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UNITED STATESSECURITIES AND EXCHANGE COMMISSION
WASHINGTON, 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 June 30, 2007

OR

|  |                                                                                             
|- | --------------------------------------------------------------------------------------------
|o | QUARTERLY REPORT PURSUANT TO SECTION 13 OR
 15(D) OF THE SECURITIES AND EXCHANGE ACT OF 1934

For the transition period from _______ to _________

Commission File Number: 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                    |  | (I.R.S. Employer      
|incorporation or organization)                     |  | Identification Number)
|                                                   |  |                       
|One Meadowlands Plaza, East Rutherford, New Jersey |  | 07073                 
|(Address of principal executive offices)           |  | (Zip Code)            

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

Indicate by
check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to the filing
requirements for the past 90 days.

Yes xNo 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 oNo x

The number of
shares of the registrants common stock, $0.001 par value per share,
outstanding on August 20, 2007 was 7,594,958.

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SUMMIT
GLOBAL LOGISTICS, INC.

FORM 10-Q

INDEX

|              |  |                                                                                                                                                                                                                                                                                                                                                                                                               |    |         
|------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -- | --------
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                               |    | PAGE NO.
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                               |    |         
|PART I. -     |  | FINANCIAL INFORMATION                                                                                                                                                                                                                                                                                                                                                                                         |    | 1       
|ITEM 1.       |  | Financial Statements                                                                                                                                                                                                                                                                                                                                                                                          |    | 1       
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                               |    |         
|              |  | SUMMIT GLOBAL LOGISTICS, INC. AND
 SUBSIDIARIES                                                                                                                                                                                                                                                                                                                                                               |    |         
|              |  | Condensed Consolidated Balance
Sheets as of
 June 30, 2007 (Unaudited) and December 31, 2006                                                                                                                                                                                                                                                                                                                  |    | 2       
|              |  | Condensed Consolidated Statements of
 Operations (Unaudited) for the three and six months ended June 30, 2007 and
 for the three months ended June 30, 2006 and for the period February 6, 2006
 (date of inception) to June 30, 2006                                                                                                                                                                         |    | 3       
|              |  | Condensed
      Consolidated Statement of Stockholders Equity and Comprehensive Loss
      (Unaudited) for the three and six months ended June 30, 2007                                                                                                                                                                                                                                                      |    | 4       
|              |  | Condensed Consolidated Statements of
Cash
 Flows (Unaudited) for the six months ended June 30, 2007 and for the period
 February 6, 2006 (date of inception) to June 30, 2006                                                                                                                                                                                                                                 |    | 5       
|              |  | Notes to Condensed Consolidated
Financial
 Statements (Unaudited)                                                                                                                                                                                                                                                                                                                                             |    | 7       
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                               |    |         
|              |  | Financial Statements  Predecessor Companies 
 (Our business combination on November 8, 2006, included the acquisitions of
 FMI Holdco I LLC and Subsidiary and TUG Logistics, Inc. and Affiliates, which
 are deemed predecessor companies since they were both similar in size
 relative to revenues and income, acquired with the same financing and equally
 significant to our consolidated operations.) |    |         
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                               |    |         
|              |  | FMI HOLDCO I LLC AND SUBSIDIARY                                                                                                                                                                                                                                                                                                                                                                               |    |         
|              |  | Condensed Consolidated Statement of
 Operations for the three and six months ended June 30, 2006 (Unaudited)                                                                                                                                                                                                                                                                                                  |    | 1       
|              |  | Condensed Consolidated Statement of
Cash
 Flows for the six months ended June 30, 2006 (Unaudited)                                                                                                                                                                                                                                                                                                            |    | 2       
|              |  | Notes to Condensed Consolidated
Statements
 of Operations and Cash Flows (Unaudited)                                                                                                                                                                                                                                                                                                                          |    | 3       
|              |  | TUG LOGISTICS, INC. AND
AFFILIATES                                                                                                                                                                                                                                                                                                                                                                            |    |         
|              |  | Condensed Combined Statement of
Operations
 for the three and six months ended June 30, 2006 (Unaudited)                                                                                                                                                                                                                                                                                                      |    | 1       
|              |  | Condensed Combined Statement of Cash
Flows
 for the six months ended June 30, 2006 (Unaudited)                                                                                                                                                                                                                                                                                                                |    | 2       
|              |  | Notes
      to Condensed Combined Statements of
 Operations and Cash Flows (Unaudited)                                                                                                                                                                                                                                                                                                                        |    | 3       
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                               |    |         
|ITEM 2.       |  | Managements Discussion and Analysis of
 Financial Condition and Results of Operations                                                                                                                                                                                                                                                                                                                        |    | 1       
|ITEM 3.       |  | Quantitative and Qualitative Disclosure
 About Market Risk                                                                                                                                                                                                                                                                                                                                                    |    | 22      
|ITEM 4.       |  | Controls and Procedures                                                                                                                                                                                                                                                                                                                                                                                       |    | 23      
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                               |    |         
|PART II -     |  | OTHER INFORMATION                                                                                                                                                                                                                                                                                                                                                                                             |    | 24      
|ITEM 1.       |  | Legal proceedings                                                                                                                                                                                                                                                                                                                                                                                             |    | 24      
|ITEM 1A.      |  | Risk Factors                                                                                                                                                                                                                                                                                                                                                                                                  |    | 24      
|ITEM 2.       |  | Unregistered Sales of Equity Securities and
 Use of Proceeds                                                                                                                                                                                                                                                                                                                                                  |    | 25      
|ITEM 3.       |  | Defaults Upon Senior Securities                                                                                                                                                                                                                                                                                                                                                                               |    | 25      
|ITEM 4.       |  | Submission of Matters to a Vote of Security
 Holders                                                                                                                                                                                                                                                                                                                                                          |    | 26      
|ITEM 5.       |  | Other Information                                                                                                                                                                                                                                                                                                                                                                                             |    | 26      
|ITEM 6.       |  | Exhibits                                                                                                                                                                                                                                                                                                                                                                                                      |    | 26      
|Signatures    |  |                                                                                                                                                                                                                                                                                                                                                                                                               | 27
|Exhibit index |  | 28                                                                                                                                                                                                                                                                                                                                                                                                           

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PART I. FINANCIAL INFORMATIONItem 1. Financial statements

SUMMIT GLOBAL
LOGISTICS, INC. AND SUBSIDIARIES

CONDENSED
CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

|                                                                                                                                      |  |                            |         |                  |   |         | 
|------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------- | ------- | ---------------- | - | ------- | 
|                                                                                                                                      |  | June 30, 2007
 (Unaudited) |         | December 31,2006 |  
|                                                                                                                                      |  |                            |         |                  |  
|ASSETS                                                                                                                                |  |                            |         |                  |  
|Current assets:                                                                                                                       |  |                            |         |                  |   |         | 
|Cash and cash equivalents, including restricted cash
of $3,424 and
 $4,038 as of June 30, 2007 and December 31, 2006, respectively    |  | $                          | 13,360  |                  | $ | 15,768  | 
|Accounts receivable, net of allowance for doubtful
accounts of $691
 and $613 as of June 30, 2007 and December 31, 2006, respectively |  |                            | 35,084  |                  |   | 25,721  | 
|Prepaid expenses and other current assets                                                                                             |  |                            | 4,770   |                  |   | 5,126   | 
|Deferred tax assets                                                                                                                   |  |                            | 77      |                  |   | 77      | 
|                                                                                                                                      |  |                            |         |                  |   |         | 
|Total current assets                                                                                                                  |  |                            | 53,291  |                  |   | 46,692  | 
|                                                                                                                                      |  |                            |         |                  |   |         | 
|                                                                                                                                     
|Property and equipment, net                                                                                                           |  |                            | 11,954  |                  |   | 10,373  | 
|Deferred financing costs, net of accumulated amortization of $1,901
 and $466 as of June 30, 2007 and December 31, 2006, respectively |  |                            | 14,465  |                  |   | 13,323  | 
|Intangible assets, net                                                                                                                |  |                            | 40,457  |                  |   | 41,732  | 
|Goodwill                                                                                                                              |  |                            | 92,661  |                  |   | 94,081  | 
|Security deposits and other assets                                                                                                    |  |                            | 853     |                  |   | 1,092   | 
|                                                                                                                                      |  |                            |         |                  |   |         | 
|Total
 assets                                                                                                                         |  | $                          | 213,681 |                  | $ | 207,293 | 
|                                                                                                                                      |  |                            |         |                  |   |         | 

See accompanying notes to the condensed
consolidated financial statements.

1

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SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(CONTINUED)

(IN THOUSANDS, EXCEPT PER SHARE DATA)

|                                                                                                                |  |                            |         |                    |   |         |  
|--------------------------------------------------------------------------------------------------------------- |  | -------------------------- | ------- | ------------------ | - | ------- | -
|                                                                                                                |  | June 30, 2007
 (Unaudited) |         | December 31,
 2006 |  
|                                                                                                                |  |                            |         |                    |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                            |  |                            |         |                    |   |         |  
|Current liabilities:                                                                                            |  |                            |         |                    |   |         |  
|Accounts payable and accrued expenses                                                                           |  | $                          | 26,101  |                    | $ | 19,337  |  
|Current portion of senior secured credit
facility                                                               |  |                            | 7,000   |                    |   | 5,000   |  
|Current portion of capital lease
obligations                                                                    |  |                            | 843     |                    |   | 801     |  
|Due to related parties                                                                                          |  |                            |        |                    |   | 844     |  
|                                                                                                                |  |                            |         |                    |   |         |  
|Total current liabilities                                                                                       |  |                            | 33,944  |                    |   | 25,982  |  
|                                                                                                                |  |                            |         |                    |   |         |  
|                                                                                                               
|Long-term liabilities:                                                                                          |  |                            |         |                    |   |         |  
|Senior secured credit facility                                                                                  |  |                            | 45,000  |                    |   | 49,000  |  
|Convertible notes                                                                                               |  |                            | 54,279  |                    |   | 41,486  |  
|Fair value of derivative instruments                                                                            |  |                            | 41,045  |                    |   | 32,148  |  
|Capital lease obligations                                                                                       |  |                            | 663     |                    |   | 845     |  
|Deferred tax liabilities                                                                                        |  |                            | 5,629   |                    |   | 11,162  |  
|Loan payable, related party                                                                                     |  |                            | 2,000   |                    |   | 2,000   |  
|Other liabilities                                                                                               |  |                            | 80      |                    |   |        |  
|                                                                                                                |  |                            |         |                    |   |         |  
|Total long-term liabilities                                                                                     |  |                            | 148,696 |                    |   | 136,641 |  
|                                                                                                                |  |                            |         |                    |   |         |  
|Total liabilities                                                                                               |  |                            | 182,640 |                    |   | 162,623 |  
|                                                                                                                |  |                            |         |                    |   |         |  
|                                                                                                               
|Commitments and
 contingencies                                                                                  |  |                            |         |                    |   |         |  
|                                                                                                               
|Stockholders equity:                                                                                           |  |                            |         |                    |   |         |  
|Preferred stock, par value $0.001 per share 1,000
authorized shares,
 none issued and outstanding               |  |                            |        |                    |   |        |  
|Common stock, par value $0.001 per share 99,000
authorized shares
 shares issued and outstanding - 7,595 shares |  |                            | 7       |                    |   | 7       |  
|Additional paid-in capital                                                                                      |  |                            | 46,683  |                    |   | 45,509  |  
|Subscriptions receivable                                                                                        |  |                            | (10     | )                  |   | (10     | )
|Noncontrolling interest in
 variable interest entity                                                            |  |                            | 1,163   |                    |   |        |  
|Accumulated other
 comprehensive income                                                                         |  |                            | 87      |                    |   |        |  
|Accumulated deficit                                                                                             |  |                            | (16,889 | )                  |   | (836    | )
|                                                                                                                |  |                            |         |                    |   |         |  
|Total stockholders equity                                                                                      |  |                            | 31,041  |                    |   | 44,670  |  
|                                                                                                                |  |                            |         |                    |   |         |  
|Total liabilities and stockholders equity                                                                      |  | $                          | 213,681 |                    | $ | 207,293 |  
|                                                                                                                |  |                            |         |                    |   |         |  

See accompanying notes to the condensed
consolidated financial statements.

2

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SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(UNAUDITED)

(IN THOUSANDS, EXCEPT PER SHARE DATA)

|                                                                                                                                                                   |  |                             |         |                                  |   |                                                         |   |   |         |   |   |      |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | --------------------------- | ------- | -------------------------------- | - | ------------------------------------------------------- | - | - | ------- | - | - | ---- | -
|                                                                                                                                                                   |  | Three Months Ended June 30, |         | Six Months
 Ended
 June 30, 2007 |   | February 6, 2006
 (date of inception)
 to June 30, 2006 |  
|                                                                                                                                                                   |  |                             |         |                                  |  
|                                                                                                                                                                   |  | 2007                        |         | 2006                             |   |                                                         |  
|                                                                                                                                                                   |  |                             |         |                                  |   |                                                         |   |   |        
|Revenues:                                                                                                                                                          |  |                             |         |                                  |   |                                                         |   |   |         |   |   |      |  
|Air and ocean freight services                                                                                                                                     |  | $                           | 44,363  |                                  | $ |                                                        |   | $ | 65,838  |   | $ |     |  
|Logistics services                                                                                                                                                 |  |                             | 24,739  |                                  |   | 520                                                     |   |   | 49,328  |   |   | 520  |  
|                                                                                                                                                                   |  |                             |         |                                  |   |                                                         |   |   |         |   |   |      |  
|Total revenues                                                                                                                                                     |  |                             | 69,102  |                                  |   | 520                                                     |   |   | 115,166 |   |   | 520  |  
|                                                                                                                                                                   |  |                             |         |                                  |   |                                                         |   |   |         |   |   |      |  
|                                                                                                                                                                  
|Direct expenses:                                                                                                                                                   |  |                             |         |                                  |   |                                                         |   |   |         |   |   |      |  
|Air and ocean freight services                                                                                                                                     |  |                             | 40,110  |                                  |   |                                                        |   |   | 59,128  |   |   |     |  
|Logistics services                                                                                                                                                 |  |                             | 20,447  |                                  |   | 418                                                     |   |   | 41,172  |   |   | 418  |  
|                                                                                                                                                                   |  |                             |         |                                  |   |                                                         |   |   |         |   |   |      |  
|Total direct expenses                                                                                                                                              |  |                             | 60,557  |                                  |   | 418                                                     |   |   | 100,300 |   |   | 418  |  
|                                                                                                                                                                   |  |                             |         |                                  |   |                                                         |   |   |         |   |   |      |  
|Revenues less direct expenses                                                                                                                                      |  |                             | 8,545   |                                  |   | 102                                                     |   |   | 14,866  |   |   | 102  |  
|                                                                                                                                                                   |  |                             |         |                                  |   |                                                         |   |   |         |   |   |      |  
|                                                                                                                                                                  
|Operating expenses:                                                                                                                                                |  |                             |         |                                  |   |                                                         |   |   |         |   |   |      |  
|General and administrative expense (including
stock-based
 compensation expense of $193 and $1,254 for the three and six months ended
 June 30, 2007, respectively |  |                             | 10,333  |                                  |   | 234                                                     |   |   | 18,966  |   |   | 234  |  
|                                                                                                                                                                   |  |                             |         |                                  |   |                                                         |   |   |         |   |   |      |  
|Depreciation and amortization                                                                                                                                      |  |                             | 1,927   |                                  |   | 3                                                       |   |   | 3,630   |   |   | 3    |  
|                                                                                                                                                                   |  |                             |         |                                  |   |                                                         |   |   |         |   |   |      |  
|Total operating expenses                                                                                                                                           |  |                             | 12,260  |                                  |   | 237                                                     |   |   | 22,596  |   |   | 237  |  
|                                                                                                                                                                   |  |                             |         |                                  |   |                                                         |   |   |         |   |   |      |  
|                                                                                                                                                                   |  |                             |         |                                  |   |                                                         |   |   |         |   |   |      |  
|Loss from operations                                                                                                                                               |  |                             | (3,715  | )                                |   | (135                                                    | ) |   | (7,730  | ) |   | (135 | )
|                                                                                                                                                                   |  |                             |         |                                  |   |                                                         |   |   |         |   |   |      |  
|Other income (expense):                                                                                                                                            |  |                             |         |                                  |   |                                                         |   |   |         |   |   |      |  
|Interest income                                                                                                                                                    |  |                             | 52      |                                  |   |                                                        |   |   | 187     |   |   |     |  
|Interest expense                                                                                                                                                   |  |                             | (5,983  | )                                |   | (5                                                      | ) |   | (10,195 | ) |   | (5   | )
|Amortization of deferred finance charges                                                                                                                           |  |                             | (747    | )                                |   |                                                        |   |   | (1,435  | ) |   |     |  
|(Loss) gain on derivative instruments                                                                                                                              |  |                             | (1,662  | )                                |   |                                                        |   |   | 140     |   |   |     |  
|Registration rights expense                                                                                                                                        |  |                             |        |                                  |   |                                                        |   |   | (3,000  | ) |   |     |  
|                                                                                                                                                                   |  |                             |         |                                  |   |                                                         |   |   |         |   |   |      |  
|Loss before income tax benefit                                                                                                                                     |  |                             | (12,055 | )                                |   | (140                                                    | ) |   | (22,033 | ) |   | (140 | )
|                                                                                                                                                                   |  |                             |         |                                  |   |                                                         |   |   |         |   |   |      |  
|Income tax benefit                                                                                                                                                 |  |                             | (3,317  | )                                |   |                                                        |   |   | (5,217  | ) |   |     |  
|                                                                                                                                                                   |  |                             |         |                                  |   |                                                         |   |   |         |   |   |      |  
|                                                                                                                                                                   |  |                             |         |                                  |   |                                                         |   |   |         |   |   |      |  
|Net loss                                                                                                                                                           |  | $                           | (8,738  | )                                | $ | (140                                                    | ) | $ | (16,816 | ) | $ | (140 | )
|                                                                                                                                                                   |  |                             |         |                                  |   |                                                         |   |   |         |   |   |      |  
|                                                                                                                                                                   |  |                             |         |                                  |   |                                                         |   |   |         |   |   |      |  
|Weighted average common shares outstanding, basic and diluted (in
 thousands)                                                                                      |  |                             | 7,595   |                                  |   |                                                         |   |   | 7,595   |   |   |      |  
|                                                                                                                                                                   |  |                             |         |                                  |   |                                                         |   |   |         |   |   |      |  
|                                                                                                                                                                   |  |                             |         |                                  |   |                                                         |   |   |         |   |   |      |  
|Loss per common share, basic and diluted                                                                                                                           |  | $                           | (1.15   | )                                |   |                                                         |   | $ | (2.21   | ) |   |      |  
|                                                                                                                                                                   |  |                             |         |                                  |   |                                                         |   |   |         |   |   |      |  

See accompanying notes to the condensed
consolidated financial statements.

