      |  |                                                                                                                                                                                                                                                                                                                                               
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.20 |  | Assignment
 and Assumption Agreement by and among each of TUG Logistics, Inc., Glare
 Logistics, Inc., and TUG Logistics (Miami), Inc. and TUG USA, Inc., dated as
 of October 2 2006. (1)                                                                                                                                                    
|      |  |                                                                                                                                                                                                                                                                                                                                               
|10.21 |  | Agency
 Agreement, dated as of September 22, 2006, between Sea Master Logistics
 (Holding) Limited and Sea Master Logistics (China) Limited. (1)                                                                                                                                                                                              
|      |  |                                                                                                                                                                                                                                                                                                                                               
|10.22 |  | Transportation
 Service Agreement by and between FMI Express Corp., FMI Trucking, Inc. and
 Jones Apparel Group USA, Inc., dated as of August 1, 2001; and Modification
 Agreement related thereto. (1)(4)                                                                                                                                    
|      |  |                                                                                                                                                                                                                                                                                                                                               
|10.23 |  | Summit
 Global Logistics, Inc. 2006 Equity Incentive Plan. (1)                                                                                                                                                                                                                                                                                
|      |  |                                                                                                                                                                                                                                                                                                                                               
|10.24 |  | Summit
 Global Logistics, Inc. 2007 Management Incentive Plan. (1)                                                                                                                                                                                                                                                                            
|      |  |                                                                                                                                                                                                                                                                                                                                               
|10.25 |  | Summit
 Global Logistics, Inc. Severance Benefit Plan. (1)                                                                                                                                                                                                                                                                                    
|      |  |                                                                                                                                                                                                                                                                                                                                               
|10.26 |  | Summit
 Global Logistics, Inc. 2007 Supplemental Executive Retirement Plan. (1)                                                                                                                                                                                                                                                               
|      |  |                                                                                                                                                                                                                                                                                                                                               
|10.27 |  | Employment
 Agreement of Robert Agresti, dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                    
|      |  |                                                                                                                                                                                                                                                                                                                                               
|10.28 |  | Employment
 Agreement of Paul Shahbazian, dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                   
|      |  |                                                                                                                                                                                                                                                                                                                                               
|10.29 |  | Employment
 Agreement of Christopher Dombalis, dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                              
|      |  |                                                                                                                                                                                                                                                                                                                                               
|10.30 |  | Employment
 Agreement of William Knight, dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                    
|      |  |                                                                                                                                                                                                                                                                                                                                               
|10.31 |  | Employment
 Agreement of Robert ONeill, dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                    
|      |  |                                                                                                                                                                                                                                                                                                                                               
|10.32 |  | Form of
 Indemnification and Founders Agreement, entered into by the following
 individuals: Robert Agresti, Paul Shahbazian, Peter Klaver, William Knight,
 Christopher Dombalis, James Madden, and Peter Stone, dated November 8, 2006. (1)                                                                                                
|      |  |                                                                                                                                                                                                                                                                                                                                               
|10.33 |  | Indemnification
 and Founders Agreement for Raymer McQuiston, dated November 8, 2006. (1)                                                                                                                                                                                                                                                    
|      |  |                                                                                                                                                                                                                                                                                                                                               
|10.34 |  | Lease
 Agreement by and between SDI Technologies, Inc. and FMI International Corp.,
 dated August 14, 1996; Lease Extension Agreement dated March 7, 2002.
 Assignment and Assumption of Lease Amendment to Lease and Short Form of
 Lease, each dated September 23, 2004 by and between SDI Technologies, Inc.
 and 800 Federal Blvd LLC. (1)
|      |  |                                                                                                                                                                                                                                                                                                                                               
|10.35 |  | Land and
 Building Lease Agreement by and between Thrifty Oil Co. and FMI International
 LLC, dated as of July20, 2004; Sublease Agreements related thereto. (1)                                                                                                                                                                              
|      |  |                                                                                                                                                                                                                                                                                                                                               
|10.36 |  | Industrial
 Complex Lease by and between Port LA Distribution Center II, L.P. and FMI
 International (West) LLC, dated as of December 30, 2002; Amendments and
 Agreements related thereto. (1)                                                                                                                                               
|      |  |                                                                                                                                                                                                                                                                                                                                               
|10.37 |  | Industrial
 Complex Lease by and between Port LA Distribution Center II, L.P. and FMI
 International LLC, dated as of July 28, 2003.
 (1)                                                                                                                                                                                                     
|      |  |                                                                                                                                                                                                                                                                                                                                               
|10.38 |  | Lease
 Agreement by and between AAAA World Import  Export, Inc. and FMI
 International Corp., dated as of November 2001. (1)                                                                                                                                                                                                                 
|      |  |                                                                                                                                                                                                                                                                                                                                               
|10.39 |  | Lease
 Agreement by and between M. Parisi & Son Construction Co., Inc, and
 Fashion Marketing, Inc., dated as of April 28, 2000. (1)                                                                                                                                                                                                          
|      |  |                                                                                                                                                                                                                                                                                                                                               
|10.40 |  | AMB Property Corporation Industrial Lease dated December 6, 1999;
 Amendments and Guarantee related thereto. (1)                                                                                                                                                                                                                              
|      |  |                                                                                                                                                                                                                                                                                                                                               
|10.41 |  | Lease
 Agreement by and between Flagler Development Corp. and FMI International LLC
 dated as of September19, 2006, effective January 15, 2007. (1)                                                                                                                                                                                           
|      |  |                                                                                                                                                                                                                                                                                                                                               
|10.42 |  | Original
 Lease by and between Center Realty L.P. and DSL Atlantic, dated March 1993;
 Agreements related thereto. (1)                                                                                                                                                                                                                        
|      |  |                                                                                                                                                                                                                                                                                                                                               
|10.43 |  | Real
 Property Lease by and between Keegan Center LLC and Glare Logistics, Inc.,
 dated September 15, 2003;                                                                                                                                                                                                                                   
|      |  | Agreements related thereto. (1)                                                                                                                                                                                                                                                                                                               



