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UNITED STATES
SECURITIES 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 March 31, 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: 333-62775

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
  incorporation or organization) |  | (I.R.S. Employer
  Identification Number)
|                                                                 |  |                                          
|547 Boulevard, Kenilworth, New Jersey                            |  | 07033                                    
|(Address of principal executive
  offices)                       |  | (Zip Code)                               

Registrants telephone number, including area
code: (908) 497-0280

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 May 18, 2007 was 7,594,958.

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SUMMIT GLOBAL LOGISTICS, INC.

FORM 10-Q

INDEX

|              |                                                                                                                                                                                                                                                                                                                                                 |         
|------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------
|              |                                                                                                                                                                                                                                                                                                                                                 | PAGE NO.
|              |                                                                                                                                                                                                                                                                                                                                                 |         
|PART
  I.  -  | FINANCIAL INFORMATION                                                                                                                                                                                                                                                                                                                           |         
|ITEM 1.       | Financial Statements                                                                                                                                                                                                                                                                                                                            |         
|              |                                                                                                                                                                                                                                                                                                                                                 |         
|              | SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES                                                                                                                                                                                                                                                                                                  |         
|              | Condensed Consolidated Balance Sheets as of March 31,
  2007 (Unaudited) and December 31, 2006                                                                                                                                                                                                                                                  | 1       
|              | Condensed Consolidated Statements of Operations for
  the three months ended March 31, 2007 (Unaudited) and for the period February
  6, 2006 (date of inception) to March 31, 2006                                                                                                                                                             | 3       
|              | Condensed Consolidated Statements of Cash Flows for
  the three months ended March 31, 2007 (Unaudited) and for the period February
  6, 2006 (date of inception) to March 31, 2006                                                                                                                                                             | 4       
|              | Notes to Condensed Consolidated Financial Statements
  (Unaudited)                                                                                                                                                                                                                                                                              | 6       
|              |                                                                                                                                                                                                                                                                                                                                                 |         
|              | Financial Statements  Predecessor Companies
(Our
  business combination on November 8, 2006, included FMI Holdco I LLC and
  Subsidiary and TUG Logistics, Inc. and Affiliates, which are deemed
  predecessor companies since they were both acquired with the same financing
  and both equally significant to our consolidated operations.) |         
|              |                                                                                                                                                                                                                                                                                                                                                 |         
|              | FMI HOLDCO I LLC AND SUBSIDIARY                                                                                                                                                                                                                                                                                                                 |         
|              | Condensed Consolidated Statement of Operations for
  the three months ended March 31, 2006 (Unaudited)                                                                                                                                                                                                                                          | 24      
|              | Condensed Consolidated Statement of Cash Flows for
  the three months ended March 31, 2006 (Unaudited)                                                                                                                                                                                                                                          | 25      
|              | Notes to Condensed Consolidated Statements of
  Operations and Cash Flows (Unaudited)                                                                                                                                                                                                                                                           | 26      
|              |                                                                                                                                                                                                                                                                                                                                                 |         
|              | TUG LOGISTICS, INC. AND AFFILIATES                                                                                                                                                                                                                                                                                                              |         
|              | Condensed Combined Statement of Operations for the
  three months ended March 31, 2006 (Unaudited)                                                                                                                                                                                                                                              | 29      
|              | Condensed Combined Statement of Cash Flows for the
  three months Ended March 31, 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                                                                                                                                                                                                                                                                                     | 48      
|ITEM 4.       | Controls and Procedures                                                                                                                                                                                                                                                                                                                         | 49      
|              |                                                                                                                                                                                                                                                                                                                                                 |         
|PART
  II  -  | OTHER INFORMATION                                                                                                                                                                                                                                                                                                                               | 50      
|ITEM 1.       | Legal proceedings                                                                                                                                                                                                                                                                                                                               | 50      
|ITEM 1A.      | Risk Factors                                                                                                                                                                                                                                                                                                                                    | 50      
|ITEM 2.       | Unregistered Sales of Equity Securities and Use of
  Proceeds                                                                                                                                                                                                                                                                                   | 50      
|ITEM 3.       | Defaults Upon Senior Securities                                                                                                                                                                                                                                                                                                                 | 50      
|ITEM 4.       | Submission of Matters to a Vote of Security
Holders                                                                                                                                                                                                                                                                                             | 50      
|ITEM 5.       | Other Information                                                                                                                                                                                                                                                                                                                               | 50      
|ITEM 6.       | Exhibits                                                                                                                                                                                                                                                                                                                                        | 50      
|Signatures    |                                                                                                                                                                                                                                                                                                                                                 | 51      
|Exhibit index | 52                                                                                                                                                                                                                                                                                                                                             

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PART I. FINANCIAL INFORMATION

**ITEM 1. FINANCIAL STATEMENTS**

SUMMIT
        GLOBAL LOGISTICS, INC. AND SUBSIDIARIES

CONDENSED
CONSOLIDATED BALANCE SHEETS

|                                                                                                                                                  |  |                                |             |                     |   |             | 
|------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------ | ----------- | ------------------- | - | ----------- | 
|                                                                                                                                                  |  | March 31,
  2007
  (UNAUDITED) |             | December 31,
  2006 |  
|                                                                                                                                                  |  |                                |             |                     |  
|ASSETS                                                                                                                                            |  |                                |             |                     |   |             | 
|Current assets:                                                                                                                                   |  |                                |             |                     |   |             | 
|Cash and cash equivalents, including restricted
cash of $4,038,081 as
  of December 31, 2006                                                      |  | $                              | 8,481,992   |                     | $ | 15,767,809  | 
|Accounts receivable, net of allowance for doubtful
accounts of
  $667,262 and $612,612 as of March 31, 2007 and December 31, 2006,
  respectively |  |                                | 26,120,001  |                     |   | 25,720,420  | 
|Prepaid expenses and other current assets                                                                                                         |  |                                | 4,067,082   |                     |   | 5,126,412   | 
|Deferred tax assets                                                                                                                               |  |                                | 77,489      |                     |   | 77,489      | 
|                                                                                                                                                  |  |                                |             |                     |   |             | 
|Total current assets                                                                                                                              |  |                                | 38,746,564  |                     |   | 46,692,130  | 
|                                                                                                                                                  |  |                                |             |                     |   |             | 
|                                                                                                                                                  |  |                                |             |                     |   |             | 
|Property and equipment, net                                                                                                                       |  |                                | 10,607,830  |                     |   | 10,372,820  | 
|                                                                                                                                                  |  |                                |             |                     |   |             | 
|Deferred financing costs, net of accumulated amortization of
  $1,153,389 and $465,592 as of March 31, 2007 and December 31, 2006, respectively   |  |                                | 12,635,784  |                     |   | 13,323,581  | 
|Intangible assets, net                                                                                                                            |  |                                | 40,429,170  |                     |   | 41,731,666  | 
|Goodwill                                                                                                                                          |  |                                | 94,081,276  |                     |   | 94,081,276  | 
|Security deposits and other assets                                                                                                                |  |                                | 1,867,094   |                     |   | 1,091,722   | 
|                                                                                                                                                  |  |                                |             |                     |   |             | 
|Total assets                                                                                                                                      |  | $                              | 198,367,718 |                     | $ | 207,293,195 | 
|                                                                                                                                                  |  |                                |             |                     |   |             | 

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)

|                                                                                                                         |  |                                |             |                     |   |             |  
|------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------ | ----------- | ------------------- | - | ----------- | -
|                                                                                                                         |  | March 31,
  2007
  (UNAUDITED) |             | December 31,
  2006 |  
|                                                                                                                         |  |                                |             |                     |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                     |  |                                |             |                     |   |             |  
|Current liabilities:                                                                                                     |  |                                |             |                     |   |             |  
|Accounts payable and accrued expenses                                                                                    |  | $                              | 18,807,830  |                     | $ | 19,336,863  |  
|Current portion of senior secured credit
facility                                                                        |  |                                | 6,000,000   |                     |   | 5,000,000   |  
|Current portion of long-term debt and capital lease
obligations                                                          |  |                                | 868,897     |                     |   | 801,449     |  
|Accrued registration rights expense                                                                                      |  |                                | 3,000,000   |                     |   |            |  
|Due to related parties                                                                                                   |  |                                | 154,901     |                     |   | 843,705     |  
|                                                                                                                         |  |                                |             |                     |   |             |  
|Total current liabilities                                                                                                |  |                                | 28,831,628  |                     |   | 25,982,017  |  
|                                                                                                                         |  |                                |             |                     |   |             |  
|                                                                                                                         |  |                                |             |                     |   |             |  
|Long-term liabilities:                                                                                                   |  |                                |             |                     |   |             |  
|Senior secured credit facility                                                                                           |  |                                | 47,000,000  |                     |   | 49,000,000  |  
|Convertible notes                                                                                                        |  |                                | 42,989,190  |                     |   | 41,485,758  |  
|Fair value of derivative instruments                                                                                     |  |                                | 29,144,689  |                     |   | 32,148,148  |  
|Long-term debt and capital lease
obligations                                                                             |  |                                | 1,229,642   |                     |   | 844,551     |  
|Deferred tax liabilities                                                                                                 |  |                                | 9,104,231   |                     |   | 11,162,321  |  
|Loan payable, related party                                                                                              |  |                                | 2,000,000   |                     |   | 2,000,000   |  
|                                                                                                                         |  |                                |             |                     |   |             |  
|Total long-term liabililities                                                                                            |  |                                | 131,467,752 |                     |   | 136,640,778 |  
|                                                                                                                         |  |                                |             |                     |   |             |  
|Total liabilities                                                                                                        |  |                                | 160,299,380 |                     |   | 162,622,795 |  
|                                                                                                                         |  |                                |             |                     |   |             |  
|Commitments and contingencies                                                                                            |  |                                |             |                     |   |             |  
|                                                                                                                         |  |                                |             |                     |   |             |  
|Stockholders equity:                                                                                                    |  |                                |             |                     |   |             |  
|Common stock, par value $0.001 per share 99,000,000
authorized shares
  shares issued and outstanding - 7,594,958 shares |  |                                | 7,595       |                     |   | 7,595       |  
|Additional paid-in capital                                                                                               |  |                                | 46,223,660  |                     |   | 45,509,334  |  
|Subscriptions receivable                                                                                                 |  |                                | (10,233     | )                   |   | (10,233     | )
|Accumulated deficit                                                                                                      |  |                                | (8,152,684  | )                   |   | (836,296    | )
|                                                                                                                         |  |                                |             |                     |   |             |  
|Total stockholders equity                                                                                               |  |                                | 38,068,338  |                     |   | 44,670,400  |  
|                                                                                                                         |  |                                |             |                     |   |             |  
|Total liabilities and stockholders
equity                                                                               |  | $                              | 198,367,718 |                     | $ | 207,293,195 |  
|                                                                                                                         |  |                                |             |                     |   |             |  