3

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

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

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

(IN
THOUSANDS)

|                                                                                             |  |              |       |        |   |   |  |                              |        |                          |   |                                  |   |                                           |       |                      |   |       |  |   |         |   |   |        |  
|-------------------------------------------------------------------------------------------- |  | ------------ | ----- | ------ | - | - |  | ---------------------------- | ------ | ------------------------ | - | -------------------------------- | - | ----------------------------------------- | ----- | -------------------- | - | ----- |  | - | ------- | - | - | ------ | -
|                                                                                             |  |              |       |        |   |   |  | Additional
 paid-in
 capital |        | Subscription
 Receivable |   | Noncontrolling
 Interest in
 VIE |   | Accumulated
 Other
 Comprehensive
 Income |       | Accumulated
 Deficit |   | Total | 
|                                                                                             |  | Common
stock |       |        |   |   |  |                              |       
|                                                                                             |  |              |       |        |   |   |  |                              |       
|                                                                                             |  | Shares       |       | Amount |   |   |  |                              |        |                          |  
|                                                                                             |  |              |       |        |   |   |  |                              |        |                          |   |                                  |   |                                           |       |                      |  
|Balance as of
December 31, 2006                                                              |  |              | 7,595 |        | $ | 7 |  | $                            | 45,509 |                          | $ | (10                              | ) |                                           |      |                      | $ |      |  | $ | (836    | ) | $ | 44,670 |  
|                                                                                            
|Stock
options                                                                                |  |              |       |        |   |   |  |                              | 546    |                          |   |                                  |   |                                           |       |                      |   |       |  |   |         |   |   | 546    |  
|Restricted
shares                                                                            |  |              |       |        |   |   |  |                              | 169    |                          |   |                                  |   |                                           |       |                      |   |       |  |   |         |   |   | 169    |  
|                                                                                            
|Cumulative
effect for change in accounting principle in accounting for
 registration payment |  |              |       |        |   |   |  |                              |        |                          |   |                                  |   |                                           |       |                      |   |       |  |   | 763     |   |   | 763    |  
|                                                                                            
|Net loss three
months ended March 31, 2007                                                   |  |              |       |        |   |   |  |                              |        |                          |   |                                  |   |                                           |       |                      |   |       |  |   | (8,078  | ) |   | (8,078 | )
|                                                                                             |  |              |       |        |   |   |  |                              |        |                          |   |                                  |   |                                           |       |                      |   |       |  |   |         |   |   |        |  
|Balance as of
March 31, 2007                                                                 |  |              | 7,595 |        |   | 7 |  |                              | 46,224 |                          |   | (10                              | ) |                                           |      |                      |   |      |  |   | (8,151  | ) |   | 38,070 |  
|                                                                                            
|Consolidation
of variable interest entity                                                    |  |              |       |        |   |   |  |                              |        |                          |   |                                  |   |                                           | 1,163 |                      |   |       |  |   |         |   |   | 1,163  |  
|                                                                                            
|Stock
options                                                                                |  |              |       |        |   |   |  |                              | 352    |                          |   |                                  |   |                                           |       |                      |   |       |  |   |         |   |   | 352    |  
|Restricted
shares                                                                            |  |              |       |        |   |   |  |                              | 107    |                          |   |                                  |   |                                           |       |                      |   |       |  |   |         |   |   | 107    |  
|                                                                                             |  |              |       |        |   |   |  |                              |        |                          |   |                                  |   |                                           |       |                      |   |       |  |   |         |   |   |        |  
|Net loss for
three months ended June 30, 2007                                                |  |              |       |        |   |   |  |                              |        |                          |   |                                  |   |                                           |       |                      |   |       |  |   | (8,738  | ) |   | (8,738 | )
|                                                                                            
|Foreign
currency translation adjustment                                                      |  |              |       |        |   |   |  |                              |        |                          |   |                                  |   |                                           |       |                      |   | 87    |  |   |         |   |   | 87     |  
|                                                                                             |  |              |       |        |   |   |  |                              |        |                          |   |                                  |   |                                           |       |                      |   |       |  |   |         |   |   |        |  
|Comprehensive
 loss                                                                          |  |              |       |        |   |   |  |                              |        |                          |   |                                  |   |                                           |       |                      |   |       |  |   |         |   |   | (8,651 | )
|                                                                                             |  |              |       |        |   |   |  |                              |        |                          |   |                                  |   |                                           |       |                      |   |       |  |   |         |   |   |        |  
|Balance as of
June 30, 2007                                                                  |  |              | 7,595 |        | $ | 7 |  | $                            | 46,683 |                          | $ | (10                              | ) | $                                         | 1,163 |                      | $ | 87    |  | $ | (16,889 | ) | $ | 31,041 |  
|                                                                                             |  |              |       |        |   |   |  |                              |        |                          |   |                                  |   |                                           |       |                      |   |       |  |   |         |   |   |        |  

See
accompanying notes to the condensed
consolidated financial statements.

4

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS 
(UNAUDITED)

(IN THOUSANDS)

|                                                                             |  |                                  |         |                                                         |   |      |  
|---------------------------------------------------------------------------- |  | -------------------------------- | ------- | ------------------------------------------------------- | - | ---- | -
|                                                                             |  | Six Months
 Ended
 June 30, 2007 |         | February 6, 2006
 (date of inception)
 to June 30, 2006 |  
|                                                                             |  |                                  |         |                                                         |  
|Cash flows from operating activities:                                        |  |                                  |         |                                                         |   |      |  
|Net loss                                                                     |  | $                                | (16,816 | )                                                       | $ | (140 | )
|Adjustments to reconcile net loss to net cash used in operating
 activities: |  |                                  |         |                                                         |   |      |  
|Provision for doubtful accounts                                              |  |                                  | 78      |                                                         |   |     |  
|Depreciation and amortization of property and equipment                      |  |                                  | 935     |                                                         |   | 3    |  
|Amortization of deferred financing costs                                     |  |                                  | 1,435   |                                                         |   |     |  
|Amortization of intangible assets                                            |  |                                  | 2,695   |                                                         |   |     |  
|Amortization of discount on convertible debt                                 |  |                                  | 3,480   |                                                         |   |     |  
|Stock-based compensation expense                                             |  |                                  | 1,254   |                                                         |   |     |  
|Gain on derivative instruments                                               |  |                                  | (140    | )                                                       |   |     |  
|Registration rights expense converted into notes                             |  |                                  | 3,000   |                                                         |   |     |  
|Deferred income taxes                                                        |  |                                  | (5,533  | )                                                       |   |     |  
|Accrued interest expense converted into notes                                |  |                                  | 400     |                                                         |   |      |  
|Increase (decrease) in cash resulting from changes in:                       |  |                                  |         |                                                         |   |      |  
|Accounts receivable                                                          |  |                                  | (8,726  | )                                                       |   | (45  | )
|Prepaid expenses and other current assets                                    |  |                                  | 1,546   |                                                         |   | (11  | )
|Accounts payable and accrued expenses                                        |  |                                  | 5,569   |                                                         |   | 103  |  
|                                                                             |  |                                  |         |                                                         |   |      |  
|Net
 cash used in operating activities:                                      |  |                                  | (10,823 | )                                                       |   | (90  | )
|                                                                             |  |                                  |         |                                                         |   |      |  
|                                                                            
|Cash flows from investing activities:                                        |  |                                  |         |                                                         |   |      |  
|Cash included in variable interest entity                                    |  |                                  | 416     |                                                         |   |     |  
|Acquisition of
    subsidiary                                                |  |                                  |        |                                                         |   | (500 | )
|Cash included
    in acquisition of subsidiary                               |  |                                  |        |                                                         |   | 99   |  
|Purchase of property and equipment                                           |  |                                  | (2,079  | )                                                       |   | (29  | )
|Security deposits and other assets                                           |  |                                  | 239     |                                                         |   |     |  
|                                                                             |  |                                  |         |                                                         |   |      |  
|Net cash used in investing activities                                        |  |                                  | (1,424  | )                                                       |   | (430 | )
|                                                                             |  |                                  |         |                                                         |   |      |  

See accompanying notes to the condensed
consolidated financial statements.

5

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS 
(UNAUDITED)

(IN THOUSANDS)

|                                                                 |  |                                  |        |                                                         |   |     | 
|---------------------------------------------------------------- |  | -------------------------------- | ------ | ------------------------------------------------------- | - | --- | 
|                                                                 |  | Six Months
 Ended
 June 30, 2007 |        | February 6, 2006
 (date of inception)
 to June 30, 2006 |  
|                                                                 |  |                                  |        |                                                         |  
|Cash flows from financing activities:                            |  |                                  |        |                                                         |   |     | 
|Proceeds from issuance of convertible notes                      |  | $                                | 15,000 |                                                         | $ |    | 
|Repayment of borrowings under the senior secured credit
facility |  |                                  | (2,000 | )                                                       |   |    | 
|Transaction costs                                                |  |                                  | (1,865 | )                                                       |   |    | 
|Repayment of capital lease obligations                           |  |                                  | (483   | )                                                       |   |    | 
|Proceeds from loan payable, other                                |  |                                  |       |                                                         |   | 350 | 
|Proceeds from issuance of common stock                           |  |                                  |       |                                                         |   | 267 | 
|(Repayment) proceeds of loan payable, related party              |  |                                  | (844   | )                                                       |   | 23  | 
|                                                                 |  |                                  |        |                                                         |   |     | 
|Net cash provided by financing activities                        |  |                                  | 9,808  |                                                         |   | 640 | 
|                                                                 |  |                                  |        |                                                         |   |     | 
|Effects of foreign currency translation on cash                  |  |                                  | 31     |                                                         |   |    | 
|                                                                 |  |                                  |        |                                                         |   |     | 
|Net (decrease) increase in cash and cash equivalents             |  |                                  | (2,408 | )                                                       |   | 120 | 
|Cash and cash equivalents, beginning of period                   |  |                                  | 15,768 |                                                         |   |    | 
|                                                                 |  |                                  |        |                                                         |   |     | 
|Cash and cash equivalents, end of period                         |  | $                                | 13,360 |                                                         | $ | 120 | 
|                                                                 |  |                                  |        |                                                         |   |     | 
|                                                                
|Supplemental disclosures of cash flow information:               |  |                                  |        |                                                         |   |     | 
|Cash paid during the period for:                                 |  |                                  |        |                                                         |   |     | 
|Interest                                                         |  | $                                | 5,664  |                                                         | $ |    | 
|Income taxes                                                     |  |                                  | 450    |                                                         |   |    | 
|Noncash investing and financing activities:                      |  |                                  |        |                                                         |   |     | 
|Property and equipment acquired under capital leases             |  | $                                | 343    |                                                         | $ |    | 
|Consolidation of variable interest entity                        |  |                                  | 1,163  |                                                         |   |    | 
|Transaction costs
    converted into notes                       |  |                                  | 712    |                                                         |   |    | 
|Common stock issued in settlement of financing costs             |  |                                  |       |                                                         |   | 60  | 
|Due to seller for acquisition of subsidiary                      |  |                                  |       |                                                         |   | 250 | 
|Subscription receivable                                          |  |                                  |       |                                                         |   | 95  | 
|Acquisition costs included in accounts payable                   |  |                                  |       |                                                         |   | 15  | 
|Dividends payable                                                |  |                                  |       |                                                         |   | 150 | 

See accompanying notes to the condensed
consolidated financial statements.

6

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
(UNAUDITED)

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

7

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(UNAUDITED)

FMI Holdco I
LLC and its wholly-owned subsidiary, FMI International LLC, are based in New
Jersey and were founded in 1979. FMI International LLCs wholly-owned
subsidiaries are FMI Express Corp., FMI Trucking, Inc., FMI International
Corp., FMI International Corp. (West), and Fashion Marketing, Inc.
Collectively, these companies are referred to as FMI. FMI is a full-service
logistics and supply chain management service provider to the retail industry.
FMI offers ocean and air freight forwarding; local trucking services in the New
York and Los Angeles metropolitan markets; line haul truck load services
throughout the continental 48 states of the United States of America; and
warehousing, consolidation, distribution and marketing services in the New
York, Los Angeles and Miami markets.

TUG USA, Inc.
which acquired certain of the assets of the TUG Logistics group of companies
and all of the equity interests of Clare Freight Los Angeles Inc. and TUG New
York, Inc. (collectively TUG) operates as a non-asset based ocean
transportation intermediary focused on imports and exports between the United
States and Asia. TUG provides logistics services through its subsidiaries in
the United States. TUG provides ocean, air, supply chain logistics, warehouse
and distribution and customs brokerage services to its customers, as well as a
full range of ocean transportation intermediary services, forwarding containers
between Asia and the United States using multiple carriers. TUG is a
Non-Vessel-Operating Common Carrier (NVOCC).

In December
2006, the provincial authority in Shanghai in the Peoples Republic of China
(PRC) approved the establishment of Seamaster Logistics (Shanghai)
Ltd., a wholly-foreign-owned enterprise, or WFOE, under newly adopted rules in
the PRC permitting foreign corporations to own and operate companies in the PRC.
The approval was subject to the WFOE obtaining a business license from the Shanghai
provincial authority, which was received in January 2007. During 2007, through
our WFOE, we established offices at major transportation centers in the PRC.
SLI, our subsidiary, has an exclusive agency agreement with Seamaster Logistics
(China) Ltd., a Chinese company, (Seamaster China). We may acquire
the Shanghai office of Seamaster China. Seamaster China has a Class A license
as an international freight forwarding agent in Shanghai. The Company believes
that Seamaster China is a variable interest entity (VIE). Under Financial
Accounting Standards Board Interpretation No. 46 (revised December 2003),
Consolidation of Variable Interest Entities (FIN 46R), Seamaster
China is consolidated in the financial statements effective April 1, 2007.

Basis of Presentation

The accompanying
unaudited condensed consolidated financial statements of Summit Global
Logistics, Inc. and Subsidiaries have been prepared in accordance with
accounting principles generally accepted in the United States of America
(GAAP) for interim financial information and the instructions to
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include
all of the information and footnotes required by GAAP for complete financial
statements. These unaudited condensed consolidated financial statements and notes
should be read in conjunction with the audited consolidated financial statements
and notes included in our Form 10-K/A for the year ended December 31, 2006. In
managements opinion, these unaudited condensed consolidated financial statements
reflect all adjustments (consisting of only normal, recurring accruals)
necessary for the fair presentation of our unaudited condensed consolidated
financial position as of June 30, 2007, and the unaudited condensed
consolidated statements of operations for the three months ended June 30, 2007
and 2006, and the statements of operations and cash flows for the six months
ended June 30, 2007 and for the period February 6, 2006 (date of inception) to
June 30, 2006, and the unaudited condensed consolidated statements of stockholders equity
and comprehensive income for the period from January 1, 2007 to June 30, 2007.

8

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(UNAUDITED)

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

|                                       |  |   |                                            |  |   |                                          | 
|-------------------------------------- |  | - | ------------------------------------------ |  | - | ---------------------------------------- | 
|                                       |  |   | Three Months EndedJune 30, 2007(Unaudited) |  |   | Six Months EndedJune 30, 2007(Unaudited) | 
|                                       |  |   |                                            |  |  
|Total
 revenues                        |  | $ | 10,499                                     |  | $ | 11,609                                   | 
|Net profit                             |  |   | 80                                         |  |   | 53                                       | 
|                                      
|Total assets
 as of end of period      |  | $ | 5,825                                      |  | $ | 5,825                                    | 
|Total
 liabilities as of end of period |  |   | 4,552                                      |  |   | 4,552                                    | 
|Total equity                           |  |   | 1,273                                      |  |   | 1,273                                    | 

The unaudited
condensed consolidated results of operations for the three and six months ended
June 30, 2007 are not necessarily indicative of the results to be expected for
the year ending December 31, 2007.

These
unaudited condensed consolidated financial statements reflect the financial
position, results of operations and cash flows of Summit Global Logistics Inc.
and its subsidiary Maritime Logistics US Holdings Inc. and its subsidiaries,
TUG USA, Inc., Summit Logistics International, Inc., AMR Investment Inc.,
Seamaster Logistics Inc. and subsidiary, FMI Holdco I LLC, and their
subsidiaries, and Seamaster Logistics (China) Ltd., our VIE, (collectively, the
Company).