61

---



|      |  |                                                                                                                                                                                                                                              
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |  |                                                                                                                                                                                                                                              
|      |  |                                                                                                                                                                                                                                              
|10.44 |  | Forbearance
 Agreement dated as of April 16, 2007 by and among Fortress Credit Corp.,
 Summit Global Logistics, Inc. and certain of its subsidiaries. (2)                                                                                    
|      |  |                                                                                                                                                                                                                                              
|10.45 |  | First
 Amendment to Security Agreement (Second Lien) made by the guarantors listed
 therein and Law Debenture Trust Company of New York. (7)                                                                                                 
|      |  |                                                                                                                                                                                                                                              
|10.46 |  | First
 Amendment Pledge and Security Agreement made by the pledgors listed therein
 and Law Debenture Trust Company of New York. (7)                                                                                                         
|      |  |                                                                                                                                                                                                                                              
|10.47 |  | First
 Amendment to Guaranty made by the guarantors listed therein and Law Debenture
 Trust Company of New York. (7)                                                                                                                         
|      |  |                                                                                                                                                                                                                                              
|10.48 |  | Amendment
 No. 1 to Intercreditor and Subordination Agreement, under Notes Purchase
 Agreement, by and between Fortress Credit Corp. and the parties listed
 therein. (7)                                                                    
|      |  |                                                                                                                                                                                                                                              
|10.49 |  | Intercreditor
 and Subordination Agreement (7)                                                                                                                                                                                               
|      |  |                                                                                                                                                                                                                                              
|10.50 |  | Second
 Amendment to Securities Purchase Agreement (Notes and Warrants) and First
 Amendment to Joinder Agreement (7)                                                                                                                        
|      |  |                                                                                                                                                                                                                                              
|10.51 |  | Amendment
 No. 1 Loan Agreement, by and among Maritime Logistics US Holdings Inc. and
 its subsidiaries as borrowers, the guarantors identified therein, Fortress
 Credit Corp. as agent, and certain other lenders as set forth therein. (7)
|      |  |                                                                                                                                                                                                                                              
|10.52 |  | Amendment No. 5 Loan Agreement, by and among Maritime Logistics US Holdings Inc. and its subsidiaries as borrowers, the guarantors identified herein, Fortress Credit Corp. as agent, and certain other lenders as set forth therein(8)      
|      |  |                                                                                                                                                                                                                                              
|21.1  |  | List of
 subsidiaries of Summit Global Logistics, Inc. (2)                                                                                                                                                                                   
|      |  |                                                                                                                                                                                                                                              
|31.1  |  | Certification
 pursuant to 17 C.F.R § 240.15d14 (a), as adopted pursuant to Section 302 of
 the SarbanesOxley Act of 2002 for Robert Agresti (8)                                                                                           
|      |  |                                                                                                                                                                                                                                              
|31.2  |  | Certification
 pursuant to 17 C.F.R § 240.15d14 (a), as adopted pursuant to Section 302 of
 the SarbanesOxley Act of 2002 for Paul Shahbazian (8)                                                                                          
|      |  |                                                                                                                                                                                                                                              
|32.1  |  | Certifications
 pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the
 SarbanesOxley Act of 2002 for Robert Agresti and Paul Shahbazian (8)                                                                               