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)

|                                                                                                |  |                                      |            |                                                            |   |   | 
|----------------------------------------------------------------------------------------------- |  | ------------------------------------ | ---------- | ---------------------------------------------------------- | - | - | 
|                                                                                                |  | Three Months Ended 
  March 31, 2007 |            | February 6, 2006
  (date of inception)
  to March 31, 2006 |  
|                                                                                                |  |                                      |            |                                                            |  
|Revenues:                                                                                       |  |                                      |            |                                                            |   |   | 
|Air and ocean freight services                                                                  |  | $                                    | 21,474,531 |                                                            | $ |  | 
|Logistics services                                                                              |  |                                      | 24,588,974 |                                                            |   |  | 
|                                                                                                |  |                                      |            |                                                            |   |   | 
|Total revenues                                                                                  |  |                                      | 46,063,505 |                                                            |   |  | 
|                                                                                                |  |                                      |            |                                                            |   |   | 
|                                                                                                |  |                                      |            |                                                            |   |   | 
|Direct expenses:                                                                                |  |                                      |            |                                                            |   |   | 
|Air and ocean freight services                                                                  |  |                                      | 19,017,718 |                                                            |   |  | 
|Logistics services                                                                              |  |                                      | 20,724,744 |                                                            |   |  | 
|                                                                                                |  |                                      |            |                                                            |   |   | 
|Total direct expenses                                                                           |  |                                      | 39,742,462 |                                                            |   |  | 
|                                                                                                |  |                                      |            |                                                            |   |   | 
|Revenues less direct expenses                                                                   |  |                                      | 6,321,043  |                                                            |   |  | 
|                                                                                                |  |                                      |            |                                                            |   |   | 
|                                                                                                |  |                                      |            |                                                            |   |   | 
|Operating expenses:                                                                             |  |                                      |            |                                                            |   |   | 
|General and administrative expense (including
stock-based
  compensation expense of $1,060,759) |  |                                      | 8,633,370  |                                                            |   |  | 
|Depreciation and amortization                                                                   |  |                                      | 1,702,558  |                                                            |   |  | 
|                                                                                                |  |                                      |            |                                                            |   |   | 
|Total operating expenses                                                                        |  |                                      | 10,335,928 |                                                            |   |  | 
|                                                                                                |  |                                      |            |                                                            |   |   | 
|                                                                                                |  |                                      |            |                                                            |   |   | 
|Loss from operations                                                                            |  |                                      | (4,014,885 | )                                                          |   |  | 
|                                                                                                |  |                                      |            |                                                            |   |   | 
|Other income (expense):                                                                         |  |                                      |            |                                                            |   |   | 
|Interest income                                                                                 |  |                                      | 134,685    |                                                            |   |  | 
|Interest, finance charges and bank fees                                                         |  |                                      | (4,899,871 | )                                                          |   |  | 
|Gain on derivative instruments                                                                  |  |                                      | 1,801,905  |                                                            |   |  | 
|Registration rights expense                                                                     |  |                                      | (3,000,000 | )                                                          |   |  | 
|                                                                                                |  |                                      |            |                                                            |   |   | 
|Loss
  before income tax benefit                                                                |  |                                      | (9,978,166 | )                                                          |   |  | 
|                                                                                                |  |                                      |            |                                                            |   |   | 
|Income tax benefit                                                                              |  |                                      | 1,900,008  |                                                            |   |  | 
|                                                                                                |  |                                      |            |                                                            |   |   | 
|                                                                                                |  |                                      |            |                                                            |   |   | 
|Net loss                                                                                        |  | $                                    | (8,078,158 | )                                                          | $ |  | 
|                                                                                                |  |                                      |            |                                                            |   |   | 
|                                                                                                |  |                                      |            |                                                            |   |   | 
|Weighted average common shares outstanding, basic and
diluted                                   |  |                                      | 7,594,958  |                                                            |   |  | 
|                                                                                                |  |                                      |            |                                                            |   |   | 
|                                                                                                |  |                                      |            |                                                            |   |   | 
|Loss per common share, basic and diluted                                                        |  | $                                    | (1.06      | )                                                          | $ |  | 
|                                                                                                |  |                                      |            |                                                            |   |   | 

See accompanying notes to the condensed
consolidated financial statements.

3

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SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

|                                                                              |  |                                      |            |                                                            |   |   | 
|----------------------------------------------------------------------------- |  | ------------------------------------ | ---------- | ---------------------------------------------------------- | - | - | 
|                                                                              |  | Three Months Ended 
  March 31, 2007 |            | February 6, 2006
  (date of inception)
  to March 31, 2006 |  
|                                                                              |  |                                      |            |                                                            |  
|Cash flows from operating activities:                                         |  |                                      |            |                                                            |   |   | 
|Net loss                                                                      |  | $                                    | (8,078,158 | )                                                          | $ |  | 
|Adjustments to reconcile net loss to net cash used
in operating
  activities: |  |                                      |            |                                                            |   |   | 
|Provision for doubtful accounts                                               |  |                                      | 54,650     |                                                            |   |  | 
|Depreciation and amortization of property and
equipment                       |  |                                      | 400,062    |                                                            |   |  | 
|Amortization of deferred financing costs                                      |  |                                      | 687,797    |                                                            |   |  | 
|Amortization of intangible assets                                             |  |                                      | 1,302,496  |                                                            |   |  | 
|Amortization of discount on convertible
debt                                  |  |                                      | 1,063,648  |                                                            |   |  | 
|Stock-based compensation expense                                              |  |                                      | 1,060,759  |                                                            |   |  | 
|Gain on derivative instruments                                                |  |                                      | (1,801,905 | )                                                          |   |  | 
|Deferred income taxes                                                         |  |                                      | (2,058,090 | )                                                          |   |  | 
|Increase (decrease) in cash resulting from changes
in:                        |  |                                      |            |                                                            |   |   | 
|Accounts
  receivable                                                         |  |                                      | (454,231   | )                                                          |   |  | 
|Prepaid
  expenses and other current assets                                   |  |                                      | 1,059,330  |                                                            |   |  | 
|Accounts
  payable and accrued expenses                                       |  |                                      | (529,033   | )                                                          |   |  | 
|Accrued
  registration rights expense                                         |  |                                      | 3,000,000  |                                                            |   |  | 
|                                                                              |  |                                      |            |                                                            |   |   | 
|Net cash used in operating activities:                                        |  |                                      | (4,292,675 | )                                                          |   |  | 
|                                                                              |  |                                      |            |                                                            |   |   | 
|                                                                              |  |                                      |            |                                                            |   |   | 
|Cash flows from investing activities:                                         |  |                                      |            |                                                            |   |   | 
|Purchase of property and equipment                                            |  |                                      | (291,628   | )                                                          |   |  | 
|Security deposits and other assets                                            |  |                                      | (775,372   | )                                                          |   |  | 
|                                                                              |  |                                      |            |                                                            |   |   | 
|Net cash used in investing activities                                         |  |                                      | (1,067,000 | )                                                          |   |  | 
|                                                                              |  |                                      |            |                                                            |   |   | 

See accompanying notes to the condensed
consolidated financial statements.

4

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(UNAUDITED)

|                                                                 |  |                                      |            |                                                            |   |         | 
|---------------------------------------------------------------- |  | ------------------------------------ | ---------- | ---------------------------------------------------------- | - | ------- | 
|                                                                 |  |                                      |            |                                                            |   |         | 
|                                                                 |  | Three Months Ended 
  March 31, 2007 |            | February 6, 2006
  (date of inception)
  to March 31, 2006 |  
|                                                                 |  |                                      |            |                                                            |  
|Cash flows from financing activities:                            |  |                                      |            |                                                            |   |         | 
|Repayment of borrowings under the senior secured
credit facility |  | $                                    | (1,000,000 | )                                                          | $ |        | 
|Repayment of capital lease obligations                           |  |                                      | (237,338   | )                                                          |   |        | 
|Repayment of loan payable, related party                         |  |                                      | (688,804   | )                                                          |   |        | 
|                                                                 |  |                                      |            |                                                            |   |         | 
|Net cash used in financing activities                            |  |                                      | (1,926,142 | )                                                          |   |        | 
|                                                                 |  |                                      |            |                                                            |   |         | 
|Net decrease in cash and cash equivalents                        |  |                                      | (7,285,817 | )                                                          |   |        | 
|Cash and cash equivalents, beginning of period                   |  |                                      | 15,767,809 |                                                            |   |        | 
|                                                                 |  |                                      |            |                                                            |   |         | 
|Cash and cash equivalents, end of period                         |  | $                                    | 8,481,992  |                                                            | $ |        | 
|                                                                 |  |                                      |            |                                                            |   |         | 
|                                                                
|Supplemental disclosures of cash flow information:               |  |                                      |            |                                                            |   |         | 
|Cash paid during the period for:                                 |  |                                      |            |                                                            |   |         | 
|Interest                                                         |  | $                                    | 2,703,762  |                                                            | $ |        | 
|Income taxes                                                     |  | $                                    | 438,082    |                                                            | $ |        | 
|                                                                
|Noncash investing and financing activities:                      |  |                                      |            |                                                            |   |         | 
|Common stock issued in settlement of financing
cost              |  | $                                    |           |                                                            | $ | 59,500  | 
|Subscription receivable                                          |  | $                                    |           |                                                            | $ | 359,501 | 
|Property and equipment acquired under capital
leases             |  | $                                    | 343,444    |                                                            | $ |        | 

See accompanying notes to the condensed
consolidated financial statements.

5

---



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, the
    Company, we, us, and/or our) through
    the wholly-owned operating subsidiary, Maritime Logistics US Holdings Inc.
    (Maritime or 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 Kenilworth, 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. 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. During the quarter ended March
  31, 2007, Seamaster Logistics (Shanghai) Ltd. was formed as a wholly-owned
  subsidiary of SLHL to expand the logistics business 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.