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Revenue Recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Air and Ocean Freight Services.Revenue is
 recognized at the time of shipment. The Company recognizes revenue on air and
 ocean freight services on a gross basis, in accordance with Emerging Issues
 Task Force (EITF) 99-19, Reporting Revenue Gross versus Net,
 as a result of the following: the Company is the primary obligor responsible
 for providing the service desired by its customer and is responsible for
 fulfillment, including the acceptability of the services ordered by the
 customer. The Company, at its sole discretion, sets the prices charged to its
 customers, and is not required to obtain approval or consent from any other
 party in establishing its prices. The Company has multiple suppliers for the
 services it provides its customers and has the absolute and complete
 discretion and right to select the supplier that best serves our customer
 needs. In most cases, the Company determines the nature, type,
 characteristics, and specifications of the services ordered by the customer.
 The Company also assumes credit risk for the amount billed to the customer.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Customs Brokerage. Revenue is recognized
 when the necessary documentation for customs clearance has been completed.
 This revenue is generated by the fees charged for providing customs brokerage
 services. Reimbursement for the disbursements made on behalf of a customer
 (principally custom duty) is recorded as a reduction of expenses incurred in
 accordance with EITF 01-14, Income Statement Characterization of
 Reimbursements Received for Out-of-Pocket Expenses Incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

9

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(UNAUDITED)

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

Use of Estimates


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


Property and Equipment


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


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

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

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

Convertible Notes


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


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

10

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS 
(UNAUDITED)

Derivatives


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


Stock-Based Incentive Plans


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


Income Taxes


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


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.)


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

11

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(UNAUDITED)

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

Variable Interest Entities


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


Foreign Currency Translation


The Companys
foreign subsidiaries and our VIEs functional currency has been translated into
U.S. dollars in accordance with SFAS No. 52, Foreign Currency Translation.
All assets and liabilities have been translated using the exchange rate in
effect at the balance sheet date. Unaudited condensed consolidated statement of
operations amounts have been translated using the average exchange rate for the
period. Adjustments from such translation included in accumulated other
comprehensive income amount to $87 and none for the three months ended June 30,
2007 and 2006, respectively, and $87 and none for the six months ended June 30,
2007 and for the period from February 6, 2006 (date of inception) to June 30,
2006, respectively.


(Loss) Earnings Per Share


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


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

|                                                         |  |          |        |      |  |   | 
|-------------------------------------------------------- |  | -------- | ------ | ---- |  | - | 
|                                                         |  | June 30, |       
|                                                         |  |          |       
|                                                         |  | 2007     |        | 2006 | 
|                                                         |  |          |        |      | 
|Options                                                  |  |          | 1,175  |      |  |  | 
|Warrants                                                 |  |          | 6,864  |      |  |  | 
|Shares to be
 issued upon conversion of convertible debt |  |          | 15,293 |      |  |  | 
|                                                         |  |          |        |      |  |   | 
|Total number of stock equivalents                        |  |          | 23,332 |      |  |  | 
|                                                         |  |          |        |      |  |   | 

12

---



SUMMIT
GLOBAL LOGISTICS, INC. AND SUBSIDIARIES

NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | Recently Issued Accounting
 Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | In June 2007, the Financial Accounting Standards
 Board (FASB) ratified the consensus on Emerging Issues Task Force (EITF)
 Issue No. 06-11, Accounting for Income Tax Benefits of Dividends on
 Share-Based Payment Awards (EITF 06-11). EITF 06-11 requires companies to
 recognize the income tax benefit realized from dividends or dividend equivalents
 that are charged to retained earnings and paid to employees for non-vested
 equity-classified employee share-based payment awards as an increase to
 additional paid-in capital. EITF 06-11 is effective for fiscal years
 beginning after September 15, 2007 (fiscal year 2008 for the Company).
 The adoption is not expected to have a material impact on our consolidated
 financial statements.                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|3. | PRO FORMA FINANCIAL INFORMATION
 (UNAUDITED)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The following table sets forth the unaudited pro
 forma results of operations of the Company for the three and six months ended
 June 30, 2006. The unaudited pro forma financial information summarizes the
 results of operations for the three and six months ended June 30, 2006 as if
 the business combinations in 2006 had occurred as of January 1, 2006. The pro
 forma information contains the actual operating results of the consolidated
 companies, with the results adjusted to include the proforma impact of
 incremental expenses, incremental amortization of acquired intangible assets,
     incremental interest expense, and provision for income taxes. The Company
    has included the unaudited proforma condensed consolidated results of operations
 of FMI Holdco I, LLC and Subsidiary, Tug Logistics, Inc. and Affiliates and
 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 period
 presented or that may be obtained in the future.

Proforma
Financial Information (Unaudited)

| |                                                      |  |                                    |        |                                  |   |        |  
| | ---------------------------------------------------- |  | ---------------------------------- | ------ | -------------------------------- | - | ------ | -
| |                                                      |  | Three
 Months Ended
 June 30, 2006 |        | Six Months
 Ended
 June 30, 2006 |  
| |                                                      |  |                                    |        |                                  |  
| | Total revenues                                       |  | $                                  | 49,269 |                                  | $ | 94,254 |  
| | Total direct expenses                                |  |                                    | 41,427 |                                  |   | 77,882 |  
| |                                                      |  |                                    |        |                                  |   |        |  
| | Revenues less direct expenses                        |  |                                    | 7,842  |                                  |   | 16,372 |  
| | Total operating expenses                             |  |                                    | 5,821  |                                  |   | 13,329 |  
| |                                                      |  |                                    |        |                                  |   |        |  
| | Income from operations                               |  |                                    | 2,021  |                                  |   | 3,043  |  
| |                                                      |  |                                    |        |                                  |   |        |  
| | Interest expense, net, finance charges and bank fees |  |                                    | (1,342 | )                                |   | (5,995 | )
| |                                                      |  |                                    |        |                                  |   |        |  
| | Income (loss) before income tax provision (benefit)  |  |                                    | 679    |                                  |   | (2,952 | )
| | Income tax provision (benefit)                       |  |                                    | 271    |                                  |   | (1,181 | )
| |                                                      |  |                                    |        |                                  |   |        |  
| | Net income (loss)                                    |  | $                                  | 408    |                                  | $ | (1,771 | )
| |                                                      |  |                                    |        |                                  |   |        |  

13

---



SUMMIT
GLOBAL LOGISTICS, INC. AND SUBSIDIARIES

NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

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

| |                                                   |  |                             |        |                    |   |        |  
| | ------------------------------------------------- |  | --------------------------- | ------ | ------------------ | - | ------ | -
| |                                                   |  | June 30,
 2007
 (Unaudited) |        | December
 31, 2006 |  
| |                                                   |  |                             |        |                    |  
| | Office, computer and
 communication equipment     |  | $                           | 2,928  |                    | $ | 1,165  |  
| | Transportation equipment                          |  |                             | 635    |                    |   | 421    |  
| | Warehouse and terminal
 equipment                 |  |                             | 8,397  |                    |   | 8,412  |  
| | Leasehold improvements                            |  |                             | 1,103  |                    |   | 685    |  
| | Construction in progess                           |  |                             | 108    |                    |   | 18     |  
| |                                                   |  |                             |        |                    |   |        |  
| |                                                   |  |                             | 13,171 |                    |   | 10,701 |  
| | Less - Accumulated
 depreciation and amortization |  |                             | (1,217 | )                  |   | (328   | )
| |                                                   |  |                             |        |                    |   |        |  
| | Net book value of property
 and equipment         |  | $                           | 11,954 |                    | $ | 10,373 |  
| |                                                   |  |                             |        |                    |   |        |  

| |                                                                                                                                                                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Depreciation and amortization expense was $535 and
 $3 for the three months ended June 30, 2007 and 2006, respectively, and $935
 and $3 for the six months ended June 30, 2007 and for the period from
 February 6, 2006 (date of inception) to June 30, 2006, respectively.
| |                                                                                                                                                                                                                                                                              
| | The changes in capital leases included in property
 and equipment are:                                                                                                                                                                                                       

| |                                         |  |                                               |       |                    |   |       |  
| | --------------------------------------- |  | --------------------------------------------- | ----- | ------------------ | - | ----- | -
| |                                         |  | Six months
 ended
 June 30, 2007
 (Unaudited) |       | December
 31, 2006 |  
| |                                         |  |                                               |       |                    |  
| | Capital leases, beginning
 of period    |  | $                                             | 1,922 |                    |   |       |  
| | Assets acquired through
 capital leases |  |                                               | 343   |                    |   |       |  
| |                                         |  |                                               |       |                    |   |       |  
| | Capital leases, end of
 period          |  |                                               | 2,265 |                    | $ | 1,922 |  
| | Less - accumulated
 depreciation        |  |                                               | (366  | )                  |   | (97   | )
| |                                         |  |                                               |       |                    |   |       |  
| | Net book value of capital
 leases       |  | $                                             | 1,899 |                    | $ | 1,825 |  
| |                                         |  |                                               |       |                    |   |       |  

14

---



SUMMIT
GLOBAL LOGISTICS, INC. AND SUBSIDIARIES

NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

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

| |                          |  |                             |        |                    |   |        |  
| | ------------------------ |  | --------------------------- | ------ | ------------------ | - | ------ | -
| |                          |  | (IN
 THOUSANDS)             |       
| |                          |  |                             |       
| |                          |  | June 30,
 2007
 (Unaudited) |        | December
 31, 2006 |  
| |                          |  |                             |        |                    |  
| | Trademark                |  | $                           | 1,720  |                    | $ | 1,800  |  
| | Software and other       |  |                             | 3,300  |                    |   | 3,300  |  
| | Customer list            |  |                             | 39,000 |                    |   | 37,500 |  
| |                          |  |                             |        |                    |   |        |  
| |                          |  |                             | 44,020 |                    |   | 42,600 |  
| | Accumulated amortization |  |                             | (3,563 | )                  |   | (868   | )
| |                          |  |                             |        |                    |   |        |  
| | Net carrying value       |  | $                           | 40,457 |                    | $ | 41,732 |  
| |                          |  |                             |        |                    |   |        |  

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | Amortization expense was $1,392 and none for the
 three months ended June 30, 2007 and 2006, respectively, and $2,695 and none
 for the six months ended June 30, 2007 and for the period from February 6,
 2006 (date of inception) to June 30, 2006, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|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%.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Originally, applicable margins per annum on LIBOR rate loans
 range from 3.75% to 4.75% and for reference rate loans from 2.75%
 to 3.75% subject to the condition that the applicable margin will not be less
 than 4.25% during the period from November 8, 2006 until the financial
 statements are delivered to agent after the last day of the fourth full
 fiscal quarter after the effective date, as defined. Upon the occurrence and
 during the continuation of an event of default, the interest rate(s) then in
 effect with respect to the obligations under the senior secured credit
 facility will be increased by three percent per annum. The applicable margins
 were increased in connection with the restructuring described below under the
 caption Amendments.                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The term loans require quarterly principal payments
 plus an annual principal payment each year in an amount equal to fifty
 percent of excess cash flow, as defined, for the immediately preceding fiscal
 year. The excess cash flow payments shall be applied to the term loan, in
 inverse order of maturity. 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

15

---



SUMMIT
GLOBAL LOGISTICS, INC. AND SUBSIDIARIES

NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | The revolver unused line fee equals one-half of one
 percent (.50%) per annum payable monthly. The revolver includes a letter of
 credit line of up to an aggregate amount of $7 million. The letter of credit
 fee is 3% per annum payable monthly. The servicing fee equals $25
 payable quarterly in advance. In addition, early termination fees may apply
 ranging from 1% to 2% of the total loan commitment. The deferred financing
 cost in connection with the senior secured credit facility amounted to
 approximately $6,194.                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The senior secured credit facility is secured by a
 first priority security interest in substantially all of existing and future
 assets of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The credit facility contains affirmative and
 negative covenants, and financial covenants which include (a) minimum EBITDA
 (earnings before interest, taxes, depreciation and amortization), (b) maximum
 total senior debt to EBITDA ratio, (c) minimum fixed charge coverage ratio,
 (d) maximum capital expenditure, and (e) key man provisions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Amendments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | On May 21, 2007, in connection with the
 restructuring of the senior secured credit facility, the Company agreed to
 pay the senior secured creditor $265, increase the interest rate on the loan
 facilities, and modify the financial covenants and, in exchange, the lenders
 agreed that all declared events of default were waived. As part of
 restructuring the debt of the Company, the Company amended the senior secured
 credit facility to increase the applicable margins by 0.50%. Under the
 amended credit facility the applicable margins per annum on LIBOR rate loans
 now range from 3.75% to 5.25% and for reference rate loans from 2.75% to
 4.25% subject to the condition that the applicable margin will not be less
 than 5.25% during the period from May 21, 2007 until the consolidated
 financial statements are delivered to the agent after the last day of the
 fourth full fiscal quarter after the effective date, as defined.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | In addition, on and after May 21, 2007, as part of
 the restructuring of the debt of the Company, the Company agreed that the
 senior secured lenders have no obligation to make any revolving loans to the Company
 under the revolving loan facility, but they may do so at their discretion.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The Company failed to meet certain financial
 covenants contained in the amended senior secured credit agreement at June
 30, 2007. In August 2007, effective July 31, 2007, we obtained a limited
 waiver from the senior secured creditor. (See Note 15 - Subsequent Events)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|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 were originally convertible at the option of the holder
 into shares of the Companys common stock at an initial conversion price
 equal to $11.00 per share (subject to adjustment) and (ii) warrants to
 acquire in the aggregate up to 40% of the number of shares of common stock
 issuable upon conversion of the notes, exercisable until the fifth
 anniversary of November 8, 2006 at an original initial exercise price equal
 to $11.00 per share (subject to adjustment). The Conversion and exercise
 prices of the notes and warrants, respectively have been reduced in
 connection with the restructuring described below under the caption
 Amendments.                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The notes bear interest at a rate per annum equal to
 LIBOR plus the applicable margin then in effect. Originally, applicable margins
    per annum range from 2.75% to 3.75% subject to the condition that
    the applicable margin shall not be less than 3.25% during the period from
 November 8, 2006 until the financial statements are delivered to the
 applicable holder after the fourth full fiscal quarter after the issuance
 date. The debt issuance cost at the date of closing amounted to approximately
 $6,107. The applicable margins were increased in connection with the
 restructuring described below under the caption Amendments.                                                                                                                                                                                                                                                                                                    

16

---



SUMMIT
GLOBAL LOGISTICS, INC. AND SUBSIDIARIES

NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company may redeem all or any portion of the
 notes on or after the third anniversary of the issuance of the notes, if the
 closing sale price of our common stock is greater than 180% of the conversion
 price then in effect for each of the previous 20 trading days ending and
 certain other conditions are satisfied. A holder may require the Company to
 redeem the notes on an event of default or upon a change of control, in each
 case at a premium over the principal amount of the notes being redeemed. The
 premium in the event of a default is the greater of (x) the product of (i)
 the conversion amount to be redeemed together with accrued interest and
 unpaid interest and late charges, if any are incurred up to and including the
 conversion date, in respect of such conversion amount, and (ii) the
 Redemption Premium, as defined (ranging from 100% to 120%), or, (y) the
 product of (a) the closing sale price of the common stock on the date
 immediately preceding such event of default multiplied by (b) the number of
 shares of common stock into which the amount set forth in clause (x) would
 have converted. The premium in the event of a change of control is equal to a
 product of the amount of principal being redeemed multiplied by the greater
 of (a) the quotient of the closing sale price of our common stock immediately
 prior to the announcement of the change of control divided by the conversion
 price and (b) 120% in the first eighteen months, then 115% in the period from
 eighteen to forty-two months and 110% thereafter.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | The convertible notes are secured by substantially
 all of our assets and are subordinate to our senior secured credit facility.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | The inter-creditor agreement between our senior
 secured creditor and the convertible note holders prohibits the convertible
 note holders from receiving payments from the Company other than regularly scheduled
 principal and interest payments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Amendments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | On May 21, 2007, as part of restructuring of the
 Companys debt, the Company restructured the terms of the existing $65
 million of secured convertible notes and accompanying warrants. After the
 restructuring the convertible notes are now convertible at the option of the
 holder into shares of the Companys common stock at an initial conversion
 price equal to $5.50 per share (subject to adjustment) and the warrants are
 exercisable at any time prior to November 8, 2011 at an initial exercise
 price equal to $5.50 per share (subject to adjustment).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | The convertible notes bear interest at a rate per
 annum equal to LIBOR plus the applicable margin then in effect. As of May 21,
 2007, the applicable margins on the convertible notes range from 3.50% to
 4.50% per annum subject to the condition that the applicable margin shall not
 be less than 4.50% during the period from May 21, 2007 until the
 financial statements are delivered to the applicable holder after the fourth
 full fiscal quarter after November 8, 2006. Further, the interest payment for
 the five (5) consecutive calendar quarters on the convertible notes
 commencing with the quarter ended June 30, 2007 is not payable until the
 earlier of the maturity date, November 8, 2011, or the date on which the
 notes are converted to common stock of the Company. The holders of the 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | The agreement calls for the Company to file an
 amended registration statement with the Securities and Exchange Commission
 within 30 days of the date of the amendment and for the registration
 statement to become effective within 90 days from the date of filing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | In connection with the restructuring, the exercise
 price of the warrants was reduced from $11.00 to $5.50 per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | The Company failed to meet certain financial
 covenants contained in the convertible note documents at June 30, 2007. In
 August 2007, we obtained a limited waiver effective July 31, 2007, from the
 convertible note holders. (See Note 15 - Subsequent Events.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

17

---



SUMMIT
GLOBAL LOGISTICS, INC. AND SUBSIDIARIES

NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

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

18

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS 
(UNAUDITED)

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | Private Placement Notes. On May 21, 2007, in
 connection with the restructuring of the debt of the Company, a majority of
 the holders of the common stock of the Company agreed to waive certain
 penalties pursuant to the registration rights agreement relating to the
 Companys failure to cause certain shares of common stock and shares of
 common stock underlying warrants to become registered and extended the
 deadline for causing such shares to be registered, in exchange for all of the
 participants in the Companys prior private placement of common stock
 receiving pro rata unsecured convertible notes in the aggregate principal
 face amount of $1 million (classified in the unaudited condensed consolidated
 balance sheet as of June 30, 2007 as convertible notes).
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The
 unsecured convertible notes are convertible at the option of the holder into
 shares of the Companys common stock at an initial conversion price equal to
 $5.50 per share (subject to adjustment). There are no financial covenant
 requirements and there are only limited reporting requirements in conjunction
 with the unsecured convertible notes. Interest is payable at the same rate as
 the convertible notes.                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|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 15%.                                                                                                                                                                          
| |   |                                                                                                                                                                                                
| |  | 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%.                                                                                              
| |   |                                                                                                                                                                                                
| |  | Conversion
 pricing and exercise reset events occurring 10% of the time resulting in a
 weighted average conversion price of $5.467 and the warrant exercise price
 adjustment factor of 0.996.