(1)
Incorporated by reference to the Companys Current Report on Form 8-K, filed
with the Securities and Exchange Commission on November 13, 2006 (File No.
000-51091).

(2)
Incorporated by reference to the Companys Annual Report on Form 10K/A, filed
with the Securities and Exchange Commission on April 18, 2007 (File No.
000-51091).

(3) The
agreement filed to the Companys Registration Statement on Form S-1, filed with
the Securities and Exchange Commission on January 12, 2007 (File No.
333-139980) supersedes the agreement filed as Exhibit 10.6 to the Companys
Report on Form 8-K, filed with the Securities and Exchange Commission on
November 13, 2006 (File No. 000-51091).

(4)
Confidential treatment has been requested for the redacted portions of this
agreement. A complete copy of this agreement, including the redacted portions,
has been filed separately with the Securities and Exchange Commission.

(5)
Incorporated by reference to the Companys Registration Statement on Form S-1,
filed with the Securities and Exchange Commission on January 12, 2007 (File No.
333-139980).

(6)
Incorporated by reference to the Companys Report on Form 8-K, filed with the
Securities and Exchange Commission on February 26, 2007 (File No. 000-51091).

(7)
Incorporated by reference to the same exhibit number filed with the Companys
current report on Form 8-K filed May 25, 2007.

(8) Filed
herewith.

62

---



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.

|                         |                                |                                       
|------------------------ | ------------------------------ | --------------------------------------
|                         | SUMMIT
 GLOBAL LOGISTICS, INC.
|                         |                                |                                       
|Date:
 November 20, 2007 | By:                            | /s/ Robert
 Agresti                   
|                         |                                |                                       
|                         |                                | Robert
 Agresti                       
|                         |                                | President
 and Chief Executive Officer
|                         |                                |                                       
|Date:
 November 20, 2007 | By:                            | /s/ Paul
 Shahbazian                  
|                         |                                |                                       
|                         |                                | Paul
 Shahbazian                      
|                         |                                | Chief Financial
 Officer              