6

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | 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).                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | 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 condensed consolidated
  financial position as of March 31, 2007 and the unaudited condensed
  consolidated statements of operations and cash flows for the quarter ended
  March 31, 2007 and for the period February 6, 2006 (date of inception)
  to March 31, 2006.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The
  unaudited condensed consolidated results of operations for the quarter ended
  March 31, 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., FMI Holdco I LLC, and their
  subsidiaries (collectively, the Company).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Revenue Recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Air and Ocean Freight Services.Revenue
  is recognized at the time of shipment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

7

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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, as well as the fees charged for the
  disbursements made on behalf of a customer. Customs brokerage revenue is
  included in air and ocean freight services.                                                                                                                                                                                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | 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.

8

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)

| |                                                                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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 ad related allowance for
  depreciation and amortization are eliminated from accounts and any resulting
  gain or loss is reflected in net income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | 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 and Emerging
  Issues Task Force Issue (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 No. 05-02, The Meaning of Conventional Convertible
  Debt Instruments, in EITF No. 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 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
  No. 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 expense 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s) settled in stock,                                                                                                                                                                                                                                               

9

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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 PSAs, 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | 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 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).

10

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(UNAUDITED)

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
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. Foreign Currency Translation The Companys
foreign subsidiary 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.
Consolidated statement of income amounts have been translated using the average
exchange rate for the period. The financial information of SLHL has been
translated from its functional foreign currency to U.S. dollars. Adjustments
from such translation were not material. (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. Recently Issued Accounting Pronouncements In February
2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets
and Financial Liabilities - Including an amendment of SFAS No. 115 (SFAS 159).
SFAS 159, which becomes effective for the Company on January 1, 2008, permits
companies to choose to measure many financial instruments and certain other
items at fair value and report unrealized gains and losses in earnings. Such
accounting is optional and is generally to be applied instrument by instrument.
The Company does not anticipate that election, if any, of this fair-value
option will have a material effect on its consolidated financial condition,
results of operations, cash flows or disclosures. In October
2006, the FASB issued FSP No. 123(R)-5, Amendment of FSP FAS 123(R)-1, (FSP
FAS123(R)-5) to address whether a change to an equity instrument in connection
with an equity restructuring should be considered a modification for the
purpose of applying FSP No. FAS 123(R)-1, Classification and Measurement of
Freestanding Financial Instruments Originally Issued in Exchange for Employee
Services under SFAS Statement No 123(R) (FSP FAS123(R)-1). FSP FAS 123(R)-1
states that financial instruments issued to employees in exchange for past or
future services are subject to the provisions of SFAS 123(R) unless the terms
of the award are modified when the holder is no longer an employee. In FSP FAS
123(R)-5, the FASB staff concluded that changes to the terms of an award that
are made solely due to an equity restructuring are not considered modifications
as described in FSP FAS 123(R)-1 unless the fair value of the award increases,
anti-dilution provisions are added, or holders of the same class of equity
instruments are treated unequally. FSP FAS 123(R)-5 is effective for the first
reporting period beginning after October 10, 2006. The adoption of FSP FAS
123(R)-5 did not have a material impact on the Companys unaudited condensed
consolidated financial statements.


11

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(UNAUDITED)

|   |                                            
|-- | -------------------------------------------
|3. | PRO FORMA FINANCIAL INFORMATION (UNAUDITED)

The following
table sets forth the unaudited pro forma results of operations of the Company
for the three months ended March 31, 2006. The unaudited pro forma financial
information summarizes the results of operations for the three months ended
March 31, 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 Amerussia Shipping Company, Inc. and Subsidiary.
    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 year presented or that may be obtained in the future.


|                                                       |  |                                           |            |   |  |  | 
|------------------------------------------------------ |  | ----------------------------------------- | ---------- | - |  |  | 
|                                                       |  | Three Months
    Ended
    March 31, 2006 |            |   | 
|                                                       |  |                                           |            |   | 
|Total revenues                                         |  | $                                         | 44,985,741 |   |  |  | 
|Total direct expenses                                  |  |                                           | 36,455,180 |   |  |  | 
|                                                       |  |                                           |            |   |  |  | 
|Revenues less direct
  expenses                        |  |                                           | 8,530,561  |   |  |  | 
|Total operating expenses                               |  |                                           | 7,507,867  |   |  |  | 
|                                                       |  |                                           |            |   |  |  | 
|Income from operations                                 |  |                                           | 1,022,694  |   |  |  | 
|                                                       |  |                                           |            |   |  |  | 
|Other income (expenses):                               |  |                                           |            |   |  |  | 
|Interest expense, net,
  finance charges and bank fees |  |                                           | (4,652,941 | ) |  |  | 
|                                                       |  |                                           |            |   |  |  | 
|Loss before income tax
  benefit                       |  |                                           | (3,630,247 | ) |  |  | 
|Income tax benefit                                     |  |                                           | 1,451,957  |   |  |  | 
|                                                       |  |                                           |            |   |  |  | 
|Net loss                                               |  | $                                         | (2,178,290 | ) |  |  | 
|                                                       |  |                                           |            |   |  |  | 



|   |                       
|-- | ----------------------
|4. | PROPERTY AND EQUIPMENT

At
March 31, 2007 and December 31, 2006, property and equipment consisted of the
following:

12

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(UNAUDITED)

|                                                   |  |                                |            |                       |   |            |  
|-------------------------------------------------- |  | ------------------------------ | ---------- | --------------------- | - | ---------- | -
|                                                   |  | March 31,
  2007
  (UNAUDITED) |            | December
  31,
  2006 |  
|                                                   |  |                                |            |                       |  
|Office, computer and
  communication equipment     |  | $                              | 1,402,377  |                       | $ | 1,164,670  |  
|Transportation equipment                           |  |                                | 696,989    |                       |   | 421,384    |  
|Warehouse and terminal
  equipment                 |  |                                | 8,399,706  |                       |   | 8,411,961  |  
|Leasehold improvements                             |  |                                | 684,515    |                       |   | 684,515    |  
|Construction in progess                            |  |                                | 151,934    |                       |   | 17,919     |  
|                                                   |  |                                |            |                       |   |            |  
|                                                   |  |                                | 11,335,521 |                       |   | 10,700,449 |  
|Less - Accumulated
  depreciation and amortization |  |                                | (727,691   | )                     |   | (327,629   | )
|                                                   |  |                                |            |                       |   |            |  
|Net book value of property
  and equipment         |  | $                              | 10,607,830 |                       | $ | 10,372,820 |  
|                                                   |  |                                |            |                       |   |            |  

Depreciation
and amortization expense was $400,062 for the three months ended March 31, 2007
and none for the period from February 6, 2006 (date of inception) to March 31,
2006.


13

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

The changes in
capital leases included in property and equipment are:


|                                         |  |                                                   |           |                     |   |           |  
|---------------------------------------- |  | ------------------------------------------------- | --------- | ------------------- | - | --------- | -
|                                         |  | Three Months Ended
  March 31, 2007
  (UNAUDITED) |           | December
  31, 2006 |  
|                                         |  |                                                   |           |                     |  
|Capital leases, beginning
  of period    |  | $                                                 | 1,922,104 |                     |   |           |  
|Assets acquired through
  capital leases |  |                                                   | 343,444   |                     |   |           |  
|                                         |  |                                                   |           |                     |   |           |  
|Capital leases, end of
  period          |  |                                                   | 2,265,548 |                     | $ | 1,922,104 |  
|Less - accumulated
  depreciation        |  |                                                   | (225,513  | )                   |   | (96,639   | )
|                                         |  |                                                   |           |                     |   |           |  
|Net book value of capital
  leases       |  | $                                                 | 2,040,035 |                     | $ | 1,825,465 |  
|                                         |  |                                                   |           |                     |   |           |  

Depreciation
expense for capital leases was $128,874 for the three months ended March 31,
2007 and none for the period from February 6, 2006 (date of inception) to March
31, 2006.


|   |                  
|-- | -----------------
|5. | INTANGIBLE ASSETS

Intangible
assets consist of the following:

|                         |  |                                |            |                       |   |            |  
|------------------------ |  | ------------------------------ | ---------- | --------------------- | - | ---------- | -
|                         |  | March 31,
  2007
  (UNAUDITED) |            | December
  31,
  2006 |  
|                         |  |                                |            |                       |  
|Trademark                |  | $                              | 1,800,000  |                       | $ | 1,800,000  |  
|Software and other       |  |                                | 3,300,000  |                       |   | 3,300,000  |  
|Customer list            |  |                                | 37,500,000 |                       |   | 37,500,000 |  
|                         |  |                                |            |                       |   |            |  
|                         |  |                                | 42,600,000 |                       |   | 42,600,000 |  
|Accumulated amortization |  |                                | (2,170,830 | )                     |   | (868,334   | )
|                         |  |                                |            |                       |   |            |  
|Net carrying value       |  | $                              | 40,429,170 |                       | $ | 41,731,666 |  
|                         |  |                                |            |                       |   |            |  

|   |                               
|-- | ------------------------------
|6. | 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%. 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.


14

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(UNAUDITED)

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. No earlier than
November 9, 2007 up to $20 million of the cash proceeds from any equity
issuance, as defined, received prior to November 8, 2007 may be used to prepay
the term loans under the senior secured credit facility and such prepayment will
not be subject to the prepayment fee, as defined. 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% annum payable monthly. The
servicing fee equals $25,000, 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 $6,194,000. 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 income 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.
    The Company failed to meet certain reporting and non-financial covenants
    under the senior secured credit facility in 2006 and failed to meet certain
    financial covenants contained in the senior secured credit agreement for
    the first quarter of 2007. The Company entered into a forbearance agreement
    with the senior secured creditor to forbear exercising any rights and remedies
    under the senior credit facility documents relating to these defaults until
    the earlier of June 15, 2007 or the occurrence of another event of default.
    In exchange for agreeing to enter the forbearance agreement, the senior secured
    creditor required that we modify the terms of the revolving loan portion
    of the senior credit facility to make the funds thereunder restricted for
    borrowing at their discretion. On May 21,
2007, the Company amended the terms of its senior secured credit facility (see
Note 15, Subsequent Events).