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

|                                                           |  |                            |        |                   |   |        | 
|---------------------------------------------------------- |  | -------------------------- | ------ | ----------------- | - | ------ | 
|                                                           |  | June 30, 2007
 (Unaudited) |        | December 31, 2006 |  
|                                                           |  |                            |        |                   |  
|Compound embedded derivatives within the convertible notes |  | $                          | 27,323 |                   | $ | 17,162 | 
|Warrants attached to convertible notes                     |  |                            | 10,142 |                   |   | 7,747  | 
|Warrants attached to common shares                         |  |                            | 3,580  |                   |   | 7,239  | 
|                                                           |  |                            |        |                   |   |        | 
|                                                           |  | $                          | 41,045 |                   | $ | 32,148 | 
|                                                           |  |                            |        |                   |   |        | 

19

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(UNAUDITED)

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|9.  | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | As of
 December 31, 2006, the Company owed three shareholders a total of $844
 related to the acquisition and reimbursement of certain monies received on
 their behalf. This amount is reported as due to related parties on the
 consolidated balance sheet. These amounts were paid in full during the six months
 ended June 30, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | Pursuant to
 the purchase agreement to acquire SLHL, the seller was required to loan the
 Company $2,000. As of June 30, 2007, the seller has loaned the Company $2,000.
 The loan is noninterest-bearing and payable after five years. This amount is
 reported as loan payable, related party on the unaudited condensed
 consolidated balance sheet.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|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 was ($54) and
 none for the three months ended June 30, 2007 and 2006, respectively, and $46
 and none for the six months ended June 30, 2007 and for the period from
 February 6, 2006 (date of inception) to June 30, 2006, 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 June 30, 2007 is 1,634 shares. As of
 June 30, 2007, the Board of Directors have authorized the issuance of options
 to purchase 1,175 shares of common stock and the issuance of 234 shares of
 restricted stock under the 2006 Plan. As of June 30, 2007, the Company
 granted 667 SARs as additional compensation. These options and SARs have been
 granted with an exercise price equal to $10 per share. The options have a
 5-year term with full vesting ranging from two to three years. The issued
 restricted compensation shares are held in escrow and have an exercise price
 of $.001 per share with a vesting rate and period of fifty percent in the
 second year and fully vested in the third year. Stock-based compensation
 expense was $193 and none for the three months ended June 30, 2007 and 2006,
 respectively, and $1,254 and none for the six months ended June 30, 2007 and
 period from February 6, 2006 (date of inception) to June 30, 2006,
 respectively, and is included in general and administrative expenses.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | Stock options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | In April
 2007, the Board of Directors, on the recommendation of the Compensation
 Committee, approved an amendment of the Companys 2006 Equity Incentive Plan
 to increase by 250 the number of shares of the common stock of the Company
 issuable to employees and prospective employees under the plan. In May 2007,
 the Stockholders of the Company approved this amendment to the Companys 2006
 Equity Incentive Plan at the Companys Annual Meeting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

20

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(UNAUDITED)

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|12. | INCOME TAXES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | Effective
 January 1, 2007, the Company adopted FIN 48, and as of June 30, 2007, the
 Company does not have a liability for unrecognized tax benefits.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | The Company
 files income tax returns in the U.S. federal jurisdiction and various states.
 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 June 30, 2007, the Company has no
 accrued interest or penalties related to uncertain tax positions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | The income
 tax benefit effective tax rate differs from the statutory federal income tax
 rate of 34% due to permanent differences and state income taxes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|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 $4,539 and $15 for the three months
 ended June 30, 2007 and 2006, respectively, and $7,862 and $15 for the six
 months ended June 30, 2007 and for the period from February 6, 2006 (date of
 inception) to June 30, 2006, respectively. The amount of sublease income
 recorded as an offset to rental expense was $722 and none for the three
 months ended June 30 2007 and 2006, respectively, and $1,306 and none for the
 six months ended June 30, 2007 and for the period from February 6, 2006 (date
 of inception) to June 30, 2006, respectively.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | The Company
 has capital lease obligations with financial institutions, with monthly
 installments of principal, including interest at various rates ranging from
 4.3% to 12.1% through 2010, collateralized by equipment. As of June 30, 2007,
 future minimum lease payments required under noncancelable leases are as
 follows:                                                                                                                                                                                                                                                                                                                                                                                                                                         

|                                                    |  |   |                 |     |                   |        |        | 
|--------------------------------------------------- |  | - | --------------- | --- | ----------------- | ------ | ------ | 
|Year ending
 December 31,                           |  |   | Capital
 leases |     | Operating
 leases |       
|                                                    |  |   |                 |     |                   |       
|2007                                                |  |   | $               | 478 |                   | $      | 7,343  | 
|2008                                                |  |   |                 | 826 |                   |        | 13,526 | 
|2009                                                |  |   |                 | 284 |                   |        | 11,729 | 
|2010                                                |  |   |                 | 8   |                   |        | 9,410  | 
|2011                                                |  |   |                 |    |                   |        | 6,991  | 
|Thereafter                                          |  |   |                 |    |                   |        | 5,654  | 
|                                                    |  |   |                 |     |                   |        |        | 
|Total future minimun lease
 payments                |  |   | 1,596           |     | $                 | 54,653 |       
|                                                    |  |   |                 |     |                   |        |       
|Less - Amount representing
 interest                |  |   | (90             | )   |                   |        |       
|                                                    |  |   |                 |     |                   |        |       
|Present value of future
 net minimum lease payments |  | $ | 1,506           |     |                   |        |       
|                                                    |  |   |                 |     |                   |        |       

21

---



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. The Company recorded a liability of
 $3,000 based on the agreement signed on May 21, 2007 which is included in
 convertible debt. Based upon the May 21, 2007 agreement, the Companys  deadline
 for meeting its registration commitment is extended to September 18, 2007.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | The Company
 recorded a cumulative-effect adjustment to retained earnings for the change
 in accounting principle in the amount of $762, which accounts for the removal
 of the registration rights penalty from the compound embedded derivatives as
 of December 31, 2006 and adjusted the discount on the note based on the
 removal of the registration rights penalty from the discount.                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | 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 earnings 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Reserve for Insurance Losses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | The Company
 participates in a high deductible insurance program for certain insurable
 risks consisting primarily of automobile, workers compensation, general
 liability and health insurance. Based on estimates of the aggregate liability
 for claims incurred, a provision for the deductible portion of the claims is
 recorded and revised annually. These losses are collateralized by restricted
 cash balances and letters of credit.                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | Shipping Agreements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | The Company
 entered into agreements with unrelated ocean carriers for the Company to
 receive commission revenue based on certain minimum volume levels and to
 protect various ocean shipping rates for the duration of the contract. These
 agreements expire December 31, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

22

---



SUMMIT GLOBAL LOGISTICS, INC. AND
SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(UNAUDITED)

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|15. | SUBSEQUENT EVENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | In July
 2007, the Company announced a restructuring of SMI and the Trans-Atlantic
 logistics operation of AMR. The restructuring resulted in a termination of
 eleven employees including the Presidents of SMI and AMR. The Company expects
 to recognize a charge of approximately $700 in the third quarter of 2007 for
 severance cost and office closure expense.                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | In August
 2007, the Company obtained limited waivers for its failure to meet certain financial
 covenants at June 30, 2007 from its Senior Secured Creditor and Convertible
 Note Holders. In order to obtain the waiver, the Company has agreed to engage
 a financial advisor acceptable at the sole discretion of the Senior Secured
 Creditor. The financial advisor is responsible for obtaining additional equity
 and addressing other matters with respect to the financial restructuring of
 the Company. In addition, the Company has agreed with the Convertible Note
 Holders to change their existing quarterly financial covenants to the same
 monthly financial covenants currently in effect with the Senior Secured
 Creditors for July and August 2007.

23

---



Item I. Financial Statements - Predecessor
Companies

FMI HOLDCO I
LLC AND SUBSIDIARY

CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS 
(UNAUDITED)

(IN THOUSANDS)

|                                        |  |                                    |        |                                  |   |        |  
|--------------------------------------- |  | ---------------------------------- | ------ | -------------------------------- | - | ------ | -
|                                        |  | Three Months
 Ended
 June 30, 2006 |        | Six Months
 Ended
 June 30, 2006 |  
|                                        |  |                                    |        |                                  |  
|                                        |  |                                    |        |                                  |   |        |  
|Revenues                                |  | $                                  | 24,816 |                                  | $ | 52,710 |  
|                                        |  |                                    |        |                                  |   |        |  
|Expenses                                |  |                                    |        |                                  |   |        |  
|Direct expenses, excluding depreciation |  |                                    | 19,632 |                                  |   | 40,735 |  
|Facility shutdown and other costs       |  |                                    | 20     |                                  |   | 85     |  
|Depreciation and amortization           |  |                                    | 1,211  |                                  |   | 2,259  |  
|General and administrative              |  |                                    | 2,857  |                                  |   | 6,066  |  
|                                        |  |                                    |        |                                  |   |        |  
|                                        |  |                                    |        |                                  |   |        |  
|Income from operations                  |  |                                    | 1,096  |                                  |   | 3,565  |  
|                                        |  |                                    |        |                                  |   |        |  
|                                        |  |                                    |        |                                  |   |        |  
|Other income (expense)                  |  |                                    |        |                                  |   |        |  
|Interest income                         |  |                                    | 13     |                                  |   | 26     |  
|Interest expense and bank fees          |  |                                    | (1,482 | )                                |   | (2,869 | )
|                                        |  |                                    |        |                                  |   |        |  
|                                        |  |                                    |        |                                  |   |        |  
|                                        |  |                                    | (1,469 | )                                |   | (2,843 | )
|                                        |  |                                    |        |                                  |   |        |  
|                                        |  |                                    |        |                                  |   |        |  
|Income before income taxes              |  |                                    | (373   | )                                |   | 722    |  
|                                        |  |                                    |        |                                  |   |        |  
|Income taxes                            |  |                                    | 30     |                                  |   | 90     |  
|                                        |  |                                    |        |                                  |   |        |  
|                                        |  |                                    |        |                                  |   |        |  
|Net income                              |  | $                                  | (403   | )                                | $ | 632    |  
|                                        |  |                                    |        |                                  |   |        |  

See accompanying notes to Condensed
Consolidated Statement of Operations.

1

---



FMI HOLDCO I LLC AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS 
( UNAUDITED)

SIX MONTHS ENDED JUNE 30, 2006

(IN THOUSANDS)

|                                                                                  |  |   |        |  
|--------------------------------------------------------------------------------- |  | - | ------ | -
|Cash flows from operating activities                                              |  |   |        |  
|Net income                                                                        |  | $ | 632    |  
|Adjustments to reconcile net income to net cash
provided by operating
 activities |  |   |        |  
|Depreciation                                                                      |  |   | 875    |  
|Amortization of intangibles                                                       |  |   | 1,384  |  
|Changes in assets and liabilities                                                 |  |   |        |  
|Accounts receivable                                                               |  |   | 1,353  |  
|Prepaid expenses and other current assets                                         |  |   | (200   | )
|Deposits                                                                          |  |   | (90    | )
|Deferred rent                                                                     |  |   | (154   | )
|Accounts payable and accrued expenses                                             |  |   | (282   | )
|                                                                                  |  |   |        |  
|Net
 cash provided by operating activities                                        |  |   | 3,518  |  
|                                                                                  |  |   |        |  
|Cash flows from investing activities                                              |  |   |        |  
|Acquisition of property and equipment                                             |  |   | (434   | )
|                                                                                  |  |   |        |  
|Net
 cash used in investing activities                                            |  |   | (434   | )
|                                                                                  |  |   |        |  
|Cash flows from financing activities                                              |  |   |        |  
|Repayment of long-term debt and capital lease
obligations                         |  |   | (2,338 | )
|Prepayment of senior debt pursuant to excess cash
flow agreement                  |  |   | (499   | )
|Debt issuance costs                                                               |  |   | (51    | )
|                                                                                  |  |   |        |  
|Net
 cash used in financing activities                                            |  |   | (2,888 | )
|                                                                                  |  |   |        |  
|                                                                                  |  |   |        |  
|Net increase in cash and cash
equivalents                                         |  |   | 196    |  
|                                                                                  |  |   |        |  
|Cash and cash equivalents, beginning of period                                    |  |   | 1,580  |  
|                                                                                  |  |   |        |  
|Cash and cash equivalents, end of
period                                          |  | $ | 1,776  |  
|                                                                                  |  |   |        |  

See accompanying notes to Condensed Consolidated Statement of
Cash
Flows.

2

---



FMI HOLDCO I LLC AND SUBSIDIARY

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

1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

| |                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Principles
 of Consolidation                                                                                                                                                                                                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | The
 accompanying unaudited condensed consolidated financial statements include
 the accounts of FMI Holdco I LLC and its wholly-owned subsidiary, FMI
 International LLC (collectively, the Company or FMI). All intercompany
 balances and transactions have been eliminated in consolidation.                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Nature of
 Business                                                                                                                                                                                                                                                                                                                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | The Company
 is a full-service logistics and supply chain management service provider to
 the retail industry. The Company offers ocean and air freight forwarding;
 local trucking services in the New York and Los Angeles metropolitan markets;
 line haul truck load services throughout the continental 48 states; and
 warehousing, consolidation, distribution and marketing services in the New
 York, Los Angeles and Miami markets.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Use of
 Estimates                                                                                                                                                                                                                                                                                                                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Management
 uses estimates and assumptions in preparing financial statements. Those
 estimates and assumptions affect the reported amounts of assets and
 liabilities, the disclosure of contingent assets and liabilities, and
 reported revenues and expenses. Actual results could differ from those
 estimates.                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Revenue
 Recognition                                                                                                                                                                                                                                                                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Revenue is
 recognized as services are rendered to customers and collection is reasonably
 assured.                                                                                                                                                                                                                                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Cash and
 Cash Equivalents                                                                                                                                                                                                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | For purposes
 of the statement of cash flows, the Company considers all highly liquid
 investments with a maturity of three months or less when purchased to be cash
 equivalents.                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Concentration
 of Credit Risk                                                                                                                                                                                                                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | The Company,
 at times, has balances with financial institutions in excess of the FDIC
 limits. The Company limits the amount of exposure with any one financial
 institution and believes that no significant concentration of investment risk
 exists with respect to cash or cash equivalents.                                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Financial
 instruments that potentially subject the Company to credit risk consist
 principally of trade receivables. The Company extends credit to a substantial
 number of its customers and performs ongoing credit evaluations of those
 customers financial condition while generally requiring no collateral.                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | At June 30,
 2006, approximately 24% and 12% of accounts receivable are due from two
 customers.                                                                                                                                                                                                                                                                                                                                             
| |                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | The Company
 generated approximately 22% and 16% of its revenues for the three months
 ended June 30, 2006 from two customers; and 27% and 16% of its revenues for
 the six months ended June 30, 2006 from two customers.                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Income
 Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | In lieu of
 federal corporation income taxes, the members of an LLC include their
 proportionate share of the Companys taxable income or net operating loss in
 their individual income tax returns. Certain minimum state taxes have been
 recorded for the period.                                                                                                                                                                        

3

---



FMI HOLDCO I LLC AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED STATEMENTS OF

OPERATIONS AND CASH FLOWS 
(UNAUDITED)

2 - 401(k)/PROFIT-SHARING PLAN

| |                                                                                                                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The
 Companys 401(k)/profit-sharing plan covers substantially all eligible
 full-time employees. Employer contributions for the 401(k) portion are $0.25
 per $1.00 for participating employees up to 4% of salary, while employer
 contributions for the profit-sharing portion are discretionary. Contributions
 for the three and six months ended June 30, 2006 were approximately $100 and
 $200, respectively.

3 - RELATED PARTY TRANSACTIONS

| |                                                                                                                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company
 paid $215 to KRG Capital (KRG) during the six months ended June 30, 2006.
 These fees were ongoing financial and managerial consulting fees. KRG has a
 controlling interest in FMI Holdco I LLC.                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                                       
| | In 2004,
 certain members purchased the Carteret facility and assumed the existing
 lease, which expires in 2014. Payments to the members under this lease
 totaled $931 for the six months ended June 30, 2006. On June 29, 2006, the
 Carteret facility was sold to an unrelated entity, with the present lease remaining
 in place.