63

---



INDEX TO EXHIBITS

|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit
  No. |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                             
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|2.1           |  | Agreement and Plan of
  Merger, dated as of November 8, 2006, by and among Aerobic Creations, Inc.,
  Aerobic Merger Sub Inc., and Maritime Logistics US Holdings Inc. (1)                                                                                                                                                                                                                                                                              
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|3.1           |  | First Amended and Restated
  Certificate of Incorporation of Aerobic Creations, Inc. (6)                                                                                                                                                                                                                                                                                                                                                                
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|3.2           |  | Certificate of Merger of
  Aerobic Merger Sub Inc. with and into Maritime Logistics US Holdings Inc. (1)                                                                                                                                                                                                                                                                                                                                                
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|3.3           |  | Amended and Restated
  Bylaws of Aerobic Creations, Inc. (to be known as Summit Global Logistics,
  Inc.) (1)                                                                                                                                                                                                                                                                                                                                           
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4.1           |  | Form of Warrant issued
  under Convertible Notes Securities Purchase Agreement. (1)                                                                                                                                                                                                                                                                                                                                                                     
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4.2           |  | Form of Note issued under
  Convertible Notes Securities Purchase Agreement. (1)                                                                                                                                                                                                                                                                                                                                                                        
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4.3           |  | Form of Warrant issued
  under common stock Securities Purchase Agreement. (1)                                                                                                                                                                                                                                                                                                                                                                          
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4.4           |  | Registration Rights
  Agreement under the Securities Purchase Agreement (Notes and Warrants), dated
  as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                                                       
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4.5           |  | Registration Rights
  Agreement under the Securities Purchase Agreement (common stock and
  Warrants), dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                                                
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4.6           |  | Lockup Agreement by and
  between Protex Holding Limited and Summit Global Logistics, Inc., dated as of
  November 8, 2006. (1)                                                                                                                                                                                                                                                                                                                         
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4.7           |  | Lockup Agreement by and
  between Robert Lee and Summit Global Logistics, Inc., dated as of November 8,
  2006. (1)                                                                                                                                                                                                                                                                                                                                     
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4.8           |  | Lockup Agreement by and
  between Robert Wu and Summit Global Logistics, Inc., dated as of November 8,
  2006. (1)                                                                                                                                                                                                                                                                                                                                      
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4.9           |  | Lockup Agreement by and
  between the management of Maritime Logistics US Holdings Inc. and Summit
  Global Logistics, Inc., dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                          
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4.10          |  | Lockup Agreement by and
  between the management of FMI Holdco I, LLC and Summit Global Logistics,
  Inc., dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                                            
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4.11          |  | Lockup Agreement by and
  between Di Wang, Dong Wong, and Han Huy Ling and Summit Global Logistics,
  Inc., dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                                           
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4.12          |  | Voting Agreement dated as
  of November 8, 2006 by and between Maritime Logistics US Holdings Inc. and
  the holders of the common stock of Maritime Logistics US Holdings Inc.,
  certain members and employees of the parent companies of FMI Holdco I, LLC,
  the principal holders of the common stock of the TUG group of logistic
  companies, and the holder of the issued shares in the capital of Sea Master
  Logistics (Holding) Limited. (1)
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4.13          |  | Waiver and Amendment No. 1
  to Warrant issued under Convertible Notes Securities Purchase Agreement. (7)                                                                                                                                                                                                                                                                                                                                               
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4.14          |  | Waiver and Amendment No. 1
  to Warrant issued under common stock Securities Purchase Agreement. (7)                                                                                                                                                                                                                                                                                                                                                    
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4.15          |  | Form of Warrant under
  Convertible Notes Securities Purchase Agreement. (7)                                                                                                                                                                                                                                                                                                                                                                            
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4.16          |  | Form of Amended and
  Restated Senior Secured Convertible Note. (7)                                                                                                                                                                                                                                                                                                                                                                                     
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4.17          |  | Form of Senior Secured
  Convertible Note. (7)                                                                                                                                                                                                                                                                                                                                                                                                          
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4.18          |  | Form of Unsecured
  Convertible Note. (7)                                                                                                                                                                                                                                                                                                                                                                                                               
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4.19          |  | Waiver and Amendment No. 1
  to Registration Rights Agreement under the Securities Purchase Agreement
  (Notes and Warrants). (7)                                                                                                                                                                                                                                                                                                                       
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4.20          |  | Waiver and Amendment No. 1
  to Registration Rights Agreement (common stock and Warrants), dated as of
  November 8, 2006. (7)                                                                                                                                                                                                                                                                                                                          
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4.21          |  | Waiver and Amendment to Senior Secured Convertible
      Notes. (8)                                                                                                                                                                                                                                                                                                                                                                                     
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10.1          |  | Security Agreement (Second
  Lien), dated as of November 8, 2006 made by the guarantors listed therein and
  Law Debenture Trust Company of New York. (1)                                                                                                                                                                                                                                                                                               