15

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(UNAUDITED)

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|7. | 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 notes are 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 initial exercise price
  equal to $11.00 per share (subject to adjustment).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The notes
  bear interest at a rate per annum equal to LIBOR plus the applicable margin
  then in effect. 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 $6,107,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | 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 the 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 Company
  entered into a forbearance agreement with the senior secured creditor to
  forbear exercising any rights and remedies under the senior credit facility
  documents relating to these defaults until the earlier of June 15, 2007 or
  the occurrence of another event of default. Pursuant to the forbearance
  agreement with the senior secured creditor, this agreement and the current
  inter-creditor agreement between our senior secured creditor and the
  convertible noteholders prohibits the convertible noteholders from receiving
  payments from the Company other than regularly scheduled principal and
  interest payments. On May 21, 2007, the Company amended the terms of its
  convertible notes (see Note 15, Subsequent Events).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|8. | 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 20%.                                                                             
| |   |                                                                                                    
| |  | Annual
  volatility of 50%.                                                                        
| |   |                                                                                                    
| |  | Note default
  of 5% increasing 0.1% per quarter.                                                  
| |   |                                                                                                    
| |  | Alternative
  financing available of 0% initially, increasing 1% per quarter to a maximum
  of 10%.

16

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(UNAUDITED)

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Conversion
  pricing and exercise reset events occurring 5% of the time resulting in a
  weighted average conversion price of $10.937 and the warrant exercise price
  adjustment factor of 0.994.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                   
| | The
  valuations of the embedded derivatives within the convertible note and
  investor warrants at the effective date of issuance are recorded as a
  discount to the face value of the convertible notes. The discount is
  amortized over the life of the note 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 $1,428,673 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
  $7,361,264 on November 8, 2006. These derivative liabilities were fair valued
  as of March 31, 2007 as follows:

|                                                             |  |   |            | 
|------------------------------------------------------------ |  | - | ---------- | 
|Compound embedded
  derivatives within the convertible notes |  | $ | 14,744,495 | 
|Warrants attached to
  convertible notes                     |  |   | 7,446,325  | 
|Warrants attached to
  common shares                         |  |   | 6,953,869  | 
|                                                             |  |   |            | 
|                                                             |  | $ | 29,144,689 | 
|                                                             |  |   |            | 

|   |                                                                                                                                                                                                                                                                                                                                                                      
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|9. | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                      
|   | As of March
  31, 2007, the Company owed two shareholders a total of $154,901 related to
  the acquisition and reimbursement of net monies received on their behalf.
  This amount is reported as due to related parties on the unaudited condensed
  consolidated balance sheet.                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                      
|   | As of
  December 31, 2006, the Company owed three shareholders a total of $843,705
  related to the acquisition and reimbursement of net monies received on their
  behalf. This amount is reported as due to related parties on the consolidated
  balance sheet.                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                      
|   | Pursuant to
  the purchase agreement to acquire SLHL, the seller was required to loan the
  Company $2,000,000. As of March 31, 2007, the seller has loaned the Company
  $2,000,000. 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.
|   |                                                                                                                                                                                                                                                                                                                                                                      
|   | The Company
  has received a commitment from FMI Inc., an entity whose stockholders are
  also stockholders in the Company, to provide up to $7.5 million to replace
  the revolving portion of the Senior Credit Facility, on terms to be
  determined. (See Note 15, Subsequent Events).                                                                           

17

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(UNAUDITED)

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10. | 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 for the three months ended March 31, 2007 and for the period
  from February 6, 2006 (date of inception) to March 31, 2006 were approximately
  $100,000 and none, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|11. | 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 March 31, 2007 is 1,633,500 shares.
  As of March 31, 2007, the Board of Directors have authorized the issuance of
  options to purchase 1,175,000 shares of common stock and the issuance of
  233,500 shares of restricted stock under the 2006 Plan. As of March 31, 2007,
  the Company granted 667,000 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 have a 3 year option 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 $1,060,759 for the three months
  ended March 31, 2007 and none for the period from February 6, 2006 (date of
  inception) to March 31, 2006 and is included in general and administrative
  expenses.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|12. | INCOME TAXES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | Effective
  January 1, 2007, the Company adopted FIN 48, and as of March 31, 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.
  The Company because of the acquisitions is subject to U.S. federal or state
  income tax examinations by tax authorities for years after 2002. 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 March 31, 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|13. | LEASE COMMITMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | The Company
  leases various facilities and equipment in accordance with noncancelable
  operating lease agreements, which expire at various dates through 2012. Total
  rent expense (net of sublease income) was $3,322,784 for the three months
  ended March 31, 2007 and none for the period from February 6, 2006 (date of
  inception) to March 31, 2006. The amount of sublease income recorded as an
  offset to rental expense was                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

18

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(UNAUDITED)

| |                                                                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | $927,366 for
  the three months ended March 31, 2007 and none for the period from February
  6, 2006 (date of inception) to March 31, 2006.                                                                                   
| |                                                                                                                                                                                                                               
| | 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 March
  31, 2007, future minimum lease payments required under noncancelable leases
  are as follows:                                                                                                                   

|                                                   |   |                  |         |                    |            |            | 
|-------------------------------------------------- | - | ---------------- | ------- | ------------------ | ---------- | ---------- | 
|Year ending
  December 31,                         |   | Capital
  leases |         | Operating
  leases |           
|                                                   |   |                  |         |                    |           
|                                                  
|2007                                               |   | $                | 742,993 |                    | $          | 12,445,000 | 
|2008                                               |   |                  | 870,644 |                    |            | 15,197,000 | 
|2009                                               |   |                  | 307,801 |                    |            | 12,091,000 | 
|2010                                               |   |                  | 8,430   |                    |            | 10,225,000 | 
|2011                                               |   |                  |        |                    |            | 7,827,000  | 
|Thereafter                                         |   |                  |        |                    |            | 6,195,000  | 
|                                                   |   |                  |         |                    |            |            | 
|Total future minimun lease payments                |   | 1,929,868        |         | $                  | 63,980,000 |           
|                                                   |   |                  |         |                    |            |           
|Less - Amount representing interest                |   | (177,762         | )       |                    |            |           
|                                                   |   |                  |         |                    |            |           
|Present value of future net minimum lease
payments | $ | 1,752,106        |         |                    |            |           
|                                                   |   |                  |         |                    |            |           

19

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(UNAUDITED)

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|14. | 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, and consequently, is obligated to pay the holders of the notes and
  warrants substantial penalty payments. As of March 31, 2007, the Company
  recorded a liability of $3,000,000 based on the agreement signed on May 21,
    2007 (see Note 15, Subsequent Events).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | The
  registration payment arrangement is related to the financing transaction
  completed in November 2006 in which the Company agreed to register and
  maintain the registration of the shares underlying the convertible debt as
  well as the common stock and warrants issued in the financing. The obligation
  to maintain the registration is for the life of the note and the warrants.
  The Company did not complete its registration by January 7, 2007 or maintain
  its registration throughout the period that the note and/or warrants were
  outstanding, and, accordingly is obligated to pay a cash penalty of 2% of the
  face value of the note per month, with a maximum penalty of 10% or
  $6,500,000. As of March 31, 2007, the Company determined that the
  registration payment provisions of the note financing was probable and
  recorded a liability of $3,000,000, based on the agreement signed on May 21,
  2007 (see Note 15, Subsequent Events). In addition, the adoption of this FSP
  requires the Company to record a cumulative-effect adjustment to retained earnings
    for the change in accounting principle in the amount of $761,770, which accounts
    for the removal of the registration rights penalty from the compound embedded
  derivatives as of December 31, 2006, and adjusts the discount on the note
    based on the removal of the registration rights penalty from the discount.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | Contingent Payments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | In
  connection with the acquisitions, the Company has contractual commitments to
  make earn-out payments to former shareholders of TUG and SLI based upon
  agreed target levels. In addition, there are contingent earn-out payments
  based upon achievement of earnings above the targets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | Revolver Loan Commitment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | The Company
  has received a commitment from FMI, Inc., an entity whose stockholders are
    also stockholders of the Company, to provide up to $7.5 million to replace
    the revolving portion of the Senior Credit Facility, on terms to be determined.
    (See Note 15, Subsequent Events.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | Claims and Lawsuits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | In March
  2006, a former customer filed suit against FMI asserting claims for breach
    of contract, among other things and seeking damages of approximately $1,738,000.
  In May 2006, FMI filed a counterclaim for an amount in excess of the damages
  claimed by this former customer. The parties were ordered to arbitration in
  April 2007 and the resolution is still pending. The Company is ordinarily
  involved in claims and lawsuits which arise in the normal course of business.
  In the opinion of management, these claims and the liability resulting from
  these matters, if any, will not have a material effect on the Companys
  financial position.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

20

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(UNAUDITED)

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|15. | SUBSEQUENT EVENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Corporate Headquarters Lease                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | On May 15,
  2007, the Company entered into a lease agreement for fully furnished office
  space to be used for corporate headquarters in East Rutherford, New Jersey.
  The lease term commences June 2007 and expires December 2008. The monthly
  rent for the office space is $8,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Stock options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | In
  April 2007, the Board of Directors, on the recommendation of the Compensation
  Committee, proposed an increase of an additional 250,000 shares of the common
  stock of the Company to issue to employees and prospective employees under
  the Companys 2006 Equity Incentive Plan. In May 2007, the Stockholders
  of the Company approved this proposal to increase the shares of common stock
  to the Companys 2006 Equity Incentive Plan at the Companys Annual
  Meeting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Amendments to senior secured credit facility and restructuring
      of convertible notes, and private placement notes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Credit Facility.On May 21, 2007, in
  connection with the restructuring of the senior secured credit facility, the
  Company agreed to pay the senior secured creditor $265,000 and increase the
  interest rate on the loan facilities,
  in exchange, the lenders agreed that all declared events of default were
  waived and modified the financial covenants. 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, except at their discretion.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | 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 anytime 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 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.
In exchange for $2 million of new convertible notes (as described
    below), the
    holders of the convertible notes waived their 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 (classified in the unaudited condensed balance
    sheet as of March 31, 2007 as accrued registration rights expense). The agreement
    calls for 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.