4 - FACILITY SHUTDOWN

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In 2004,
 management approved a plan (the Plan) to shut down a warehouse facility in
 an effort to improve operating efficiencies. The Plan provided for the
 closing of its Carson, California warehouse. The Plan expenses include
 impairment of fixed assets and lease costs (net of estimated sublease
 rentals) related to the shutdown of the facility. Effective April 1, 2005,
 the Company entered into a sublease agreement with a third party to occupy
 the entire facility through July 2007, the termination date of the underlying
 lease. In accordance with SFAS 146, Accounting for Costs Associated with
 Exit or Disposal Activities, plan expenses are recorded net of sublease
 payments as of July 1, 2004 (the cease-use date).
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | The Company
 incurred an additional expense of approximately $20 and $85 for the three and
 the six months ended June 30, 2006 respectively related to the facility shutdown.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

4

---



TUG LOGISTICS,
INC. AND AFFILIATES

CONDENSED
COMBINED STATEMENTS OF OPERATIONS 
(UNAUDITED)

(IN THOUSANDS)

|                                       |  |                                    |        |                                  |   |        | 
|-------------------------------------- |  | ---------------------------------- | ------ | -------------------------------- | - | ------ | 
|                                       |  | Three Months
 Ended
 June 30, 2006 |        | Six Months
 Ended
 June 30, 2006 |  
|                                       |  |                                    |       
|                                       |  |                                    |        |                                  |   |        | 
|Net sales                              |  | $                                  | 24,570 |                                  | $ | 41,024 | 
|                                       |  |                                    |        |                                  |   |        | 
|Cost of sales                          |  |                                    | 21,886 |                                  |   | 36,729 | 
|                                       |  |                                    |        |                                  |   |        | 
|Gross profit                           |  |                                    | 2,684  |                                  |   | 4,295  | 
|                                       |  |                                    |        |                                  |   |        | 
|Operating expenses                     |  |                                    |        |                                  |   |        | 
|General and administrative             |  |                                    | 1,176  |                                  |   | 2,440  | 
|Depreciation and amortization          |  |                                    | 9      |                                  |   | 21     | 
|                                       |  |                                    |        |                                  |   |        | 
|Operating expenses                     |  |                                    | 1,185  |                                  |   | 2,461  | 
|                                       |  |                                    |        |                                  |   |        | 
|Income from operations                 |  |                                    | 1,499  |                                  |   | 1,834  | 
|                                       |  |                                    |        |                                  |   |        | 
|Interest expense, less interest income |  |                                    | 15     |                                  |   | 12     | 
|                                       |  |                                    |        |                                  |   |        | 
|Income before income taxes             |  |                                    | 1,484  |                                  |   | 1,822  | 
|                                       |  |                                    |        |                                  |   |        | 
|Income taxes                           |  |                                    | 224    |                                  |   | 261    | 
|                                       |  |                                    |        |                                  |   |        | 
|                                       |  |                                    |        |                                  |   |        | 
|Net income                             |  | $                                  | 1,260  |                                  | $ | 1,561  | 
|                                       |  |                                    |        |                                  |   |        | 

See accompanying notes to the Condensed
Combined Statements of Operations.

1

---



TUG LOGISTICS, INC. AND AFFILIATES

CONDENSED
COMBINED STATEMENT OF CASH FLOWS 
(UNAUDITED)

SIX MONTHS ENDED JUNE 30, 2006

(IN THOUSANDS)

|                                                                                  |  |   |       |  
|--------------------------------------------------------------------------------- |  | - | ----- | -
|Cash flows from operating activities                                              |  |   |       |  
|Net income                                                                        |  | $ | 1,561 |  
|Adjustments to reconcile net income to net cash
provided by operating
 activities |  |   |       |  
|Depreciation                                                                      |  |   | 21    |  
|Provision for doubtful accounts                                                   |  |   | 139   |  
|Changes in assets and liabilities                                                 |  |   |       |  
|Accounts receivable                                                               |  |   | (570  | )
|Prepaid expenses and other current assets                                         |  |   | (7    | )
|Accounts payable and accrued expenses                                             |  |   | (733  | )
|Income taxes payable                                                              |  |   | 229   |  
|                                                                                  |  |   |       |  
|Net
 cash provided by operating activities                                        |  |   | 640   |  
|                                                                                  |  |   |       |  
|Cash flows from investing activities                                              |  |   |       |  
|Notes receivable, related parties                                                 |  |   | 97    |  
|Acquisition of property and equipment                                             |  |   | (25   | )
|                                                                                  |  |   |       |  
|Net
 cash provided by investing activities                                        |  |   | 72    |  
|                                                                                  |  |   |       |  
|Cash flows from financing activities                                              |  |   |       |  
|Principal payments of long term debt and capital
lease obligations                |  |   | (309  | )
|Dividends paid                                                                    |  |   | (144  | )
|                                                                                  |  |   |       |  
|Net
 cash used in financing activities                                            |  |   | (453  | )
|                                                                                  |  |   |       |  
|Net increase in cash, and cash equivalents, end of period                         |  |   | 259   |  
|                                                                                  |  |   |       |  
|                                                                                 
|Cash,
 beginning of period                                                        |  |   | 1,461 |  
|                                                                                  |  |   |       |  
|Cash, end of period                                                               |  | $ | 1,720 |  
|                                                                                  |  |   |       |  
|Supplemental cash flow disclosures                                                |  |   |       |  
|Interest paid                                                                     |  | $ | 5     |  
|Income taxes paid                                                                 |  | $ | 32    |  

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

2

---



TUG LOGISTICS, INC. AND AFFILIATES

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

1 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES

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

3

---



TUG LOGISTICS, INC. AND AFFILIATES

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

1 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)

| |                                                                                                                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Depreciation                                                                                                                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                
| | Depreciation
 is provided using the straight-line method over estimated useful lives
 ranging from three to seven years.                                                                                                                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                
| | Income
 Taxes                                                                                                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                
| | LAX and
 CLARE have elected S Corporation status for federal and California income tax
 purposes. Under these elections, the taxable income or loss is reportable by
 the stockholders on their individual income tax returns and there are no
 provisions made for federal income tax. Provisions are made for applicable
 state income taxes.
| |                                                                                                                                                                                                                                                                                                                                                
| | MIAMI and
 GLARE are C corporations for federal income tax purposes and are also subject
 to state income taxes in various jurisdictions.                                                                                                                                                                                                      

4

---



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

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

FORWARD LOOKING
STATEMENTS

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

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

Introduction

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

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

Consolidated and Predecessor Companies
Financial Statements

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

Acquisitions

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

1

---



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 its issued and outstanding capital stock prior to the
merger.

As a result
ofthe merger, MLI became a wholly-owned subsidiary of the Company and the
security holders of MLI received an aggregate of 1,451,000 restricted shares of
the Companys common stock representing approximately 85.5% of the Companys
outstanding common stock immediately after the merger and prior to the
financings. Accounting principles generally accepted in the United States
generally require that a company whose security holders retain the majority
voting interest in the combined business be treated as the acquirer for
financial reporting purposes. The acquisition was accounted for as a reverse
acquisition whereby MLI was deemed to be the accounting acquirer.
Additionally, upon the effectiveness of the merger, the Companys then existing
officers and directors were replaced by individuals associated with MLI. Upon
the effectiveness of the merger and prior to the financings and the acquisitions,
security holders holding 85.5% of the Companys then outstanding common stock
voted, by written consent, to amend and restate its certificate of
incorporation, to, among other things, change the Companys corporate name from
Aerobic Creations, Inc. to Summit Global Logistics, Inc. and effect the reverse
split, as described below. In addition, the Companys security holders voted to
approve certain executive compensation arrangements and to adopt a new stock
incentive plan and certain other benefit plans (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.

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

As a key part
of our growth strategy, and with the approval of our current creditors, 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.

2

---



Discussion of Operating Results

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

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

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

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

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

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

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

3

---



Geographic Operating Results.

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

|                    |  |                                    |      |                                    |   |     |  
|------------------- |  | ---------------------------------- | ---- | ---------------------------------- | - | --- | -
|                    |  | Three Months
 Ended
 June 30, 2007 |      | Three Months
 Ended
 June 30, 2006 |  
|                    |  |                                    |      |                                    |  
|Revenues:           |  |                                    |      |                                    |   |     |  
|Americas            |  | $                                  | 25.5 |                                    | $ | .5  |  
|Asia Pacific        |  |                                    | 43.6 |                                    |   |    |  
|                    |  |                                    |      |                                    |   |     |  
|                    |  | $                                  | 69.1 |                                    | $ | .5  |  
|                    |  |                                    |      |                                    |   |     |  
|                    |  |                                    |      |                                    |   |     |  
|Net income
 (loss): |  |                                    |      |                                    |   |     |  
|Americas            |  | $                                  |     |                                    | $ | (.1 | )
|Asia Pacific        |  |                                    | .5   |                                    |   |    |  
|Corporate costs     |  |                                    | (9.2 | )                                  |   |    |  
|                    |  |                                    |      |                                    |   |     |  
|                    |  | $                                  | (8.7 | )                                  | $ | (.1 | )
|                    |  |                                    |      |                                    |   |     |  

|                |  |                                 |       |                                                         |   |     |  
|--------------- |  | ------------------------------- | ----- | ------------------------------------------------------- | - | --- | -
|                |  | Six Months Ended
 June 30, 2007 |       | February 6, 2006
 (date of inception)
 to June 30, 2006 |  
|                |  |                                 |       |                                                         |  
|Revenues:       |  |                                 |       |                                                         |   |     |  
|Americas        |  | $                               | 50.8  |                                                         | $ | .5  |  
|Asia Pacific    |  |                                 | 64.4  |                                                         |   |    |  
|                |  |                                 |       |                                                         |   |     |  
|                |  | $                               | 115.2 |                                                         | $ | .5  |  
|                |  |                                 |       |                                                         |   |     |  
|                |  |                                 |       |                                                         |   |     |  
|Net loss:       |  |                                 |       |                                                         |   |     |  
|Americas        |  | $                               | (1.1  | )                                                       | $ | (.1 | )
|Asia Pacific    |  |                                 | .9    |                                                         |   |    |  
|Corporate costs |  |                                 | (16.6 | )                                                       |   |    |  
|                |  |                                 |       |                                                         |   |     |  
|                |  | $                               | (16.8 | )                                                       | $ | (.1 | )
|                |  |                                 |       |                                                         |   |     |  

4

---



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

|                                               |  |                             |      |      |   |        |   |   |       |   |  |       |    | 
|---------------------------------------------- |  | --------------------------- | ---- | ---- | - | ------ | - | - | ----- | - |  | ----- | -- | 
|                                               |  | Three Months Ended June 30, |      |     
|                                               |  |                             |      |     
|                                               |  | 2007                        |      | 2006 |   | Change |   | % |       |  
|                                               |  |                             |      |      |   |        |   |   |       |  
|Revenues:                                      |  |                             |      |      |   |        |   |   |       |   |  |       |    | 
|Summit                                         |  | $                           | 69.1 |      | $ | .5     |   | $ | 68.6  |   |  |       |    | 
|FMI                                            |  |                             |     |      |   | 24.8   |   |   | (24.8 | ) |  |       |    | 
|TUG                                            |  |                             |     |      |   | 24.6   |   |   | (24.6 | ) |  |       |    | 
|                                               |  |                             |      |      |   |        |   |   |       |   |  |       |    | 
|                                               |  |                             | 69.1 |      |   | 49.9   |   |   | (19.2 | ) |  | 38.5  | %  | 
|Revenues
 less direct expenses (Gross profit): |  |                             |      |      |   |        |   |   |       |   |  |       |    | 
|Summit                                         |  |                             | 8.5  |      |   | .1     |   |   | 8.4   |   |  |       |    | 
|FMI                                            |  |                             |     |      |   | 5.2    |   |   | (5.2  | ) |  |       |    | 
|TUG                                            |  |                             |     |      |   | 2.7    |   |   | (2.7  | ) |  |       |    | 
|                                               |  |                             |      |      |   |        |   |   |       |   |  |       |    | 
|                                               |  |                             | 8.5  |      |   | 8.0    |   |   | 0.5   |   |  | 6.3   | %  | 
|Selling,
 general and administrative:          |  |                             |      |      |   |        |   |   |       |   |  |       |    | 
|Summit                                         |  |                             | 10.3 |      |   | .2     |   |   | 10.1  |   |  |       |    | 
|FMI                                            |  |                             |     |      |   | 2.9    |   |   | (2.9  | ) |  |       |    | 
|TUG                                            |  |                             |     |      |   | 1.2    |   |   | (1.2  | ) |  |       |    | 
|                                               |  |                             |      |      |   |        |   |   |       |   |  |       |    | 
|                                               |  |                             | 10.3 |      |   | 4.3    |   |   | 6.0   |   |  | 137.2 | %  | 
|Depreciation
 and amortization:                |  |                             |      |      |   |        |   |   |       |   |  |       |    | 
|Summit                                         |  |                             | 1.9  |      |   |       |   |   | 1.9   |   |  |       |    | 
|FMI                                            |  |                             |     |      |   | 1.2    |   |   | (1.2  | ) |  |       |    | 
|TUG                                            |  |                             |     |      |   |       |   |   |      |   |  |       |    | 
|                                               |  |                             |      |      |   |        |   |   |       |   |  |       |    | 
|                                               |  |                             | 1.9  |      |   | 1.2    |   |   | 0.7   |   |  | 59.0  | %  | 
|Interest and
 finance charges:                 |  |                             |      |      |   |        |   |   |       |   |  |       |    | 
|Summit                                         |  |                             | 6.7  |      |   |       |   |   | 6.7   |   |  |       |    | 
|FMI                                            |  |                             |     |      |   | 1.5    |   |   | (1.5  | ) |  |       |    | 
|TUG                                            |  |                             |     |      |   |       |   |   |      |   |  |       |    | 
|                                               |  |                             |      |      |   |        |   |   |       |   |  |       |    | 
|                                               |  |                             | 6.7  |      |   | 1.5    |   |   | 5.2   |   |  | 346.7 | %  | 
|Other income
 (expense):                       |  |                             |      |      |   |        |   |   |       |   |  |       |    | 
|Summit                                         |  |                             | (1.6 | )    |   |       |   |   | (1.6  | ) |  |       |    | 
|FMI                                            |  |                             |     |      |   |       |   |   |      |   |  |       |    | 
|TUG                                            |  |                             |     |      |   |       |   |   |      |   |  |       |    | 
|                                               |  |                             |      |      |   |        |   |   |       |   |  |       |    | 
|                                               |  |                             | (1.6 | )    |   |       |   |   | (1.6  | ) |  | 100.0 | %  | 
|Income tax
 (benefit) provision:               |  |                             |      |      |   |        |   |   |       |   |  |       |    | 
|Summit                                         |  |                             | (3.3 | )    |   |       |   |   | (3.3  | ) |  |       |    | 
|FMI                                            |  |                             |     |      |   |       |   |   |      |   |  |       |    | 
|TUG                                            |  |                             |     |      |   | 0.2    |   |   | (0.2  | ) |  |       |    | 
|                                               |  |                             |      |      |   |        |   |   |       |   |  |       |    | 
|                                               |  |                             | (3.3 | )    |   | 0.2    |   |   | (3.5  | ) |  | (1750 | )% | 
|Net (loss)
 income:                            |  |                             |      |      |   |        |   |   |       |   |  |       |    | 
|Summit                                         |  |                             | (8.7 | )    |   | (.1    | ) |   | (8.6  | ) |  |       |    | 
|FMI                                            |  |                             |     |      |   | (0.4   | ) |   | 0.4   |   |  |       |    | 
|TUG                                            |  |                             |     |      |   | 1.3    |   |   | (1.3  | ) |  |       |    | 
|                                               |  |                             |      |      |   |        |   |   |       |   |  |       |    | 
|                                               |  | $                           | (8.7 | )    | $ | 0.8    |   | $ | (9.5  | ) |  | (1187 | )% | 