---



|     |  |                                                                                                                                                                                     
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.2 |  | Pledge and Security
  Agreement, dated as of November 8, 2006 made by the pledgors listed therein
  and Law Debenture Trust Company of New York. (1)                                
|     |  |                                                                                                                                                                                     
|10.3 |  | Guaranty, dated as of
  November 8, 2006 made by the guarantors listed therein and Law Debenture
  Trust Company of New York. (1)                                                   
|     |  |                                                                                                                                                                                     
|10.4 |  | Intercreditor and
  Subordination Agreement, under Notes Purchase Agreement, dated as of November
  8, 2006 by and between Fortress Credit Corp. and the parties listed therein. (1)

|      |  |                                                                                                                                                                                                                                                                                                                                   
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.5  |  | Securities Purchase
  Agreement (common stock and Warrants), dated as of October 31, 2006, among
  Maritime Logistics US Holdings Inc., Aerobic Creations, Inc. and the
  purchasers listed therein. (1)                                                                                                                          
|      |  |                                                                                                                                                                                                                                                                                                                                   
|10.6  |  | Securities Purchase
  Agreement (Notes and Warrants), dated as of November 8, 2006, among Maritime
  Logistics US Holdings Inc., Aerobic Creations, Inc. and the purchasers listed
  therein; First Amendment to Securities Purchase Agreement (Notes and
  Warrants), dated as of January 5, 2007. (3)                           
|      |  |                                                                                                                                                                                                                                                                                                                                   
|10.7  |  | Joinder Agreement to
  common stock Securities Purchase Agreement, dated as of November 8, 2006 by
  and among Maritime Logistics US Holdings Inc. and the investors identified
  therein. (1)                                                                                                                                    
|      |  |                                                                                                                                                                                                                                                                                                                                   
|10.8  |  | Joinder Agreement to
  Convertible Notes Securities Purchase Agreement, dated as of November 8, 2006
  by and among Maritime Logistics US Holdings Inc. and the investors identified
  therein. (1)                                                                                                                               
|      |  |                                                                                                                                                                                                                                                                                                                                   
|10.9  |  | Loan Agreement, dated as
  of November 8, 2006 by and among Maritime Logistics US Holdings Inc. and its
  subsidiaries as borrowers, the guarantors identified therein, Fortress Credit
  Corp. as agent, and certain other lenders as set forth therein. (1)                                                                     
|      |  |                                                                                                                                                                                                                                                                                                                                   
|10.10 |  | Security Agreement under
  Loan Agreement, dated November 8, 2006 made by the borrowers and guarantors
  identified therein in favor of Fortress Credit Corp. (1)                                                                                                                                                                 
|      |  |                                                                                                                                                                                                                                                                                                                                   
|10.11 |  | Pledge and Security
  Agreement, dated November 8, 2006 made by the pledgors identified therein in
  favor of Fortress Credit Corp. (1)                                                                                                                                                                                           
|      |  |                                                                                                                                                                                                                                                                                                                                   
|10.12 |  | Leasehold Mortgage,
  Assignment of Rents and Security Agreement, dated November 8, 2006 by FMI
  International LLC to Fortress Credit Corp. (800 Federal Blvd, Carteret, NJ). (1)                                                                                                                                                
|      |  |                                                                                                                                                                                                                                                                                                                                   
|10.13 |  | Leasehold Mortgage,