21

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(UNAUDITED)

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | New Convertible Notes.On May 21, 2007, the Company amended and restated the senior
  secured convertible notes to increase the principal amount of the notes by
    $12.5 million of new convertible notes, default interest and a $2 million
    fee (as discussed above), and 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 restructuring warrants,
    to the holders of the existing notes, to raise working capital. The Company
    sold $2.5 million of additional convertible notes and warrants (exercisable
  for up to 50% of the number of shares of common stock issuable upon
  conversion of the notes), on substantially the same terms, to the management
  of the Company. The Company can issue up to $2.0 million of additional
  convertible notes and warrants (exercisable for up to 50% of the number of
  shares of common stock issuable upon conversion of the notes), to certain
  professionals of the Company in satisfaction of fees owed to such
  professionals. The new secured 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 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
  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 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 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 to common stock of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | The debt
  issuance cost at the date of issuance of the restructured convertible notes
  and the new notes amounted to approximately $2,577,000. An aggregate default
  interest payment of $400,833 in connection with a failure to deliver timely
  the quarterly financial statements of the Company at year-end 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | The Company
  may redeem all or any portion of the restructured convertible notes and the
  new notes on or after the third anniversary of the issuance of the
  restructuring convertible notes or new 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, 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

22

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(UNAUDITED)

| |                                                                                                                                                                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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 March
  31, 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.

23

---



Item I. Financial Statements - Predecessor Companies



FMI HOLDCO I
LLC AND SUBSIDIARY

CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)

THREE MONTHS ENDED MARCH 31, 2006

|                                        |  |   |            |  
|--------------------------------------- |  | - | ---------- | -
|Revenues                                |  | $ | 27,893,371 |  
|                                        |  |   |            |  
|Expenses                                |  |   |            |  
|Direct expenses, excluding depreciation |  |   | 21,102,764 |  
|Facility shutdown and other costs       |  |   | 64,523     |  
|Depreciation and amortization           |  |   | 1,047,851  |  
|General and administrative              |  |   | 3,209,087  |  
|                                        |  |   |            |  
|Income from operations                  |  |   | 2,469,146  |  
|                                        |  |   |            |  
|                                        |  |   |            |  
|Other
  income (expense)                |  |   |            |  
|Interest income                         |  |   | 12,898     |  
|Interest expense and bank fees          |  |   | (1,387,292 | )
|                                        |  |   |            |  
|                                        |  |   | (1,374,394 | )
|                                        |  |   |            |  
|                                        |  |   |            |  
|Income before income taxes              |  |   | 1,094,752  |  
|                                        |  |   |            |  
|Income taxes                            |  |   | 60,184     |  
|                                        |  |   |            |  
|                                        |  |   |            |  
|Net income                              |  | $ | 1,034,568  |  
|                                        |  |   |            |  

See accompanying notes to Condensed
Consolidated Statement of Operations.

24

---



FMI HOLDCO I LLC AND SUBSIDIARY

CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)

THREE MONTHS ENDED MARCH 31, 2006

|                                                                                                                    |  |   |            |  
|------------------------------------------------------------------------------------------------------------------- |  | - | ---------- | -
|Cash flows from operating activities:                                                                               |  |   |            |  
|Net income                                                                                                          |  | $ | 1,034,568  |  
|Adjustments
  to reconcile net income to net cash provided by operating activitiesProvision for doubtful
  accounts |  |   | 151,960    |  
|Depreciation and amortization                                                                                       |  |   | 342,959    |  
|Amortization of intangibles                                                                                         |  |   | 628,085    |  
|Changes in assets and liabilities                                                                                   |  |   |            |  
|Accounts receivable                                                                                                 |  |   | (701,543   | )
|Prepaid expenses and other current
assets                                                                           |  |   | (716,192   | )
|Deposits                                                                                                            |  |   | (817       | )
|Deferred rent                                                                                                       |  |   | (120,149   | )
|Accounts payable and accrued expenses                                                                               |  |   | (450,306   | )
|                                                                                                                    |  |   |            |  
|Net
  cash provided by operating activities                                                                         |  |   | 168,565    |  
|                                                                                                                    |  |   |            |  
|Cash
  flows from investing activities                                                                              |  |   |            |  
|Acquisition of property and equipment                                                                               |  |   | (209,812   | )
|                                                                                                                    |  |   |            |  
|Net
  cash used in investing activities                                                                             |  |   | (209,812   | )
|                                                                                                                    |  |   |            |  
|Cash
  flows from financing activities                                                                              |  |   |            |  
|Repayment of long-term debt and capital lease
obligations                                                           |  |   | (1,174,815 | )
|Debt issuance costs                                                                                                 |  |   | 9,998      |  
|                                                                                                                    |  |   |            |  
|Net
  cash used in financing activities                                                                             |  |   | (1,164,817 | )
|                                                                                                                    |  |   |            |  
|Net decrease in cash and cash
equivalents                                                                           |  |   | (1,206,064 | )
|                                                                                                                    |  |   |            |  
|Cash and cash equivalents,
  beginning of period                                                                    |  |   | 1,580,213  |  
|                                                                                                                    |  |   |            |  
|Cash and cash equivalents, end of
period                                                                            |  | $ | 374,149    |  
|                                                                                                                    |  |   |            |  
|                                                                                                                    |  |   |            |  
|Supplemental
  cash flow disclosures                                                                                |  |   |            |  
|Interest paid                                                                                                       |  | $ | 1,319,118  |  
|Income taxes paid                                                                                                   |  | $ | 60,184     |  
|                                                                                                                    |  |   |            |  
|Noncash
  investing and financing activities                                                                        |  |   |            |  
|Property and equipment acquired under capital
leases                                                                |  | $ | 26,000     |  

See accompanying notes to Condensed Consolidated
Statement of Cash Flows.

25

---



FMI HOLDCO I LLC AND SUBSIDIARY

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

THREE MONTHS ENDED MARCH 31, 2006

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.


26

---



FMI HOLDCO I LLC AND SUBSIDIARY

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

THREE MONTHS ENDED MARCH 31, 2006

1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Concentration of Credit Risk (continued) The Company
provides an allowance for doubtful accounts based on specifically identified
amounts that are deemed to be uncollectible. In addition, an allowance is
provided based on historical experience and assessments of the general
financial conditions affecting the customer base. The Company has a limited
number of customers with individually large amounts due at any given date. Any
unanticipated change in one of those customers credit worthiness, or other
matters affecting the collectibility of amounts due from such customers, could
have a material affect on the Companys results of operations in the period in
which such changes or events occur. After all
attempts to collect a receivable have failed, the receivable is written off
against the allowance. At March 31,
2006, approximately 15.5% and 8.8% of accounts receivable are due from two
customers. The Company
generated approximately 21% and 15% of its revenues for the three months ended
March 31, 2006 from two customers. 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. 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)

THREE MONTHS ENDED MARCH 31, 2006

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 months ended March 31, 2006 were approximately $100,000.

3 - RELATED PARTY TRANSACTIONS

|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|----------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                        | The Company
  paid $104,489 to KRG Capital (KRG) during the three months ended March 31,
  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 $104,489 for the three months ended March 31, 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 $65,134 in the three months ended March 31, 2006
  related to the facility shutdown.

28

---





TUG LOGISTICS, INC. AND AFFILIATES

CONDENSED COMBINED STATEMENT OF OPERATIONS
(UNAUDITED)

THREE MONTHS ENDED MARCH 31, 2006

|                              |  |   |            | 
|----------------------------- |  | - | ---------- | 
|Net sales                     |  | $ | 16,453,653 | 
|                              |  |   |            | 
|Cost of sales                 |  |   | 14,842,826 | 
|                              |  |   |            | 
|Gross profit                  |  |   | 1,610,827  | 
|                              |  |   |            | 
|Operating expenses            |  |   |            | 
|General and administrative    |  |   | 1,263,928  | 
|Depreciation and amortization |  |   | 11,718     | 
|                              |  |   |            | 
|Operating expenses            |  |   | 1,275,646  | 
|                              |  |   |            | 
|Income from operations        |  |   | 335,181    | 
|                              |  |   |            | 
|Interest
  income             |  |   | 2,758      | 
|                              |  |   |            | 
|Income before income taxes    |  |   | 337,939    | 
|                              |  |   |            | 
|Income taxes                  |  |   | 37,259     | 
|                              |  |   |            | 
|                              |  |   |            | 
|Net income                    |  | $ | 300,680    | 
|                              |  |   |            | 

See accompanying notes to the Condensed
Combined Statement of Operations.

29

---



TUG LOGISTICS, INC. AND AFFILIATES

CONDENSED COMBINED STATEMENT OF CASH FLOWS
(UNAUDITED)

THREE MONTHS ENDED MARCH 31, 2006

|                                                                                   |  |   |           |  
|---------------------------------------------------------------------------------- |  | - | --------- | -
|Cash flows from operating activities                                               |  |   |           |  
|Net income                                                                         |  | $ | 300,680   |  
|Adjustments to reconcile net income to net
  cash provided by operating activities |  |   |           |  
|Depreciation                                                                       |  |   | 11,719    |  
|Provision for doubtful accounts                                                    |  |   | 149,000   |  
|Changes in assets and liabilities                                                  |  |   |           |  
|Accounts receivable                                                                |  |   | 816,579   |  
|Prepaid expenses and other current assets                                          |  |   | (92,110   | )
|Security deposits                                                                  |  |   | 41,865    |  
|Accounts payable and accrued expenses                                              |  |   | (517,923  | )
|Income taxes payable                                                               |  |   | 9,576     |  
|                                                                                   |  |   |           |  
|Net cash provided by operating
activities                                          |  |   | 719,386   |  
|                                                                                   |  |   |           |  
|                                                                                  
|Cash flows from investing activities                                               |  |   |           |  
|Notes receivable, related parties                                                  |  |   | 98,141    |  
|Acquisition of property and equipment                                              |  |   | (22,199   | )
|                                                                                   |  |   |           |  
|Net cash provided by investing
activities                                          |  |   | 75,942    |  
|                                                                                   |  |   |           |  
|                                                                                  
|Cash flows from financing activities                                               |  |   |           |  
|Principal payments of long term debt and capital
  lease obligations               |  |   | (229,056  | )
|                                                                                   |  |   |           |  
|Net cash used in financing activities                                              |  |   | (229,056  | )
|                                                                                   |  |   |           |  
|                                                                                   |  |   |           |  
|Net
      increase in cash and cash equivalents, end of period                     |  | $ | 566,272   |  
|                                                                                   |  |   |           |  
|                                                                                   |  |   |           |  
|Cash and cash
    equivalents, beginning of period                                 |  |   | 1,461,068 |  
|                                                                                   |  |   |           |  
|Cash
      and cash equivalents, end of period                                     |  | $ | 2,027,340 |  
|                                                                                   |  |   |           |  
|Supplemental cash flow disclosures                                                 |  |   |           |  
|Interest paid                                                                      |  | $ | 743       |  
|Income taxes paid                                                                  |  | $ | 27,683    |  

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

30

---



TUG LOGISTICS, INC. AND AFFILIATES

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

THREE MONTHS ENDED MARCH 31, 2006

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. 31


---



TUG LOGISTICS, INC. AND AFFILIATES

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

THREE MONTHS ENDED MARCH 31, 2006

1 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)

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 $100,000 for
each company for each bank. Balances in these accounts at times exceed the
insured limit. 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. MIAMI and
GLARE are C corporations for federal income tax purposes and are also subject
to state income taxes in various jurisdictions. 32


---



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 relates 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 and 10-K/A for the year ended December 31, 2006, 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,
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 months ended March 31, 2007 and the period from February 6, 2006
(date of inception) to March 31, 2006. Also included are separate unaudited condensed
consolidated statements of operations and cash flows of FMI Holdco I LLC, and
Subsidiary; and separate unaudited condensed combined  statements of operations
and cash flows of TUG Logistics, Inc. and Affiliates (Predecessor Companies)
for the three monthes ended March 31, 2006. The financial information
presented is not necessarily indicative of the future financial position or future
results of operations of the consolidated enterprise.