5

---



|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-------------------------------------------- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Revenues                                    
|                                            
|                                             |  | SUMMITRevenues were $69.1 million for the
three months ended June 30, 2007 compared to $0.5 million for the three
months ended June 30, 2006. Summit acquired FMI and TUG on November 8, 2006.
In April 2007, Summit actively started its operations in the PRC through its
subsidiaries and VIE, which are referred to as Seamaster. The revenues for
the three months ended June 30, 2007 consist primarily of the revenues generated
by FMI, TUG and Seamaster, which amounts to $24.7 million, $28.0 million and
$14.7 million, respectively.                                                                                                                                                             
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                             |  | FMI-Revenues were $24.8 million for the
three months ended June 30, 2006. On November 8, 2006, FMI was acquired by
Maritime, a subsidiary of Summit. On a comparative basis, revenues for the
three months ended June 30, 2007 decreased by $0.1 million or 0.3%. This
decrease is due to the loss of warehouse accounts, decreasing revenue from
cargo handling.                                                                                                                                                                                                                                                                                                                                              
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                             |  | TUG-Revenues were $24.6 million for the
three months ended June 30, 2006. On November 8, 2006, TUG was acquired by
Maritime, a subsidiary of Summit. On a comparative basis, revenues for the
three months ended June 30, 2007 increased by $3.4 million or 13.8%. 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.                                                                                                                                                    
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Revenues
less direct expenses (Gross profit)
|                                            
|                                             |  | SUMMIT-Gross profit was $8.5 million for the
three months ended June 30, 2007 compared to $0.1 million for the three
months ended June 30, 2006. Gross profit for the three months ended June 30,
2007 consists primarily of the gross profits of FMI, TUG and Seamaster which
was $3.6 million, $2.4 million and $1.7 million, respectively. FMI, TUG and Seamaster gross profit as a
percentage of revenue are 17.3%, 6.1% and 11.7%, respectively.                                                                                                                                                                                                                                                          
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                             |  | FMI-Gross profit was $5.2 million for the
three months ended June 30, 2006. On a comparative basis, gross profits for
the three months ended June 30, 2007 decreased by $1.6 million or 30.8%. On a
comparative basis, gross profit as a percent of revenue decreased from 20.9%
in the three months ended June 30, 2006 compared to 17.3% for the three
months ended June 30, 2007. This decrease and the lower gross profit margin
is due to the loss of warehousing revenue accounts reducing the overall
contribution factor on the fixed cost of the building.                                                                                                                                            
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                             |  | TUG-Gross profit was $2.7 million for
    the three months ended June 30, 2006. On a comparative basis, gross profits
    for the three months ended June 30, 2007 decreased by $1.0 million or 38.0%;
    and gross profit as a percent of revenue decreased from 10.9% to 6.1%. This
decrease is due to an increase in ocean freight costs including peak season charges
and lower margin on co-load business, which could not be fully passed on to
our customers.                                                                                                                                                                                                                                          
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Selling,
general and administrative expenses
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                             |  | SUMMIT-Selling, general and administrative
(SG&A) expenses were $10.3 million for the three months ended
June 30, 2007, compared to $0.2 million for the three months ended June 30, 2006.
During the three months ended June 30, 2007 the unaudited condensed
consolidated SG&A expenses of $10.3 million consists principally of
salaries and benefits of $4.7 million, stock based compensation of $0.2
million, professional fees of $2.7 million, office expenses of $0.9 million,
and other SG&A expenses of $1.8 million.. During the three months ended June
30, 2007, the amount of SG&A expenses related to FMI, TUG and Seamaster were
 $2.9 million, $1.6 million and $1.5 million, respectively.
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                             |  | FMI - SG&A expenses were $2.9 million for the three months ended June 30,
2006. On a comparative basis, SG&A expenses for the three months ended
June 30, 2007 remained the same.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                             |  | TUG - SG&A expenses were $1.2 million for the three months ended June 30,
2006. On a comparative basis, SG&A expenses for the three months ended
June 30, 2007 increased by $0.4 million or 35.4% The increase was primarily
driven by an increase in staff and other cost to service its business
expansion into the United States East (Atlanta office) and Gulf coasts.                                                                                                                                                                                                                                                                                                                                    
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Depreciation
and amortization               
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                             |  | SUMMIT  Depreciation and amortization expenses of $1.9 million for the three months
ended June 30, 2007 reflects the consolidated operations of Summit Global
Logistics Inc. and Subsidiaries. The amount for the three months ended June
30, 2007 includes the depreciation and amortization of FMI and TUG of $1.7
million and $0.2 million, respectively.                                                                                                                                                                                                                                                                                                                                                  
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                             |  | FMI  Depreciation and amortization expenses were $1.2 million for the three
months ended June 30, 2006. On a comparative basis, depreciation and
amortization expenses for the three months ended June 30, 2007 increased by
$0.5                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

6

---



|                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------------------------------ | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                               |   | million or
 38.1%. 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.                                                                                                                                                                                                                                                                                                                                                                                     
|                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Interest and finance charges  
|                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                               |  | SUMMIT  Interest and finance charges of
    $6.7 million for the three months ended June 30, 2007 relates principally
    to the senior secured credit facility obtained and the convertible notes
    issued to finance acquisitions of FMI and TUG on November 8, 2006. In connection
    with the restructuring on May 21, 2007, the interest rates related to the
    senior secured debt and convertible notes were increased by approximately
    50 basis point on average, which we anticipate will result in higher interest
    expense in future periods.
|                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                               |  | FMI  Interest and finance charges was $1.5
    million for the three months ended June 30, 2006. The credit facility of
    FMI was fully paid at the date of their merger with Summit.                                                                                                                                                                                                                                                                                                                                                                             
|                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Other income
(expense)        
|                              
|                               |  | SUMMIT  Other expense of $1.6 million is
    principally due to the loss in fair value of derivative instruments. Our
    derivative instruments include embedded discounts on convertible notes and
    warrants.                                                                                                                                                                                                                                                                                                                                                  
|                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Income tax
(benefit) provision
|                              
|                               |  | SUMMIT - Income tax benefit of $3.3 million for the three months ended June 30, 2007
is 27.5% 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.                                                                                                                                                                                                                                                                               
|                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Net income
(loss)             
|                              
|                               |  | SUMMIT - Net loss of $8.7 million for the three
    months ended June 30, 2007 reflects the consolidated operations of Summit
    Global Logistics, Inc. and Subsidiaries (including the acquired companies
    and our VIE). The loss reflects, in part, increased SG&A expenses consisting
    primarily of salaries and benefits, corporate office overhead, increased
    interest expense and loss on fair value of derivative instruments, partially
    offset by an income tax benefit of $3.3 million.                                                      
|                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                               |  | FMI - Net loss was $0.4 million for the three months ended June 30, 2006. On a
comparative basis, FMIs net loss without reallocation of corporate expenses
for the three months ended June 30, 2007 was $0.3 million or a decrease of
$0.1 million. The loss is due to a reduction of revenue and gross profit.                                                                                                                                                                                                                                                     
|                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                               |  | TUG - Net income was $1.3 million for the three months ended June 30, 2006. On a
comparative basis, TUGs net loss without reallocation of corporate expenses
for the three months ended June 30, 2007 is $0.1 million, a decrease of $1.4
million. This decrease was primarily caused by business expansion into the
United States East and Gulf coasts offset by increased costs related to the
expansion.                                                                                                                                                        

7

---



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

|                                               |  |                           |       |      |   |        |   |   |       |   |  |       |   
|---------------------------------------------- |  | ------------------------- | ----- | ---- | - | ------ | - | - | ----- | - |  | ----- | --
|                                               |  | Six months Ended June 30, |      
|                                               |  |                           |      
|                                               |  | 2007                      |       | 2006 |   | Change |   | % |      
|                                               |  |                           |       |      |   |        |   |   |      
|Revenues:                                      |  |                           |       |      |   |        |   |   |       |   |  |       |   
|Summit                                         |  | $                         | 115.2 |      | $ | .5     |   | $ | 114.7 |   |  |       |   
|FMI                                            |  |                           |      |      |   | 52.7   |   |   | (52.7 | ) |  |       |   
|TUG                                            |  |                           |      |      |   | 41.0   |   |   | (41.0 | ) |  |       |   
|                                               |  |                           |       |      |   |        |   |   |       |   |  |       |   
|                                               |  |                           | 115.2 |      |   | 94.2   |   |   | 21.0  |   |  | 22.2  | % 
|Revenues
 less direct expenses (Gross profit): |  |                           |       |      |   |        |   |   |       |   |  |       |   
|Summit                                         |  |                           | 14.9  |      |   | .1     |   |   | 14.8  |   |  |       |   
|FMI                                            |  |                           |      |      |   | 12.0   |   |   | (12.0 | ) |  |       |   
|TUG                                            |  |                           |      |      |   | 4.3    |   |   | (4.3  | ) |  |       |   
|                                               |  |                           |       |      |   |        |   |   |       |   |  |       |   
|                                               |  |                           | 14.9  |      |   | 16.4   |   |   | (1.5  | ) |  | (9.2  | )%
|Selling,
 general and administrative:          |  |                           |       |      |   |        |   |   |       |   |  |       |   
|Summit                                         |  |                           | 19.0  |      |   | .2     |   |   | 18.8  |   |  |       |   
|FMI                                            |  |                           |      |      |   | 6.2    |   |   | (6.2  | ) |  |       |   
|TUG                                            |  |                           |      |      |   | 2.4    |   |   | (2.4  | ) |  |       |   
|                                               |  |                           |       |      |   |        |   |   |       |   |  |       |   
|                                               |  |                           | 19.0  |      |   | 8.8    |   |   | 10.2  |   |  | 115.9 | % 
|Depreciation
 and amortization:                |  |                           |       |      |   |        |   |   |       |   |  |       |   
|Summit                                         |  |                           | 3.6   |      |   |       |   |   | 3.6   |   |  |       |   
|FMI                                            |  |                           |      |      |   | 2.3    |   |   | (2.3  | ) |  |       |   
|TUG                                            |  |                           |      |      |   |       |   |   |      |   |  |       |   
|                                               |  |                           |       |      |   |        |   |   |       |   |  |       |   
|                                               |  |                           | 3.6   |      |   | 2.3    |   |   | 1.3   |   |  | 56.5  | % 
|Interest and
 finance charges:                 |  |                           |       |      |   |        |   |   |       |   |  |       |   
|Summit                                         |  |                           | 11.6  |      |   |       |   |   | 11.6  |   |  |       |   
|FMI                                            |  |                           |      |      |   | 2.8    |   |   | (2.8  | ) |  |       |   
|TUG                                            |  |                           |      |      |   |       |   |   |      |   |  |       |   
|                                               |  |                           |       |      |   |        |   |   |       |   |  |       |   
|                                               |  |                           | 11.6  |      |   | 2.8    |   |   | 8.8   |   |  | 314.3 | % 
|Registration
 rights expense:                  |  |                           |       |      |   |        |   |   |       |   |  |       |   
|Summit                                         |  |                           | 3.0   |      |   |       |   |   | 3.0   |   |  |       |   
|FMI                                            |  |                           |      |      |   |       |   |   |      |   |  |       |   
|TUG                                            |  |                           |      |      |   |       |   |   |      |   |  |       |   
|                                               |  |                           |       |      |   |        |   |   |       |   |  |       |   
|                                               |  |                           | 3.0   |      |   |       |   |   | 3.0   |   |  | 100.0 | % 
|Other income
 (expense):                       |  |                           |       |      |   |        |   |   |       |   |  |       |   
|Summit                                         |  |                           | 0.3   |      |   |       |   |   | 0.3   |   |  |       |   
|FMI                                            |  |                           |      |      |   |       |   |   |      |   |  |       |   
|TUG                                            |  |                           |      |      |   |       |   |   |      |   |  |       |   
|                                               |  |                           |       |      |   |        |   |   |       |   |  |       |   
|                                               |  |                           | 0.3   |      |   |       |   |   | 0.3   |   |  | 100.0 | % 
|Income tax (benefit) provision:                |  |                           |       |      |   |        |   |   |       |   |  |       |   
|Summit                                         |  |                           | (5.2  | )    |   |       |   |   | (5.2  | ) |  |       |   
|FMI                                            |  |                           |      |      |   | 0.1    |   |   | (0.1  | ) |  |       |   
|TUG                                            |  |                           |      |      |   | 0.3    |   |   | (0.3  | ) |  |       |   
|                                               |  |                           |       |      |   |        |   |   |       |   |  |       |   
|                                               |  |                           | (5.2  | )    |   | 0.4    |   |   | (5.6  | ) |  | (1400 | )%
|Net income
 (loss):                            |  |                           |       |      |   |        |   |   |       |   |  |       |   
|Summit                                         |  |                           | (16.8 | )    |   | (.1    | ) |   | (16.7 | ) |  |       |   
|FMI                                            |  |                           |      |      |   | 0.6    |   |   | (0.6  | ) |  |       |   
|TUG                                            |  |                           |      |      |   | 1.6    |   |   | (1.6  | ) |  |       |   
|                                               |  |                           |       |      |   |        |   |   |       |   |  |       |   
|                                               |  | $                         | (16.8 | )    | $ | 2.1    |   | $ | (18.9 | ) |  | (900  | )%

8

---



|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-------------------------------------------- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Revenues                                     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                             |  | SUMMIT-Revenues of $115.2 million for the six months ended June 30,
 2007 compared to $0.5 million in the prior period from February 6, 2006 (date
 of inception) to June 30, 2006. Summit acquired FMI and TUG on November 8,
 2006. In April 2007, Summit actively started its operations in the PRC
 through its subsidiaries and VIE, which are referred to as Seamaster. The
 revenues for the six months ended June 30, 2007 consist primarily of the
 revenues generated by FMI, TUG, Seamaster and AmeRussia, which were $49.3
 million, $48.8 million, $14.7 million and $1.4 million, respectively.                                                                                                                                                                                                              
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                             |  | FMI -
 Revenues were $52.7 million for the six months ended June 30, 2006. On
 November 8, 2006, FMI was acquired by Maritime, a subsidiary of Summit. On a
 comparative basis, revenues for the six months ended June 30, 2007 decreased
 by $3.4 million or 6.4%. This decrease is due to the loss of warehouse
 accounts decreasing the revenue from cargo handling.                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                             |  | TUG-
 Revenues were $41.0 million for the six months ended June 30, 2006. On
 November 8, 2006, TUG was acquired by Maritime, a subsidiary of Summit. On a
 comparative basis, revenues for the six months ended June 30, 2007 increased
 by $7.8 million or 18.9%. This increase is due to (i) an increase in containerized
 cargo freight management movements related to the continued expansion of
 business to the United States East and Gulf Coasts from Asia, including the
 opening of a New York office during 2006, and (ii) general market growth.                                                                                                                                                                                                                                                            
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Revenues less direct expenses (Gross profit)
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                             |  | SUMMIT-Gross profit was $14.9 million for the six months ended June 30,
 2007 compared to $0.1 million in the prior period from February 6, 2006 (date
 of inception) to June 30, 2006. In 2006, Summit through Maritime was a newly
 formed entity. In 2007, the gross profit of Summit consists primarily of the
 gross profits of FMI, TUG, Seamaster and AmeRussia of $8.2 million, $4.6
 million, $1.7 million and $0.3, respectively.                                                                                                                                                                                                                                                                                                                                                                                
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                             |  | FMI-Gross
 profit was $12.0 million for the six months ended June 30, 2006. On a
 comparative basis, gross profits for the six months ended June 30, 2007
 (which is included in Summits results) was $8.2 million, a decrease of $3.8
 million or 31.9%. On a comparative basis, gross profit as a percent of
 revenue decreased from 22.7% in the six months ended June 30, 2006 compared
 to 16.5% for the six months ended June 30, 2007. This decrease and the lower
 gross profit margin is due to the loss of warehousing revenue accounts
 reducing the overall contribution factor on the fixed cost of the building.                                                                                                                                                                                            
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                             |  | TUG-Gross
 profit was $4.3 million for the six months ended June 30, 2006. On a
 comparative basis, gross profits for the six months ended June 30, 2007
 (which is included in Summits results) was $4.6 million, an increase of
 $0.3 million or 6.8%. Gross profit as a percent of revenue decreased from 10.5%
 to 9.4%. This decrease is due to the increase in ocean freight costs including
 peak season charges and lower margin on co-load business, which could not be
 fully passed on to our customers.                                                                                                                                                                                                                                                                                                       
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Selling, general and administrative expenses
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                             |  | SUMMIT- Selling, general and administrative (SG&A) expenses were
  $19.0 million for the six months ended June 30, 2007, compared to $0.2
 million for the period from February 6, 2006 (date of inception) to June 30,
 2006. In 2006, Summit through Maritime was a newly formed entity. During the
 six months ended June 30, 2007, Summits unaudited condensed consolidated
 SG&A expenses consist principally of salaries and benefits of $9 million,
 stock based compensation of $ 1.3 million, professional fees of $4.2 million,
 office expense of $1.8 million, and other SG&A expenses of $2.7 million.
 During the six months ended June 30, 2007, the amount of SG&A expenses related
 to FMI, TUG, Seamaster and AmeRussia were $5.8 million, $3.2 million, $1.7 million
 and $0.5 million, respectively.
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                             |  | FMI - SG&A expenses were $6.2
 million for the six months ended June 30, 2006. On a comparative basis,
 SG&A expenses for the six months ended June 30, 2007 decreased by $0.4
 million or 5.0%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                             |  | TUG - SG&A expenses were $2.4 million for the six months ended June 30, 2006.
On a comparative basis, SG&A expenses for the six months ended June 30,
2007 increased by $0.8 million or 32.2%. The increase was primarily driven by
an increase in staff and other costs to service its business expansion into
the United States East and Gulf coasts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

9

---



|                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|------------------------------ | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Depreciation and amortization 
|                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                               |  | SUMMIT  Depreciation and amortization
 expenses of $3.6 million for the six months ended June 30, 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 $3.2
 million and $0.4 million, respectively.                                                                                                                                                                                                                                                 
|                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                               |  | FMI  Depreciation and amortization
 expenses were $2.3 million for the six months ended June 30, 2006. On a
 comparative basis, depreciation and amortization expenses for the six months
 ended June 30, 2007 increased by $0.9 million or 39.2%. 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.                                                                                                                                                       
|                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Interest and finance charges: 
|                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                               |  | SUMMIT  Interest and finance charges of $11.6
    million for the six months ended June 30, 2007 is principally due to the
    senior secured credit facility obtained and the convertible notes issued
    to finance the acquisitions of FMI and TUG on November 8, 2006. In connection
    with the restructuring on May 21, 2007, the interest rates related to the
    senior secured debt and convertible notes was increased by approximately
    50 basis points, on average, which we anticipate will result in higher interest
    expense in future periods.
|                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                               |  | FMI  Interest and finance charges were
    $2.8 million for the six months ended June 30, 2006.The credit facility of
    FMI was fully paid at the date of their acquisition.                                                                                                                                                                                                                                                                                                                                                                                         
|                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Registration rights expense   
|                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                               |  | SUMMIT  Registration rights expense of
 $3.0 million for the six months ended June 30, 2007 is due to the failure to
 meet the registration provision with the convertible note holders and the
 private placement common stock purchasers during the first quarter of 2007.
 If our registration statement filed on June 20, 2007 is not deemed effective
 by September 18, 2007, we will incur substantial registration penalties.                                                                                                                                   
|                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Other income (expense)        
|                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                               |  | SUMMIT  Other income of $0.3 million is
 principally due to interest income and the change in fair value of derivative
 instruments which include embedded discounts on convertible notes and
 warrants.                                                                                                                                                                                                                                                                                                                                                               
|                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Income tax (benefit) provision
|                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                               |  | SUMMIT - Income tax benefit of $5.2
 million for the six months ended June 30, 2007 is 23.7% of the loss before
 income tax benefit. The effective tax benefit rate differs from the statutory
 federal income tax rate of 34% due to permanent differences and state income
 taxes.                                                                                                                                                                                                                                                                                    
|                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Net income (loss)             
|                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                               |  | SUMMIT - Net loss of $16.8 million for
 the six months ended June 30, 2007 reflects the consolidated operations of
 Summit Global Logistics Inc. and Subsidiaries (including the acquired
 companies and our VIE). The loss reflects, in part, increased SG&A
 expenses, consisting primarily of salaries and benefits, corporate office
 overhead, interest expense and registration rights expense.                                                                                                                                                                   
|                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                               |  | FMI- Net income was $0.6 million
 for the six months ended June 30, 2006. On a comparative basis, FMIs net
 loss for the six months ended June 30, 2007 (which is included in Summits
 results) without reallocation of corporate overhead is $1 million, a decrease
 of $1.6 million. This decrease is attributable to FMIs decreased gross
 profit.                                                                                                                                                                                                                
|                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                               |  | TUG - Net income was $1.6 million for
 the six months ended June 30, 2006. On a comparative basis, TUG net income
 for the six months ended June 30, 2007 (which is included in Summits
 results) without reallocation of corporate overhead is $1 million, a decrease
 of $0.5 million. This decrease was primarily caused by lower gross profit
 margin and the increase in SG&A expenses due to the expansion of its business
 in the United States East and Gulf Coasts.                                                                                           

10

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Liquidity and Capital Resources

As of June 30,
2007, we had cash and cash equivalents of approximately $13.4 million
(including restricted cash of $3.4 million) and working capital of $19.3
million, compared with cash and cash equivalents of $15.8 million (including
    restricted cash of $4.0 million) and working capital of $20.7 million, at
    December 31, 2006. The decrease of $2.4 million in our cash and cash equivalents
    during the six months ended June 30, 2007, is a result of our use of cash
    in our operating activities of $10.8 million, use of cash in our investing
    activities of $1.4 million and cash provided by our financing activities
    of $9.8 million, consisting primarily of proceeds from the sale of additional
    convertible notes and the restructuring of existing convertible notes on
    May 21, 2007. The decrease of $1.4 million in our working capital was primarily
    attributable to the increase in our accounts payable and accrued expenses.
    The payment of interest under our restructured convertible notes has been
    deferred until June 2008.