  Assignment of Rents and Security Agreement, dated November 8, 2006 by FMI
  International LLC and First American Title Insurance for the benefit of
  Fortress Credit Corp. (3355 Dulles Dr., Mira Loma, CA). (1)                                                                                           
|      |  |                                                                                                                                                                                                                                                                                                                                   
|10.14 |  | Sale and Purchase
  Agreement by and among Maritime Logistics US Holdings Inc. and Protex
  Holdings Limited and Sea Master Logistics (Holding) Limited, dated as of
  September 28, 2006. (1)(4)                                                                                                                                 
|      |  |                                                                                                                                                                                                                                                                                                                                   
|10.15 |  | Asset/Stock Purchase
  Agreement by and among Dolphin US Logistics, Inc. and TUG Logistics, Inc.,
  Glare Logistics Inc., and TUG Logistics (Miami), Inc. and Clare Freight, Los
  Angeles, Inc., and TUG New York, Inc. and Robert Lee, and Robert Wu and Wang
  Dong, Di Wang and Han Huy Ling, dated as of October 2, 2006. (1)
|      |  |                                                                                                                                                                                                                                                                                                                                   
|10.16 |  | Equity Purchase Agreement
  between the parties set forth therein and Maritime Logistics US Holdings
  Inc., dated October 23, 2006. (1)                                                                                                                                                                                          
|      |  |                                                                                                                                                                                                                                                                                                                                   
|10.17 |  | TUG Miami and Los Angeles
  Bonus Agreement by and among TUG USA, Inc. and the employees set forth
  therein, dated as of October 2, 2006. (5)                                                                                                                                                                                    
|      |  |                                                                                                                                                                                                                                                                                                                                   
|10.18 |  | TUG New York Bonus
  Agreement by and among TUG USA, Inc. and the New York employees set forth
  therein, dated as of October 2, 2006. (5)                                                                                                                                                                                        
|      |  |                                                                                                                                                                                                                                                                                                                                   
|10.19 |  | TUG China Bonus Agreement
  by and between Sea Master Logistics (Holding) Limited and Robert Lee and
  Robert Wu, dated October 2, 2006. (5)                                                                                                                                                                                      
|      |  |                                                                                                                                                                                                                                                                                                                                   
|10.20 |  | Assignment and Assumption
  Agreement by and among each of TUG Logistics, Inc., Glare Logistics, Inc.,
  and TUG Logistics (Miami), Inc. and TUG USA, Inc., dated as of October 2
  2006. (1)                                                                                                                                     
|      |  |                                                                                                                                                                                                                                                                                                                                   
|10.21 |  | Agency Agreement, dated as
  of September 22, 2006, between Sea Master Logistics (Holding) Limited and Sea
  Master Logistics (China) Limited. (1)                                                                                                                                                                                
|      |  |                                                                                                                                                                                                                                                                                                                                   
|10.22 |  | Transportation Service
  Agreement by and between FMI Express Corp., FMI Trucking, Inc. and Jones
  Apparel Group USA, Inc., dated as of August 1, 2001; and Modification
  Agreement related thereto. (1)(4)                                                                                                                     
|      |  |                                                                                                                                                                                                                                                                                                                                   
|10.23 |  | Summit Global Logistics,
  Inc. 2006 Equity Incentive Plan. (1)                                                                                                                                                                                                                                                                   