33

---



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 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 its
    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. As a result of the merger and the issuance of stock to the
    security holders of MLI, the former security holders of MLI held 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 (as described
    herein). 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 its security holders.

As a key part
  of our growth strategy, we expect to seek to acquire additional asset-light
  logistics providers and freight forwarders. We believe there are attractive
  acquisition candidates in our industry because of the highly fragmented
  composition of the marketplace, the industry participants needs for capital
  and their owners desires for liquidity. We intend to pursue a strategic
  acquisition program to consolidate and enhance its position in its current
  market and to acquire operations in new markets.

Initially, we
intend to grow our business through acquisitions in key gateway locations, such
as Chicago, India and Thailand, as part of our strategy to expand our base of
operations. We believe that our domestic and expanded international
capabilities, when taken together, will provide significant competitive
advantages in the marketplace.

We believe we
can successfully implement our acquisition strategy due to the following
factors:

| |   |                                                                                                                                                                                                                         
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the highly
  fragmented composition of the market;                                                                                                                                                                      
| |   |                                                                                                                                                                                                                         
| |  | our strategy
  for creating an organization with global reach should enhance an acquired
  companys ability to compete in its local and regional market through a broader
  service offering and lower operating costs;
| |   |                                                                                                                                                                                                                         
| |  | the
  potential for increased profitability as a result of our centralization of
  certain administrative functions, greater purchasing power, and economies of
  scale;                                                
| |   |                                                                                                                                                                                                                         
| |  | our
  centralized management capabilities which should enable us to effectively
  manage our growth and integrate the companies we acquire;                                                                             
| |   |                                                                                                                                                                                                                         
| |  | our status
  as a public corporation should provide us with a currency for acquisitions;                                                                                                                                
| |   |                                                                                                                                                                                                                         
| |  | the ability
  of our management to identify, acquire and integrate acquisition
  opportunities; and                                                                                                                     
| |   |                                                                                                                                                                                                                         
| |  | our ability
  to develop and maintain key customer relationships in the industry.                                                                                                                                       

Certain of our
financing documents contain covenants which substantially restrict our ability
to consummate acquisitions in the future. These restrictions could materially
and adversely affect the implementation of our growth strategy. Please refer to
Senior Secured Credit Facility in this section for more information.

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, SLI, 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
first half of 2007. 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.

34

---



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
quarters ended March 31, 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.

Aerobic
Creations Inc. (Aerobic) merged with Maritime Logistics US Holdings, Inc.
(Maritime) on November 8, 2006. On February 20, 2007, Aerobic changed its
name to Summit Global Logistics, Inc. (Summit). The financial information
noted as Summit reflects the results of operations of Summit Global Logistics
Inc. and subsidiaries from February 6, 2006 (date of inception).

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

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 noted as TUG reflects the results of operations of the TUG entities
acquired prior to the date of the merger.

Geographic Operating Results.

We manage our
business through three geographic areas comprised of the Americas, Asia Pacific
and Europe, 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. Our unaudited consolidated
revenues and operating income for the three months ended March 31, 2007 are set
forth in the following table (in millions):

|             |  |                                       |      |                                                              |   |   | 
|------------ |  | ------------------------------------- | ---- | ------------------------------------------------------------ | - | - | 
|             |  | Three Months
  Ended
  March 31, 2007 |      | February
  6, 2006
  (date of inception)
  to March 31, 2006 |  
|             |  |                                       |      |                                                              |  
|Revenues:    |  |                                       |      |                                                              |   |   | 
|Americas     |  | $                                     | 25.3 |                                                              | $ |  | 
|Asia Pacific |  |                                       | 20.8 |                                                              |   |  | 
|             |  |                                       |      |                                                              |   |   | 
|             |  | $                                     | 46.1 |                                                              | $ |  | 
|             |  |                                       |      |                                                              |   |   | 
|             |  |                                       |      |                                                              |   |   | 
|Net loss:    |  |                                       |      |                                                              |   |   | 
|Americas     |  | $                                     | (8.5 | )                                                            | $ |  | 
|Asia Pacific |  |                                       | 0.4  |                                                              |   |  | 
|             |  |                                       |      |                                                              |   |   | 
|             |  | $                                     | (8.1 | )                                                            | $ |  | 
|             |  |                                       |      |                                                              |   |   | 

35

---



Three months ended March
31, 2007 compared with the predecessor three months ended March 31, 2006. For
the three months ended March 31, 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 |     
|                                       |  |                    |     
|(in
  millions)                        |  | 3/31/07            |      | 3/31/06 |   | Change |  | % |      
|                                       |  |                    |     
|Revenues:                              |  |                    |      |         |   |        |  |   |       |   |  |         |  
|Summit                                 |  | $                  | 46.1 |         | $ |       |  | $ | 46.1  |   |  |         |  
|FMI                                    |  |                    |     |         |   | 27.9   |  |   | (27.9 | ) |  |         |  
|TUG                                    |  |                    |     |         |   | 16.5   |  |   | (16.5 | ) |  |         |  
|                                       |  |                    |      |         |   |        |  |   |       |   |  |         |  
|                                       |  |                    | 46.1 |         |   | 44.4   |  |   | 1.7   |   |  | 3.9     | %
|Revenues less direct expenses:         |  |                    |      |         |   |        |  |   |       |   |  |         |  
|Summit                                 |  |                    | 6.3  |         |   |       |  |   | 6.3   |   |  |         |  
|FMI                                    |  |                    |     |         |   | 6.8    |  |   | (6.8  | ) |  |         |  
|TUG                                    |  |                    |     |         |   | 1.6    |  |   | (1.6  | ) |  |         |  
|                                       |  |                    |      |         |   |        |  |   |       |   |  |         |  
|                                       |  |                    | 6.3  |         |   | 8.4    |  |   | (2.1  | ) |  | -24.8   | %
|Selling,
  general and administrative: |  |                    |      |         |   |        |  |   |       |   |  |         |  
|Summit                                 |  |                    | 8.6  |         |   |       |  |   | 8.6   |   |  |         |  
|FMI                                    |  |                    |     |         |   | 3.2    |  |   | (3.2  | ) |  |         |  
|TUG                                    |  |                    |     |         |   | 1.3    |  |   | (1.3  | ) |  |         |  
|                                       |  |                    |      |         |   |        |  |   |       |   |  |         |  
|                                       |  |                    | 8.6  |         |   | 4.5    |  |   | 4.1   |   |  | 93.0    | %
|Depreciation
  and amortization:       |  |                    |      |         |   |        |  |   |       |   |  |         |  
|Summit                                 |  |                    | 1.7  |         |   |       |  |   | 1.7   |   |  |         |  
|FMI                                    |  |                    |     |         |   | 1.0    |  |   | (1.0  | ) |  |         |  
|TUG                                    |  |                    |     |         |   |       |  |   |      |   |  |         |  
|                                       |  |                    |      |         |   |        |  |   |       |   |  |         |  
|                                       |  |                    | 1.7  |         |   | 1.0    |  |   | 0.7   |   |  | 60.7    | %
|Facility
  shutdown and other costs    |  |                    |      |         |   |        |  |   |       |   |  |         |  
|Summit                                 |  |                    |     |         |   |       |  |   |      |   |  |         |  
|FMI                                    |  |                    |     |         |   | 0.1    |  |   | (0.1  | ) |  |         |  
|TUG                                    |  |                    |     |         |   |       |  |   |      |   |  |         |  
|                                       |  |                    |      |         |   |        |  |   |       |   |  |         |  
|                                       |  |                    |     |         |   | 0.1    |  |   | (0.1  | ) |  | -100.0  | %
|Interest
  expense:                    |  |                    |      |         |   |        |  |   |       |   |  |         |  
|Summit                                 |  |                    | 4.9  |         |   |       |  |   | 4.9   |   |  |         |  
|FMI                                    |  |                    |     |         |   | 1.4    |  |   | (1.4  | ) |  |         |  
|TUG                                    |  |                    |     |         |   |       |  |   |      |   |  |         |  
|                                       |  |                    |      |         |   |        |  |   |       |   |  |         |  
|                                       |  |                    | 4.9  |         |   | 1.4    |  |   | 3.5   |   |  | 257.2   | %
|Registration
  rights expense:         |  |                    |      |         |   |        |  |   |       |   |  |         |  
|Summit                                 |  |                    | 3.0  |         |   |       |  |   | 3.0   |   |  |         |  
|FMI                                    |  |                    |     |         |   |       |  |   |      |   |  |         |  
|TUG                                    |  |                    |     |         |   |       |  |   |      |   |  |         |  
|                                       |  |                    |      |         |   |        |  |   |       |   |  |         |  
|                                       |  |                    | 3.0  |         |   |       |  |   | 3.0   |   |  | 100.0   | %
|Other income
  (expense)               |  |                    |      |         |   |        |  |   |       |   |  |         |  
|Summit                                 |  |                    | 1.9  |         |   |       |  |   | 1.9   |   |  |         |  
|FMI                                    |  |                    |     |         |   |       |  |   |      |   |  |         |  
|TUG                                    |  |                    |     |         |   |       |  |   |      |   |  |         |  
|                                       |  |                    |      |         |   |        |  |   |       |   |  |         |  
|                                       |  |                    | 1.9  |         |   |       |  |   | 1.9   |   |  | 100.0   | %
|Income for (benefit) provision         |  |                    |      |         |   |        |  |   |       |   |  |         |  
|Summit                                 |  |                    | (1.9 | )       |   |       |  |   | (1.9  | ) |  |         |  
|FMI                                    |  |                    |     |         |   | 0.1    |  |   | (0.1  | ) |  |         |  
|TUG                                    |  |                    |     |         |   |       |  |   |      |   |  |         |  
|                                       |  |                    |      |         |   |        |  |   |       |   |  |         |  
|                                       |  |                    | (1.9 | )       |   | 0.1    |  |   | (2.0  | ) |  | -2049.9 | %
|Net loss                               |  |                    |      |         |   |        |  |   |       |   |  |         |  
|Summit                                 |  |                    | (8.1 | )       |   |       |  |   | (8.1  | ) |  |         |  
|FMI                                    |  |                    |     |         |   | 1.0    |  |   | (1.0  | ) |  |         |  
|TUG                                    |  |                    |     |         |   | 0.3    |  |   | (0.3  | ) |  |         |  
|                                       |  |                    |      |         |   |        |  |   |       |   |  |         |  
|                                       |  | $                  | (8.1 | )       | $ | 1.3    |  | $ | (9.4  | ) |  | -705.0  | %