As of June 30,
2007, we did not meet certain financial covenants under our senior secured
credit facility and convertible debt. We obtained, as of July 30, 2007, waivers
of these defaults. As disclosed below, we have failed in the past to meet certain
of the financial covenants under our senior secured credit facility and
convertible debt. While we were able to obtain waivers from our senior secured
lender and note holders with respect to the most recent default, our failure to
meet the financial covenants constituted an event of default under the
operative loan documents, which could have resulted in an acceleration of our
senior secured and convertible note indebtedness and our lenders foreclosing on
our assets. We cannot be certain that we will be able to comply with our
financial covenants in the future. If we are unable to comply with the
financial covenants contained in our credit documents, there could be a
material adverse effect on our business, financial condition and results of
operations.

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

As disclosed
above, as of June 30, 2007, we did not meet certain financial covenants under
our senior secured credit facility and convertible notes (relating primarily
    to the attainment of specified EBITDA targets and maintenance of prescribed
    ratios of debt to trailing twelve month EBITDA (as defined)). We have, effective
    as of July 31, 2007, obtained limited waivers of these defaults from our
    senior secured lender and note holders. We are currently negotiating with
    our senior secured lenders and our note holders to revise our financial covenants
    so that they are better aligned with our historical and anticipated financial
    results. We may incur substantial expense and be subject to other material
    detriments in order to induce the senior secured lenders and note holders
    to revise our financial covenants. If we are unable to secure a revision
    of our financial covenants, there may be a further event of default under
    our senior secured credit facility and convertible notes, in which case,
    there would likely be a material adverse effect on our business, financial
    condition and results of operations.

Based on our
expectation that (i) our business will generate sufficient operating cash flow;
(ii) our lenders do not sweep all excess cash from our accounts at year-end as
permitted under our credit facilities, and (iii) our capital expenditures will
not exceed budgeted amounts, we expect we have sufficient working capital to
meet our planned operations for the next twelve months.

Our access to
additional sources of liquidity is dependent upon, among other things, the
support of our senior lenders. The terms of our senior credit facility, notes
and long-term leases require that we comply with certain financial and other
covenants and restrictions which limit our activities, including securing
additional funding. We may however seek debt or equity financings, in public or
private transactions. There can be no assurances that additional equity or debt
financing will be available on acceptable terms, if at all. Our potential
sources of long-term liquidity (beyond twelve months), include our then current
cash balances (if any), any cash flows from operations, our current credit
facility, though we currently have no availability there under, and any
additional equity or credit facilities we can arrange. We cannot be certain as
to the availability of sufficient sources of long-term liquidity. If we obtain
additional funds by issuing equity securities, dilution to stockholders may
occur, and conversion rate adjustments and/or anti-dilution provision in our
notes and warrants may apply that could adversely affect our stockholders. If
we are not able to generate sufficient cash flow from our operations to meet
our obligations under the senior credit facility, notes, leases and earn-out
payments, then we will be required to use our capital for such payments and may
be required to refinance all or a portion of such obligations or obtain
additional financing. This will negatively impact our liquidity and financial
position and restrict our ability to make additional acquisitions. We may also
be forced to sell an acquired company in order to satisfy our obligations. We
cannot be certain that we will be able to operate profitably once we sell an
acquired company or that we will be able to generate a sufficient amount of
proceeds from the disposition of such acquired companies to satisfy the
obligations we incurred to make these acquisitions.

We will
require additional working capital in the future to fund our growth. We
anticipate that we will be able to obtain access to additional sources of
equity and debt financing, but can provide no assurance that additional funds
will be available, or if available, on

11

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commercially acceptable terms or in a
timely manner to enable us to continue our operations in the normal course. As
disclosed elsewhere herein, our covenants in connection with our agreements
with our senior secured creditor and note holders limit our ability to raise
more debt or capital. See Contractual Obligations -Senior Credit Facility for
more information.

We invested
approximately $6 million in our operations in Asia Pacific through Seamaster
Logistics (Shanghai) Ltd. and our exclusive agency agreement with Seamaster
Logistics (China) Ltd. for working capital and capital expenditures.

We anticipate
that our capital expenditures for the remainder of 2007 will be approximately
$2 million, comprised of additional office equipment, the replacement of
current warehouse equipment, leasehold improvements, and information
technology.

Off-Balance Sheet Arrangements

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

Impact of Inflation

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

Critical Accounting Policies and Use of
Estimates

The
preparation of our unaudited condensed financial statements in accordance with
GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities that are not readily apparent from other sources. We
evaluate these estimates including those related to basis of consolidation,
business combinations, revenue recognition, self insurance, accounts receivable
and allowance for doubtful accounts, impairment of tangible and intangible
assets and goodwill. Actual results may differ from these estimates using
different assumptions under different conditions. We believe that the following
discussion addresses our most critical accounting policies, which are those
that are most important to the portrayal of our consolidated financial condition
and results of operations and require managements most difficult, subjective
and complex judgments.

Revenue Recognition

Air and Ocean Freight Services. Revenue is recognized at the time of shipment. The Company
recognizes revenue on air and ocean freight services on a gross basis, in
accordance with Emerging Issues Task Force (EITF) 99-19, Reporting Revenue
Gross versus Net, as a result of the following: the Company is the primary
obligor responsible for providing the service desired by our customer and are
responsible for fulfillment, including the acceptability of the services
ordered by the customer. The Company, at its sole discretion, sets the prices
charged to our customers, and is not required to obtain approval or consent
from any other party in establishing our prices. The Company has multiple
suppliers for the services we provide our customers and has the absolute and
complete discretion and right to select the supplier that best serves our
customer needs. In most cases, the Company determines the nature, type,
characteristics, and specifications of the services ordered by the customer.
The Company also assumes credit risk for the amount billed to the customer.

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

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

Convertible Notes

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

12

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

Derivatives

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

Stock-Based Incentive Plans

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

Variable Interest Entities

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

13

---



Contractual Obligations

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

|                                         |  |                        |         |                   |   |           |  |           |        |                    |   |         |  |   |       | 
|---------------------------------------- |  | ---------------------- | ------- | ----------------- | - | --------- |  | --------- | ------ | ------------------ | - | ------- |  | - | ----- | 
|                                         |  | Payments due by period |        
|                                         |  |                        |        
|                                         |  | Total                  |         | Less than
 1 year |   | 1-3 years |  | 3-5 years |        | More than 5
 years |  
|                                         |  |                        |         |                   |   |           |  |           |        |                    |  
|Long-term-debt                           |  | $                      | 52,000  |                   | $ | 7,000     |  | $         | 16,000 |                    | $ | 29,000  |  | $ |      | 
|                                         |  |                        |         |                   |   |           |  |           |        |                    |   |         |  |   |       | 
|Interest on
 long-term debt              |  |                        | 16,812  |                   |   | 5,258     |  |           | 8,033  |                    |   | 3,521   |  |   |      | 
|                                         |  |                        |         |                   |   |           |  |           |        |                    |   |         |  |   |       | 
|Capital
 leases                          |  |                        | 1,506   |                   |   | 843       |  |           | 606    |                    |   | 57      |  |   |      | 
|                                         |  |                        |         |                   |   |           |  |           |        |                    |   |         |  |   |       | 
|Interest on
 capital leases              |  |                        | 90      |                   |   | 66        |  |           | 22     |                    |   | 2       |  |   |      | 
|                                         |  |                        |         |                   |   |           |  |           |        |                    |   |         |  |   |       | 
|Operating
 leases                        |  |                        | 54,653  |                   |   | 14,261    |  |           | 23,299 |                    |   | 13,685  |  |   | 3,408 | 
|                                         |  |                        |         |                   |   |           |  |           |        |                    |   |         |  |   |       | 
|Purchase
 Obligations                    |  |                        | 136     |                   |   | 136       |  |           |       |                    |   |        |  |   |      | 
|                                         |  |                        |         |                   |   |           |  |           |        |                    |   |         |  |   |       | 
|Contractual
 obligations and other loans |  |                        | 97,324  |                   |   |          |  |           |       |                    |   | 97,324  |  |   |      | 
|                                         |  |                        |         |                   |   |           |  |           |        |                    |   |         |  |   |       | 
|                                         |  | $                      | 222,521 |                   | $ | 27,564    |  | $         | 47,960 |                    | $ | 143,589 |  | $ | 3,408 | 
|                                         |  |                        |         |                   |   |           |  |           |        |                    |   |         |  |   |       | 

Senior
Secured Credit Facility

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

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

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

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

Upon the
occurrence and during the continuation of an event of default, the interest
rate(s) then in effect with respect to the obligations under the senior credit
facility will be increased by three percent (3%) per annum.

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

14

---



any additional
third-party letter of credit issuer fees and/or cash collateral requirements.
The servicing fee equals $25, payable quarterly in advance.

Our senior
secured credit facility is secured by a first priority security interest in
substantially all of our existing and future assets and the other borrowers
that are party to the senior credit facility, including all of their plant
property and equipment and accounts receivable, and the proceeds thereof
(subject to permitted liens). In addition to the scheduled quarterly term loan
principal payments, we are required to make an annual principal payment each
year in an amount equal to fifty percent (50%) of excess cash flow for the
immediately preceding fiscal year. Excess cash flow is generally defined as our
EBITDA for the applicable period less consolidated net interest expense less
the cash portion of capital expenditures made during such period less scheduled
cash principal payments made on account of debt during such period less all
cash prepayments on account of our senior secured credit facility (other than
payments on account of revolving loans that do not permanently reduce the
revolving commitments by the amount of such payment(s)) during such period less
income taxes paid or accrued during such period less special incentive bonuses,
earn-outs and deferred payments of purchase price for the acquisitions
permitted to be consummated under the senior credit facility made during such
period less any closing fee, loan servicing, unused line fee, letter of credit
fee and prepayment fee paid during such period. The excess cash flow payments
shall be applied to the term loan, in inverse order of maturity. Our credit
facility 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. This cost will be amortized and charged to expense
over the next five years.

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

Amendments to senior
secured credit facility

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

15

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

Convertible Notes
and Warrants

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

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

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

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

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

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

A holder may
require us to redeem the notes upon an event of default or upon a change of
control, in each case at a premium over the principal amount of the notes being
redeemed. The premium in the event 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

16

---



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

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

The warrants
issued in connection with the notes also provide for a cash payment in the
event of a change of control equal to the Black Scholes value of the
unexercised portion of the warrant which may result in a significant cash
payment to the holders of the warrants.We recorded deferred financing costs of
approximately $6.1 million, including expenses in connection with this note
financing. In addition, based upon lattice models utilizing discount cash flows
and Black-Scholes valuation, we recorded issuance costs of approximately $1.4
million, in connection with the warrants issued to the placement agent. These
costs will be amortized and charged to expense over the next five years.

We also
entered into an amended registration rights agreement with the buyers, 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 there under. 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
convertible notes

Convertible Notes.On
May 21, 2007, as part of the restructuring of the Companys debt, the Company
restructured the terms of the existing $65 million of secured convertible notes
and accompanying warrants. After the restructuring the convertible notes are
convertible at the option of the holder into shares of the Companys common
stock at an initial conversion price equal to $5.50 per share (subject to
adjustment) and the warrants are exercisable at any time prior to November 8,
2011 at an initial exercise price equal to $5.50 per share (subject to
adjustment).

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 June 30, 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.

Private Placement of
Convertible Notes

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

17

---



An aggregate
default interest payment of $400,833 in connection with a failure to deliver
timely our quarterly financial statements was added pro rata to the principal
amount of the convertible notes in lieu of paying such interest in cash and
will be payable on the earlier of November 8, 2011 or the date on which the
notes are converted to common stock of the Company.

We sold $2.5 million of the $15 million additional
convertible notes and warrants on substantially the same terms, to members of
our management. We may also issue up to $2.0 million of additional convertible
notes and warrants to certain of our professionals in satisfaction of fees that
we owe them. The new convertible notes are convertible at the option of the
holder into shares of our common stock at an initial conversion price equal to
$5.50 per share (subject to adjustment) and the new warrants, which are
exercisable until November 8, 2011 at an initial exercise price equal to $5.50
per share (subject to adjustment). The new convertible notes bear interest at
    a rate per annum equal to LIBOR plus the applicable margin then in effect.
    As of May 21, 2007, the applicable margins on the restructured convertible
    notes per annum range from 3.50% to 4.50% subject to the condition that the
    applicable margin shall not be less than 4.50% during the period from May
    21, 2007 until the financial statements are delivered for the quarter ended
    December 31, 2007. Further, the interest payment on the new convertible notes
    for the five (5) consecutive calendar quarters commencing on the quarter
    ended June 30, 2007 is not payable until the earlier of the maturity date,
    May 21, 2012 for the new convertible notes, or the date on which the notes
are converted into our common stock.

Waiver of Accrued
Registration Rights Penalties.

Convertible Notes and Warrants.
In exchange for $2 million of restructured convertible notes, the holders of
the convertible notes waived existing penalties pursuant to the registration
rights agreement relating to our failure to cause the shares of our common stock
underlying the convertible notes and warrants to become registered and extended
the deadline for causing such shares to be registered. A pro-rata portion of
this $2 million was added to the principal amount of each holders restructured
convertible note. Interest is payable at the same rate as the convertible
notes. The agreement calls for the Company to file an amended registration
statement with the Securities and Exchange Commission within 30 days of the
amendment (which has been done) and for the registration statement to become
effective within 90 days from the date of filing.

We may redeem
all or any portion of the restructured convertible notes and the new notes on
or [before] May 21, 2010, if the closing sale price of our common stock is
greater than 180% of the conversion price then in effect for each of the
previous 20 trading days and certain other conditions are satisfied, as opposed
to November 8, 2006 as set out in the original notes.

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

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 June 30, 2007 as accrued registration rights expense).

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

18

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Contingent Payments

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

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

Notes:

|    |                                                                                                                                                                                                                                                                                                                                                                                    
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The TUG
 earn-outs are contractual commitments based upon agreed EBITDA targets. The
 earn-out payments set out above are projected payments based upon estimates
 by TUG. In addition, there are
 contingent earn-out payments based upon achievement of EBITDA above the
 targets. If EBITDA targets are not met, the
 earn-out payments will be less than those set forth above.

19

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

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

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

20

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Recent Accounting Pronouncements

In June 2007,
the Financial Accounting Standards Board (FASB) ratified the consensus on
Emerging Issues Task Force (EITF) Issue No. 06-11, Accounting for Income Tax
Benefits of Dividends on Share-Based Payment Awards (EITF 06-11). EITF 06-11
requires companies to recognize the income tax benefit realized from dividends
or dividend equivalents that are charged to retained earnings and paid to
employees for non-vested equity-classified employee share-based payment awards
as an increase to additional paid-in capital. EITF 06-11 is effective for
fiscal years beginning after September 15, 2007 (fiscal year 2008 for the
Company). The adoption is not expected to have a material impact on our
consolidated financial statements.

Subsequent Events

In July 2007,
the Company announced a restructuring of SMI and the Trans-Atlantic logistics
operation of AMR. The restructuring resulted in a termination of eleven
employees including the Presidents of SMI and AMR. The Company expects to
recognize a charge of approximately $700 in the third quarter of 2007 for severance
    cost and office closure expense.