---



|      |  |                                                                                                                                                                                                                                                                                                                                                  
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.24 |  | Summit Global Logistics,
  Inc. 2007 Management Incentive Plan. (1)                                                                                                                                                                                                                                                                              
|      |  |                                                                                                                                                                                                                                                                                                                                                  
|10.25 |  | Summit Global Logistics,
  Inc. Severance Benefit Plan. (1)                                                                                                                                                                                                                                                                                      
|      |  |                                                                                                                                                                                                                                                                                                                                                  
|10.26 |  | Summit Global Logistics,
  Inc. 2007 Supplemental Executive Retirement Plan. (1)                                                                                                                                                                                                                                                                 
|      |  |                                                                                                                                                                                                                                                                                                                                                  
|10.27 |  | Employment Agreement of
  Robert Agresti, dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                      
|      |  |                                                                                                                                                                                                                                                                                                                                                  
|10.28 |  | Employment Agreement of
  Paul Shahbazian, dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                     
|      |  |                                                                                                                                                                                                                                                                                                                                                  
|10.29 |  | Employment Agreement of
  Christopher Dombalis, dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                
|      |  |                                                                                                                                                                                                                                                                                                                                                  
|10.30 |  | Employment Agreement of
  William Knight, dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                      
|      |  |                                                                                                                                                                                                                                                                                                                                                  
|10.31 |  | Employment Agreement of
  Robert ONeill, dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                      
|      |  |                                                                                                                                                                                                                                                                                                                                                  
|10.32 |  | Form of Indemnification
  and Founders Agreement, entered into by the following individuals: Robert
  Agresti, Paul Shahbazian, Peter Klaver, William Knight, Christopher Dombalis,
  James Madden, and Peter Stone, dated November 8, 2006. (1)                                                                                                
|      |  |                                                                                                                                                                                                                                                                                                                                                  
|10.33 |  | Indemnification and Founders
  Agreement for Raymer McQuiston, dated November 8, 2006. (1)                                                                                                                                                                                                                                                      
|      |  |                                                                                                                                                                                                                                                                                                                                                  
|10.34 |  | Lease Agreement by and
  between SDI Technologies, Inc. and FMI International Corp., dated August 14,
  1996; Lease Extension Agreement dated March 7, 2002. Assignment and Assumption
  of Lease Amendment to Lease and Short Form of Lease, each dated September 23,
  2004 by and between SDI Technologies, Inc. and 800 Federal Blvd LLC. (1)
|      |  |                                                                                                                                                                                                                                                                                                                                                  
|10.35 |  | Land and Building Lease
  Agreement by and between Thrifty Oil Co. and FMI International LLC, dated as
  of July20, 2004; Sublease Agreements related thereto. (1)                                                                                                                                                                               
|      |  |                                                                                                                                                                                                                                                                                                                                                  
|10.36 |  | Industrial Complex Lease
  by and between Port LA Distribution Center II, L.P. and FMI International
  (West) LLC, dated as of December 30, 2002; Amendments and Agreements related
  thereto. (1)                                                                                                                                               
|      |  |                                                                                                                                                                                                                                                                                                                                                  
|10.37 |  | Industrial Complex Lease
  by and between Port LA Distribution Center II, L.P. and FMI International
  LLC, dated as of July 28, 2003.
  (1)                                                                                                                                                                                                     
|      |  |                                                                                                                                                                                                                                                                                                                                                  
|10.38 |  | Lease Agreement by and
  between AAAA World Import  Export, Inc. and FMI International Corp., dated
  as of November 2001. (1)                                                                                                                                                                                                                  
|      |  |                                                                                                                                                                                                                                                                                                                                                  
|10.39 |  | Lease Agreement by and
  between M. Parisi & Son Construction Co., Inc, and Fashion Marketing,
  Inc., dated as of April 28, 2000. (1)                                                                                                                                                                                                           
|      |  |                                                                                                                                                                                                                                                                                                                                                  
|10.40 |  | AMB Property Corporation
  Industrial Lease dated December 6, 1999; Amendments and Guarantee related
  thereto. (1)                                                                                                                                                                                                                              
|      |  |                                                                                                                                                                                                                                                                                                                                                  
|10.41 |  | Lease Agreement by and
  between Flagler Development Corp. and FMI International LLC dated as of
  September19, 2006, effective January 15, 2007. (1)                                                                                                                                                                                            
|      |  |                                                                                                                                                                                                                                                                                                                                                  
|10.42 |  | Original Lease by and between
  Center Realty L.P. and DSL Atlantic, dated March 1993; Agreements related
  thereto. (1)                                                                                                                                                                                                                         
|      |  |                                                                                                                                                                                                                                                                                                                                                  
|10.43 |  | Real Property Lease by and
  between Keegan Center LLC and Glare Logistics, Inc., dated September 15,
  2003; Agreements related thereto. (1)                                                                                                                                                                                                    
|      |  |                                                                                                                                                                                                                                                                                                                                                  
|10.44 |  | Forbearance Agreement
  dated as of April 16, 2007 by and among Fortress Credit Corp., Summit Global
  Logistics, Inc. and certain of its subsidiaries. (2)                                                                                                                                                                                      
|      |  |                                                                                                                                                                                                                                                                                                                                                  
|10.45 |  | First Amendment to
  Security Agreement (Second Lien) made by the guarantors listed therein and
  Law Debenture Trust Company of New York. (7)                                                                                                                                                                                                   
|      |  |                                                                                                                                                                                                                                                                                                                                                  
|10.46 |  | First Amendment Pledge and
  Security Agreement made by the pledgors listed therein and Law Debenture
  Trust Company of New York. (7)                                                                                                                                                                                                           
|      |  |                                                                                                                                                                                                                                                                                                                                                  
|10.47 |  | First Amendment to
  Guaranty made by the guarantors listed therein and Law Debenture Trust
  Company of New York.(7)                                                                                                                                                                                                                            
|      |  |                                                                                                                                                                                                                                                                                                                                                  
|10.48 |  | Amendment No. 1 to
  Intercreditor and Subordination Agreement, under Notes Purchase Agreement, by
  and between Fortress Credit Corp. and the parties listed therein. (7)                                                                                                                                                                       
|      |  |                                                                                                                                                                                                                                                                                                                                                  
|10.49 |  | Intercreditor and
  Subordination Agreement (7)                                                                                                                                                                                                                                                                                                  