36

---



|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-------------------------------------------- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Revenues                                    
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                             |  | SUMMIT-Revenues
  of $46.1 million for the quarter ended March 31, 2007 is due to the
  consolidated operations of Summit Global Logistics Inc. and Subsidiaries. The
  amount includes the revenues of AmeRussia Shipping Co. Inc., FMI and TUG of
  $0.7 million, $24.6 million and $20.8 million, respectively.                                                                                                                                                                                                                                                                           
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                             |  | FMI- Revenues were $27.9 million for the
  quarter ended March 31, 2006. On November 8, 2006, FMI was acquired by
  Maritime, a subsidiary of Summit. On a comparative basis, revenues for the
  quarter ended March 31, 2007 decreased by $3.3 million or 11.8%. This
  decrease is due to the loss of warehouse accounts decreasing the revenue
  handling.                                                                                                                                                                                                                                
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                             |  | TUG-
  Revenues were $16.5 million for the quarter ended March 31, 2006. On November
  8, 2006, TUG was acquired by Maritime, a subsidiary of Summit. On a
  comparative basis, revenues for the quarter ended March 31, 2007 increased by
  $4.3 million or 26.4%. 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.                         
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Revenues less direct expenses (Gross profit)
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                             |  | SUMMIT-Gross
  profit of $6.3 million for the quarter ended March 31, 2007 is due to the
  consolidated operations of Summit Global Logistics, Inc. and Subsidiaries.
  The amount includes the gross profits of AmeRussia Shipping Co. Inc., FMI and
  TUG of $0.2 million, $3.9 million and $2.2 million, respectively.                                                                                                                                                                                                                                                                    
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                             |  | FMI-Gross
  profit was $6.8 million for the quarter ended March 31, 2006. On a
  comparative basis, gross profits for the quarter ended March 31, 2007
  decreased by $2.9 million or 43.1%. On a comparative basis, gross profit as a
  percent of revenue decreased from 24.3% in the quarter ended March 31, 2006
  compared to 15.7% for the quarter ended March 31, 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 $1.6 million for the quarter ended March 31, 2006. On a
  comparative basis, gross profits for the quarter ended March 31, 2007
  increased by $0.6 million or 39.7%; and gross profit as a percent of revenue
  increased from 9.8% to 10.8%. 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.                       
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Selling, general and administrative expenses
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                             |  | SUMMIT-
  Selling, general and administrative (SG&A) expenses of $8.6 million for
  the quarter ended March 31, 2007 is due to the consolidated operations of
  Summit Global Logistics, Inc. and Subsidiaries. The amount includes the
  SG&A of AmeRussia Shipping Co. Inc., FMI, TUG and Seamaster of $0.3
  million, $2.9 million, $1.6 million and $0.2 million, respectively. Summit
  SG&A of $3.6 million include approximately $0.5 million of nonrecurring
  expenses, principally professional and filing fees related to the
  registration process and financing negotiations.
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                             |  | FMI - SG&A were $3.2 million for the
  quarter ended March 31, 2006. On a comparative basis, SG&A for the
  quarter ended March 31, 2007 decreased by $0.3 million or 8.3%.                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                             |  | TUG - SG&A were $1.3 million for the
  quarter ended March 31, 2006. On a comparative basis, SG&A for the
  quarter ended March 31, 2007 increased by $0.4 million or 29.2% The increase
  was primarily driven by an increase in staff and other cost to service its
  business expansion into the United States East and Gulf coasts.                                                                                                                                                                                                                                                     

37

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|                                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--------------------------------- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Depreciation and amortization    
|                                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                  |  | SUMMIT  Depreciation and amortization
  expenses of $1.7 million for the quarter ended March 31, 2007 is due to the
  consolidated operations of Summit Global Logistics Inc. and Subsidiaries. The
  amount includes the depreciation and amortization of FMI and TUG of , $1.5
  million and $0.2 million, respectively.                                                                                                                
|                                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                  |  | FMI  Depreciation and amortization
  expenses were $1 million for the quarter ended March 31, 2006. On a
  comparative basis, depreciation and amortization expenses for the quarter
  ended March 31, 2007 increased by $0.4 million or 40.4%. This increase is
  primarily due to amortization of revalued intangible assets adjusted to its
  fair value at the date of the acquisition in November 8, 2006.                           
|                                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Facility shutdown and other costs
|                                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                  |  | FMI  Facility shutdown and other costs
  were $0.1 million for the quarter ended March 31, 2006. The 2006 amount
  represents trailing cost related to a facility shutdown in 2004.                                                                                                                                                                                                                                                       
|                                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Interest expense                 
|                                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                  |  | SUMMIT  Interest expense of $4.9
  million for the quarter ended March 31, 2007 is principally due to the senior
  secured credit facility obtained and the convertible notes issued to finance
  acquisitions on November 8, 2006.                                                                                                                                                                                                       
|                                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                  |  | FMI  Interest expense was $1.4 million
  for the quarter ended March 31, 2006. On a comparative basis, interest
  expense for the quarter ended March 31, 2007 decreased by $1.3 million or
  95.1%. The credit facility of FMI was fully paid at the date of their merger
  with Summit.                                                                                                                                                 
|                                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Registration rights expense      
|                                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                  |  | SUMMIT  Registration rights expense of
  $3.0 million for the quarter ended March 31, 2007 is due to the failure to
  meet the registration provision with the convertible note holders and the
  private placement common stock purchasers.                                                                                                                                                                                              
|                                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Other income (expense)           
|                                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                  |  | SUMMIT  Other income of $1.9 million is
  principally due to the change in fair value of derivative instruments of $1.8
  million and interest income. Our derivative instruments include embedded
  discounts on convertible notes and warrants.                                                                                                                                                                                         
|                                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Income tax (benefit) provision   
|                                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                  |  | SUMMIT - Income tax benefit of $1.9
  million for the quarter ended March 31, 2007 is 20.2% 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.                                                                                                                                                 
|                                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                  |  | FMI - Income tax provision was $0.1
  million for the quarter ended March 31, 2006. This is 7.1% of income before
  income tax provision. The effective tax rate differs from the statutory
  federal income tax rate of 34% because FMI was primarily taxed as a pass
  through entity (S Corporation) and, accordingly, the income taxes related to
  the operations prior to its acquisition were primarily paid by the equity
  owners.

38

---



|                  |   |                                                                                                                                                                                                                                                                                                                                             
|----------------- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Net income (loss)
|                  |   |                                                                                                                                                                                                                                                                                                                                             
|                  |  | SUMMIT - Net loss of $8.1 million for
  the quarter ended March 31, 2007 is principally caused by nonrecurring
  SG&A expenses of $0.5 million relating to the registration process and
  debt negotiations, interest expense of $4.7 million and registration right
  expense of $3.0 million.                                             
|                  |   |                                                                                                                                                                                                                                                                                                                                             
|                  |  | FMI - Net income was $1.0 million for
  the quarter ended March 31, 2006. On a comparative basis, net income for the
  quarter ended March 31, 2007 decreased by $1.8 million.. This decrease was
  primarily caused by decreased revenues offset by decreased interest expense.                                                            
|                  |   |                                                                                                                                                                                                                                                                                                                                             
|                  |  | TUG - Net income was $0.3 million for
  the quarter ended March 31, 2006. On a comparative basis, net income for the
  quarter ended March 31, 2007 increased by $0.1 million. This increase was
  primarily caused by business expansion into the United States East and Gulf
  coasts offset by increased costs related to the expansion.

Liquidity and Capital Resources

As of March
31, 2007, we had cash and cash equivalents of approximately $8.5 million. We
entered into a forbearance agreement with our senior lenders relating to our
failure to meet certain reporting and non-financial covenants in our senior
secured credit facility and our failure to meet certain financial covenants
contained in our senior secured credit agreement for the first quarter of 2007.

On May 21,
2007, we reached an agreement on the terms of the amendment and restructuring
of our senior secured credit facility, convertible notes and warrants. See
Contractual Obligations. The amendment to our credit facilities provides us
with additional working capital of approximately $12.5 million, after
restructuring costs, which we consider to be sufficient capital to meet our
planned operations for the year ended December 31, 2007.

We anticipate
that our capital expenditures for 2007 will be approximately $1.0 million,
comprised of the replacement of current warehouse equipment, additional office
equipment, leasehold improvements, and information technology. We believe that
funds generated from operations and funds from our new financing agreements will
provide sufficient liquidity to meet our working capital requirements through
December 31, 2007 based on our current plans.

We base our
assessment on the following assumptions:



| |   |                                                                                                                                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | our business
  will generate sufficient operating cash flow;                                                                                                                             
| |   |                                                                                                                                                                                          
| |  | the
  capital expenditures associated with our businesses will be modest;                                                                                                                
| |   |                                                                                                                                                                                          
| |  | all
  significant short-term capital expenditures, working capital requirements and
  debt amortization will be funded with cash on hand, and the financing from
  our credit facilities.

We are
dependent on the ongoing support of our lenders. We will require additional
working capital in the future to fund our growth. We believe we will 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 the financings limit our ability to raise more
debt or capital. See Contractual Obligations -Senior Credit Facility for more
information.

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

39

---



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 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.

Our Annual
Report on Form 10K/A for the year ended December 31, 2006 includes a discussion
on the critical accounting policies and estimates that we use in the
preparation of our consolidated financial statements. There were no significant
changes in our critical accounting policies and estimates during the three
months ended March 31, 2007.

40

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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 of the operating companies as of March 31, 2007:

|                                    |  |                        |             |                    |   |            |  |           |            |                     |   |             |  |   |           | 
|----------------------------------- |  | ---------------------- | ----------- | ------------------ | - | ---------- |  | --------- | ---------- | ------------------- | - | ----------- |  | - | --------- | 
|                                    |  | Payments due by period |            
|                                    |  |                        |             |                    |   |            |  |           |           
|                                    |  | Total                  |             | Less than
  1 year |   | 1-3 years  |  | 3-5 years |            | More than 5
  years |  
|                                    |  |                        |             |                    |   |            |  |           |            |                     |  
|                                    |  |                        |             |                    |   |            |  |           |            |                     |   |             |  |   |           | 
|Long-term-debt                      |  | $                      | 53,000,000  |                    | $ | 6,000,000  |  | $         | 16,000,000 |                     | $ | 31,000,000  |  | $ |          | 
|                                    |  |                        |             |                    |   |            |  |           |            |                     |   |             |  |   |           | 
|Interest on
  long-term debt        |  |                        | 17,108,000  |                    |   | 5,125,000  |  |           | 8,000,000  |                     |   | 3,983,000   |  |   |          | 
|                                    |  |                        |             |                    |   |            |  |           |            |                     |   |             |  |   |           | 
|Capital
  leases                    |  |                        | 1,752,106   |                    |   | 868,897    |  |           | 883,209    |                     |   |            |  |   |          | 
|                                    |  |                        |             |                    |   |            |  |           |            |                     |   |             |  |   |           | 
|Interest on
  capital leases        |  |                        | 177,762     |                    |   | 97,212     |  |           | 80,550     |                     |   |            |  |   |          | 
|                                    |  |                        |             |                    |   |            |  |           |            |                     |   |             |  |   |           | 
|Operating
  leases                  |  |                        | 63,980,000  |                    |   | 16,432,000 |  |           | 26,321,000 |                     |   | 16,390,000  |  |   | 4,837,000 | 
|                                    |  |                        |             |                    |   |            |  |           |            |                     |   |             |  |   |           | 
|Purchase
  Obligations              |  |                        |            |                    |   |           |  |           |           |                     |   |            |  |   |          | 
|                                    |  |                        |             |                    |   |            |  |           |            |                     |   |             |  |   |           | 
|Accrued
  registration rights       |  |                        | 3,000,000   |                    |   | 3,000,000  |  |           |           |                     |   |            |  |   |          | 
|                                    |  |                        |             |                    |   |            |  |           |            |                     |   |             |  |   |           | 
|Convertible
  notes and other loans |  |                        | 74,133,879  |                    |   |           |  |           |           |                     |   | 74,133,879  |  |   |          | 
|                                    |  |                        |             |                    |   |            |  |           |            |                     |   |             |  |   |           | 
|                                    |  |                        |             |                    |   |            |  |           |            |                     |   |             |  |   |           | 
|                                    |  | $                      | 213,151,747 |                    | $ | 31,523,109 |  | $         | 51,284,759 |                     | $ | 125,506,879 |  | $ | 4,837,000 | 
|                                    |  |                        |             |                    |   |            |  |           |            |                     |   |             |  |   |           | 

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, the applicable margin
shall be 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

41

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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.

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 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 $25,000, 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
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 will contain 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. As of November 8, 2007 we may use up to
$20.0 million of the cash proceeds from the issuance or sale of common equity
to prepay the term loans under the senior credit facility and such prepayment
will not be subject to a prepayment fee.

The deferred
financing cost in connection with the senior secured credit facility amounted
to approximately $6,194,000. 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

42

---



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 pay the senior secured creditor $265,000, 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 financial
statements are delivered to 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,
except at their discretion.

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
are 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 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 and pursuant to which we assumed the Maritime Logistics obligations
under the securities purchase agreement and consummated the note financing.

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 applicable margin shall be 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:

43

---



|                             |  |                    
|---------------------------- |  | -------------------
|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 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 therefrom; (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 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 accrued 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 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.

44

---



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, whereby
we agree 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 thereunder. If we do not satisfy
our obligations under the registration rights agreement, we are obligated to
pay the holders of the notes and warrants substantial penalty payments. See
Registration Rights Agreement.

Restructured to
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 anytime 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
          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.
        In exchange for $2 million of new convertible notes (as
            described below), the holders of the convertible notes waived their
            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
            (classified in the unaudited condensed balance sheet as of March
            31, 2007 as accrued registration rights expense). The agreement calls
            for 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.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|New Convertible Notes.On May 21, 2007,
          the Company amended and restated the senior secured convertible notes
          to increase the principal amount of the notes by $12.5 million of new
          convertible notes, default interest and a $2 million fee (as discussed
          above), and 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 restructuring warrants, to
          the holders of the existing notes, to raise working capital. The Company
          sold $2.5 million of additional convertible notes and warrants (exercisable
          for up to 50% of the number of shares of common stock issuable upon
          conversion of the notes), on substantially the same terms, to the management
          of the Company. The Company can issue up to $2.0 million of additional
          convertible notes and warrants (exercisable for up to 50% of the number
          of shares of common stock issuable upon conversion of the notes), to
          certain professionals of the Company in satisfaction of fees owed to
          such professionals. The new secured 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 new warrants, which are exercisable until November
          8, 2011 at an initial exercise price equal to $5.50 per share (subject
          to adjustment).                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

45

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|The new 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 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 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 to common stock of the Company.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|The debt issuance cost at the date of issuance
          of the restructured convertible notes and the new notes amounted to
          approximately $2,577,000. An aggregate default interest payment of
          $400,833 in connection with a failure to deliver timely the quarterly
          financial statements of the Company at year-end 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.                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|The Company may redeem all or any portion
          of the restructured convertible notes and the new notes on or after
          the third anniversary of the issuance of the restructuring convertible
          notes or new 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, 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|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 March 31,
          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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

Contingent Payments

Please refer
to our Form 10-K/A filed on April 18, 2007.

46

---



Recent Accounting Pronouncements

In February
2007, the Financial Accounting Standards Board (FASB) issued FASB Statement No.
159, The Fair Value Option for Financial Assets and Financial Liabilities -
Including an amendment of FASB Statement No. 115 (SFAS 159). SFAS 159, which
becomes effective for the company on January 1, 2008, permits companies to choose
to measure many financial instruments and certain other items at fair value and
report unrealized gains and losses in earnings. Such accounting is optional and
is generally to be applied instrument by instrument. The Company does not
anticipate that election, if any, of this fair-value option will have a
material effect on its consolidated financial condition, results of operations,
cash flows or disclosures.

In October
2006, the FASB issued FSP No. 123(R)-5, Amendment of FSP FAS 123(R)-1, (FSP
FAS123(R)-5) to address whether a change to an equity instrument in connection
with an equity restructuring should be considered a modification for the
purpose of applying FSP No. FAS 123(R)-1, Classification and Measurement of
Freestanding Financial Instruments Originally Issued in Exchange for Employee
Services under FAS Statement No 123(R) (FSP FAS123(R)-1). FSP FAS 123(R)-1
states that financial instruments issued to employees in exchange for past or
future services are subject to the provisions of FAS 123(R) unless the terms of
the award are modified when the holder is no longer an employee. In FSP FAS
123(R)-5, the FASB staff concluded that changes to the terms of an award that
are made solely due to an equity restructuring are not considered modifications
as described in FSP FAS 123(R)-1 unless the fair value of the award increases,
anti-dilution provisions are added, or holders of the same class of equity
instruments are treated unequally. FSP FAS 123(R)-5 is effective for the first
reporting period beginning after October 10, 2006. The adoption of FSP FAS
123(R)-5 did not have a material impact on the Companys unaudited condensed
consolidated financial statements.

47

---



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 increase our interest
expense by $1.3 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 table shown in the
Senior Credit Facility section of 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 table shown in Item 2. Contractual
Obligations and section of 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
during this period.

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 customers credit
worthiness, or other matters affecting the collectibility 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 March 31, 2007,
approximately 13.6% of accounts receivable were due from one customer. For the
three months ended March 31, 2007, approximately 15.6% of revenues was
generated from one customer, Jones Apparel Group, Inc.

48

---



ITEM 4. Control 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 first quarter of the fiscal year ended 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
the 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, including a
statement as to whether or not our internal control over financial reporting is
effective. In order to achieve compliance with Section 404 within the
prescribed period, management will commence a Section 404 compliance project
under which management will adopt 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.

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.

49

---



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

There have
been no material 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.

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

None.

Item 3. DEFAULTS UPON SENIOR SECURITIES

None.

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

None.

Item 5. OTHER INFORMATION

None.

Item 6. EXHIBITS Exhibits

See Index to
Exhibits, below. List exhibits referenced are incorporated by reference to the
location indicated.

50

---



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: May
  21, 2007 | By:                             | /s/ Robert
  Agresti                   
|                     |                                 |                                        
|                     |                                 | Robert
  Agresti                       
|                     |                                 | President
  and Chief Executive Officer
|                     |                                 |                                        
|Date: May
  21, 2007 | By:                             | /s/ Paul
  Shahbazian                  
|                     |                                 |                                        
|                     |                                 | Paul
  Shahbazian                      
|                     |                                 | Chief
  Financial Officer              

51

---



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)
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|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)                                                                                                                                                                                                                                                                                             

52

---



|      |  |                                                                                                                                                                                                                                                                                                                                   
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |  |                                                                                                                                                                                                                                                                                                                                   
|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)                                                                                                                                                                                        

53

---



|      |  |                                                                                                                                                                                                                                                                                                                                                    
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |  |                                                                                                                                                                                                                                                                                                                                                    
|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 July 20, 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)                                                                                                                                                                                                                    

54

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|      |  |                                                                                                                                                             
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------
|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 September 19, 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) 
|      |  |                                                                                                                                                             
|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            
|      |  |                                                                                                                                                             
|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           
|      |  |                                                                                                                                                             
|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

(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) These certifications are
being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 and are not being filed as part this Quarterly Report on Form 10-Q or as a
separate disclosure document.

55

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