---



|      |  |                                                                                                                                                                                                                                                                
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.50 |  | Second Amendment to
  Securities Purchase Agreement (Notes and Warrants) and First Amendment to
  Joinder Agreement (7)                                                                                                                                        
|      |  |                                                                                                                                                                                                                                                                
|10.51 |  | Amendment No. 1 Loan
  Agreement, by and among Maritime Logistics US Holdings Inc. and its
  subsidiaries as borrowers, the guarantors identified therein, Fortress Credit
  Corp. as agent, and certain other lenders as set forth therein. (7)               
|      |  |                                                                                                                                                                                                                                                                
|10.52 |  | Amendment No. 5 Loan Agreement, by and among
        Maritime Logistics US Holdings Inc. and its subsidiaries as borrowers,
        the guarantors identified herein, Fortress Credit Corp. as agent, and
        certain other lenders as set forth therein(8)
|      |  |                                                                                                                                                                                                                                                                
|21.1  |  | List of subsidiaries of Summit Global
  Logistics, Inc. (2)                                                                                                                                                                                                    

|     |  |                                                                                                                                                                
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.1 |  | Certification pursuant to
  17 C.F.R § 240.15d14 (a), as adopted pursuant to Section 302 of the
  SarbanesOxley Act of 2002 for Robert Agresti (8)           
|     |  |                                                                                                                                                                
|31.2 |  | Certification pursuant to
  17 C.F.R § 240.15d14 (a), as adopted pursuant to Section 302 of the
  SarbanesOxley Act of 2002 for Paul Shahbazian (8)          
|     |  |                                                                                                                                                                
|32.1 |  | Certifications pursuant to
  18 U.S.C. § 1350, as adopted pursuant to Section 906 of the SarbanesOxley
  Act of2002 for Robert Agresti and Paul Shahbazian (8)

(1) Incorporated by
reference to the Companys Current Report on Form 8-K, filed with the
Securities and Exchange Commission on November 13, 2006 (File No. 000-51091).

(2) Incorporated by
reference to the Companys Annual Report on Form 10K/A, filed with the
Securities and Exchange Commission on April 18, 2007 (File No. 000-51091).

(3) The agreement filed to the Companys Registration Statement on
Form S-1, filed with the Securities and Exchange Commission on January 12, 2007
(File No. 333-139980) supersedes the agreement filed as Exhibit 10.6 to the Companys
Report on Form 8-K, filed with the Securities and Exchange Commission on
November 13, 2006 (File No. 000-51091).

(4) Confidential treatment
has been requested for the redacted portions of this agreement. A complete copy
of this agreement, including the redacted portions, has been filed separately
with the Securities and Exchange Commission.

(5) Incorporated by
reference to the Companys Registration Statement on Form S-1, filed with the
Securities and Exchange Commission on January 12, 2007 (File No. 333-139980).

(6) Incorporated by
reference to the Companys Report on Form 8-K, filed with the Securities and
Exchange Commission on February 26, 2007 (File No. 000-51091).

(7) Incorporated by reference
to the same exhibit number filed with the Companys current report on Form 8-K
filed May 25, 2007.

(8) Filed herewith.



---