In August
2007, the Company obtained limited waivers for its failure to meet certain financial
covenants at June 30, 2007 from its Senior Secured Creditor and Convertible
Note Holders. In order to obtain the waiver, the Company has agreed to engage
    a financial advisor acceptable at the sole discretion of the Senior Secured
Creditor. The financial advisor is responsible for obtaining additional equity
and addressing other matters with respect to the financial restructuring of the
Company. In addition, the Company has agreed with the Convertible Note Holders
to change their existing quarterly financial covenants to the same monthly
financial covenants currently in effect with the Senior Secured Creditors for
July and August 2007.

21

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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 effect our interest
expense by $1.4 million per year.

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

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

Foreign Currency Exposure.

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

Customer Concentration

We have a
limited number of customers with individually large amounts due at any given
balance sheet date. Any unanticipated change in one of those customers credit
worthiness, or other matters affecting the 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 June 30, 2007, approximately
7.5% of accounts receivable were due from one customer. For the three months
and six months ended June 30, 2007, approximately 10.7% and 12.7% of revenues,
respectively, was generated from one customer, Jones Apparel Group, Inc.

22

---



ITEM 4. Controls and Procedures

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

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

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

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

Section 404 Compliance

Beginning with
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. We expect to incur substantial expense
in connection with the Section 404 compliance project.

Changes in Internal Control Over Financial
Reporting

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

23

---



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

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

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

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

As of June 30,
2007, we did not meet certain financial covenants under our senior secured
credit facility and convertible debt. On August 17, 2007, we obtained waivers
of these defaults. As disclosed above, we have failed in the past to meet
certain of the financial covenants under our senior secured credit facility and
convertible debt. While we were able to obtain waivers from our senior secured
lender and note holders with respect to the most recent default, our failure to
meet the financial covenants constituted an event of default under the
operative loan documents, which could have resulted in an acceleration of our
senior secured and convertible note indebtedness and our lenders foreclosing on
our assets. We cannot be certain that we will be able to comply with our financial
covenants in the future. If we are unable to comply with the financial
covenants contained in our credit documents, there could be a material adverse
effect on our business, financial condition and results of operations.

Our senior
lenders have a secured interest in all of our assets. In the event of a
default, our senior lenders could accelerate our borrowings and foreclose on
our assets, in which case, investors would likely suffer a total loss of their
investment.

There have
been multiple defaults under our senior secured credit facility and our
convertible notes.

As of June 30,
2007, we did not meet certain financial covenants under our senior secured
credit facility and convertible notes (relating primarily to the attainment of
specified EBITDA targets and maintenance of prescribed ratios of debt to
trailing twelve month EBITDA (as defined)). In addition, there have been
previous failures to meet financial covenants under our senior secured credit
facility and convertible notes. We have effective as of July 31, 2007, obtained
limited waivers of the June 30 related defaults from our senior secured lender
and note holders. We are currently negotiating with our senior secured lenders
and our note holders to revise our financial covenants so that they are better
aligned with our historical and anticipated financial results. We may incur
substantial expense and be subject to other material detriments in order to
induce the senior secured lenders and note holders to revise our financial
covenants. If we are unable to secure a revision of our financial covenants,
there may be a further event of default under our senior secured credit
facility and convertible notes, in which case, there would likely be a material
adverse effect on our business, financial condition and results of operations.

Country risk

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

24

---



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

Previously
disclosed in a Current Report on Form 8-K filed with the SEC on May 25, 2007.

Item 3. DEFAULTS UPON SENIOR SECURITIES

As of June 30,
2007, we did not meet certain financial covenants under our senior secured
credit facility and convertible notes (relating primarily to the attainment of
specified EBITDA targets and maintenance of prescribed ratios of debt to
trailing twelve month EBITDA (as defined)). We have, effective as of July 31,
2007, obtained limited waivers of these defaults from our senior secured lender
    and note holders. We are currently negotiating with our senior secured lenders
    and our note holders to revise our financial covenants so that they are better
aligned with our historical and anticipated financial results. We may incur
substantial expense and be subject to other material detriments in order to
induce the senior secured lenders and note holders to revise our financial
covenants. If we are unable to secure a revision of our financial covenants,
there may be a further event of default under our senior secured credit
facility and convertible notes, in which case, there would likely be a material
adverse effect on our business, financial condition and results of operations.

25

---



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

On May 18,
2007, the Company held its annual meeting of stockholders in New York, New
York. At the Annual Meeting, the stockholders of the Company acted upon the
following matters:

Election of Directors. The following Directors
were elected at the Annual Meeting, based upon the following tabulations of
votes:

|                     |  |            |           |                |  |             |  |          |        |                   |  |         |  |  |   | 
|-------------------- |  | ---------- | --------- | -------------- |  | ----------- |  | -------- | ------ | ----------------- |  | ------- |  |  | - | 
|                     |  | Votes
 For |           | Votes
 Against |  | Abstentions |  | Withheld |        | Broker
 Non-Votes | 
|                     |  |            |           |                |  |             |  |          |        |                   |  |         |  |  |   | 
|General Wesley Clark |  |            | 5,246,027 |                |  |            |  |          |       |                   |  |        |  |  |  | 
|                     |  |            |           |                |  |             |  |          |        |                   |  |         |  |  |   | 
|Robert Agresti       |  |            | 5,146,027 |                |  |            |  |          |       |                   |  | 100,000 |  |  |  | 
|                     |  |            |           |                |  |             |  |          |        |                   |  |         |  |  |   | 
|Paul Windfield       |  |            | 5,232,027 |                |  |            |  |          | 14,000 |                   |  |        |  |  |  | 

The following
Directors term of office as a director continued after the meeting:


Gregory DeSayeJ. Terence MacAveryRobert ONeillWilliam J. Coogan


Amendment of Equity Incentive Plan. The
Companys Equity Incentive Plan was amended to increase by 250,000 the number
of shares of common stock authorized for issuance under the Plan, based upon
the following tabulations of votes:

| |            |  |                |   |             |  |          |  |                   |   |  |  |   | 
| | ---------- |  | -------------- | - | ----------- |  | -------- |  | ----------------- | - |  |  | - | 
| | Votes
 For |  | Votes
 Against |   | Abstentions |  | Withheld |  | Broker
 Non-Votes |  
| |            |  |                |   |             |  |          |  |                   |  
| | 5,232,027  |  |                |  |             |  | 14,000   |  |                   |  |  |  |  | 

Appointment of Friedman LLP. The appointment
of Friedman LLP as the Companys independent registered public accounting firm
for the year ending December 31, 2007 was ratified, based upon the following
tabulation of votes:

| |            |  |                |   |             |  |          |  |                   |   |  |  |   | 
| | ---------- |  | -------------- | - | ----------- |  | -------- |  | ----------------- | - |  |  | - | 
| | Votes
 For |  | Votes
 Against |   | Abstentions |  | Withheld |  | Broker
 Non-Votes |  
| |            |  |                |   |             |  |          |  |                   |  
| | 5,246,027  |  |                |  |             |  |         |  |                   |  |  |  |  | 

Item 5. OTHER INFORMATION

None.

Item 6. EXHIBITS

|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|----------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. | Description                                                                                                                                                                                                                                                                                                                                                                                                                                       
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|2.1         | Agreement
 and Plan of Merger, dated as of November 8, 2006, by and among Aerobic
 Creations, Inc., Aerobic Merger Sub Inc., and Maritime Logistics US Holdings
 Inc. (1)                                                                                                                                                                                                                                                                         
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|3.1         | First
 Amended and Restated Certificate of Incorporation of Aerobic Creations, Inc. (6)                                                                                                                                                                                                                                                                                                                                                           
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|3.2         | Certificate
 of Merger of Aerobic Merger Sub Inc. with and into Maritime Logistics US
 Holdings Inc. (1)                                                                                                                                                                                                                                                                                                                                          
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|3.3         | Amended and
 Restated Bylaws of Aerobic Creations, Inc. (to be known as Summit Global
 Logistics, Inc.) (1)                                                                                                                                                                                                                                                                                                                                       
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.1         | Form of
 Warrant issued under Convertible Notes Securities Purchase Agreement. (1)                                                                                                                                                                                                                                                                                                                                                                
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.2         | Form of Note
 issued under Convertible Notes Securities Purchase Agreement. (1)                                                                                                                                                                                                                                                                                                                                                                   
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.3         | Form of
 Warrant issued under common stock Securities Purchase Agreement. (1)                                                                                                                                                                                                                                                                                                                                                                     
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.4         | Registration
 Rights Agreement under the Securities Purchase Agreement (Notes and
 Warrants), dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                                                   
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.5         | Registration
 Rights Agreement under the Securities Purchase Agreement (common stock and
 Warrants), dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                                            
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.6         | Lockup
 Agreement by and between Protex Holding Limited and Summit Global Logistics,
 Inc., dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                                                     
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.7         | Lockup
 Agreement by and between Robert Lee and Summit Global Logistics, Inc., dated
 as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                                                                 
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.8         | Lockup
 Agreement by and between Robert Wu and Summit Global Logistics, Inc., dated
 as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                                                                  
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.9         | Lockup
 Agreement by and between the management of Maritime Logistics US Holdings
 Inc. and Summit Global Logistics, Inc., dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                      
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.10        | Lockup
 Agreement by and between the management of FMI Holdco I, LLC and Summit
 Global Logistics, Inc., dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                                        
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.11        | Lockup
 Agreement by and between Di Wang, Dong Wong, and Han Huy Ling and Summit
 Global Logistics, Inc., dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                                       
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.12        | Voting
 Agreement dated as of November 8, 2006 by and between Maritime Logistics US
 Holdings Inc. and the holders of the common stock of Maritime Logistics US
 Holdings Inc., certain members and employees of the parent companies of FMI
 Holdco I, LLC, the principal holders of the common stock of the TUG group of
 logistic companies, and the holder of the issued shares in the capital of Sea
 Master Logistics (Holding) Limited. (1)
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.13        | Waiver and Amendment No. 1 to Warrant issued
          under Convertible Notes Securities Purchase Agreement. (7)                                                                                                                                                                                                                                                                                                                                 
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.14        | Waiver and Amendment No. 1 to Warrant issued
          under common stock Securities Purchase Agreement. (7)                                                                                                                                                                                                                                                                                                                                      
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.15        | Form of Warrant under Convertible Notes Securities
          Purchase Agreement. (7)                                                                                                                                                                                                                                                                                                                                                              
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.16        | Form of Amended and Restated Senior Secured
          Convertible Note.  (7)                                                                                                                                                                                                                                                                                                                                                                      
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.17        | Form of Senior Secured Convertible Note.
          (7)                                                                                                                                                                                                                                                                                                                                                                                            
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.18        | Form of Unsecured Convertible Note.  (7)                                                                                                                                                                                                                                                                                                                                                                                                          
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.19        | Waiver and Amendment No. 1 to Registration
          Rights Agreement under the Securities Purchase Agreement (Notes and
          Warrants).  (7)                                                                                                                                                                                                                                                                                                
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.20        | Waiver and Amendment No. 1 to Registration
          Rights Agreement (common stock and Warrants), dated as of November
          8, 2006. (7)                                                                                                                                                                                                                                                                                                    
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.1        | Security Agreement (Second Lien),
          dated as of November 8, 2006 made by the guarantors listed therein
          and Law Debenture Trust Company of New York. (1)                                                                                                                                                                                                                                                                         
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.2        | Pledge and Security Agreement,
          dated as of November 8, 2006 made by the pledgors listed therein and
          Law Debenture Trust Company of New York. (1)                                                                                                                                                                                                                                                                              
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.3        | Guaranty, dated as of November
          8, 2006 made by the guarantors listed therein and Law Debenture Trust
          Company of New York. (1)                                                                                                                                                                                                                                                                                                 
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.4        | Intercreditor and Subordination
          Agreement, under Notes Purchase Agreement, dated as of November 8,
          2006 by and between Fortress Credit Corp. and the parties listed therein. (1)                                                                                                                                                                                                                                              
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.5        | Securities
 Purchase Agreement (common stock and Warrants), dated as of October 31, 2006,
 among Maritime Logistics US Holdings Inc., Aerobic Creations, Inc. and the
 purchasers listed therein. (1)                                                                                                                                                                                                                                             
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.6        | Securities
 Purchase Agreement (Notes and Warrants), dated as of November 8, 2006, among
 Maritime Logistics US Holdings Inc., Aerobic Creations, Inc. and the
 purchasers listed therein; First Amendment to Securities Purchase Agreement
 (Notes and Warrants), dated as of January 5, 2007. (3)                                                                                                                                               
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.7        | Joinder
 Agreement to common stock Securities Purchase Agreement, dated as of November
 8, 2006 by and among Maritime Logistics US Holdings Inc. and the investors
 identified therein. (1)                                                                                                                                                                                                                                                       
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.8        | Joinder
 Agreement to Convertible Notes Securities Purchase Agreement, dated as of
 November 8, 2006 by and among Maritime Logistics US Holdings Inc. and the
 investors identified therein. (1)                                                                                                                                                                                                                                                  
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.9        | Loan
 Agreement, dated as of November 8, 2006 by and among Maritime Logistics US
 Holdings Inc. and its subsidiaries as borrowers, the guarantors identified
 therein, Fortress Credit Corp. as agent, and certain other lenders as set
 forth therein. (1)                                                                                                                                                                                       
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.10       | Security
 Agreement under Loan Agreement, dated November 8, 2006 made by the borrowers
 and guarantors identified therein in favor of Fortress Credit Corp. (1)                                                                                                                                                                                                                                                                                   
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.11       | Pledge and
 Security Agreement, dated November 8, 2006 made by the pledgors identified
 therein in favor of Fortress Credit Corp. (1)                                                                                                                                                                                                                                                                                                             
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.12       | Leasehold
 Mortgage, Assignment of Rents and Security Agreement, dated November 8, 2006
 by FMI International LLC to Fortress Credit Corp. (800 Federal Blvd,
 Carteret, NJ). (1)                                                                                                                                                                                                                                                                 
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.13       | Leasehold
 Mortgage, Assignment of Rents and Security Agreement, dated November 8, 2006
 by FMI International LLC and First American Title Insurance for the benefit
 of Fortress Credit Corp. (3355 Dulles Dr., Mira Loma, CA). (1)                                                                                                                                                                                                              
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.14       | Sale and
 Purchase Agreement by and among Maritime Logistics US Holdings Inc. and
 Protex Holdings Limited and Sea Master Logistics (Holding) Limited, dated as
 of September 28, 2006. (1)(4)                                                                                                                                                                                                                                                    
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.15       | Asset/Stock
 Purchase Agreement by and among Dolphin US Logistics, Inc. and TUG Logistics,
 Inc., Glare Logistics Inc., and TUG Logistics (Miami), Inc. and Clare
 Freight, Los Angeles, Inc., and TUG New York, Inc. and Robert Lee, and Robert
 Wu and Wang Dong, Di Wang and Han Huy Ling, dated as of October 2, 2006. (1)                                                                                                                    
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.16       | Equity
 Purchase Agreement between the parties set forth therein and Maritime
 Logistics US Holdings Inc., dated October 23, 2006. (1)                                                                                                                                                                                                                                                                                                            
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.17       | TUG Miami
 and Los Angeles Bonus Agreement by and among TUG USA, Inc. and the employees
 set forth therein, dated as of October 2, 2006. (5)                                                                                                                                                                                                                                                                                                      
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.18       | TUG New York
 Bonus Agreement by and among TUG USA, Inc. and the New York employees set
 forth therein, dated as of October 2, 2006. (5)                                                                                                                                                                                                                                                                                                          
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.19       | TUG China
 Bonus Agreement by and between Sea Master Logistics (Holding) Limited and
 Robert Lee and Robert Wu, dated October 2, 2006. (5)                                                                                                                                                                                                                                                                                                        
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.20       | Assignment
 and Assumption Agreement by and among each of TUG Logistics, Inc., Glare
 Logistics, Inc., and TUG Logistics (Miami), Inc. and TUG USA, Inc., dated as
 of October 2 2006. (1)                                                                                                                                                                                                                                                        
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.21       | Agency
 Agreement, dated as of September 22, 2006, between Sea Master Logistics
 (Holding) Limited and Sea Master Logistics (China) Limited. (1)                                                                                                                                                                                                                                                                                                  
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.22       | Transportation
 Service Agreement by and between FMI Express Corp., FMI Trucking, Inc. and
 Jones Apparel Group USA, Inc., dated as of August 1, 2001; and Modification
 Agreement related thereto. (1)(4)                                                                                                                                                                                                                                        
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.23       | Summit
 Global Logistics, Inc. 2006 Equity Incentive Plan. (1)                                                                                                                                                                                                                                                                                                                                                                                    
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.24       | Summit
 Global Logistics, Inc. 2007 Management Incentive Plan. (1)                                                                                                                                                                                                                                                                                                                                                                                
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.25       | Summit
 Global Logistics, Inc. Severance Benefit Plan. (1)                                                                                                                                                                                                                                                                                                                                                                                        
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.26       | Summit
 Global Logistics, Inc. 2007 Supplemental Executive Retirement Plan. (1)                                                                                                                                                                                                                                                                                                                                                                   
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.27       | Employment
 Agreement of Robert Agresti, dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                                                                                                        
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.28       | Employment
 Agreement of Paul Shahbazian, dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                                                                                                       
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.29       | Employment
 Agreement of Christopher Dombalis, dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                                                                                                  
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.30       | Employment
 Agreement of William Knight, dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                                                                                                        
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.31       | Employment
 Agreement of Robert ONeill, dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                                                                                                        
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.32       | Form of
 Indemnification and Founders Agreement, entered into by the following
 individuals: Robert Agresti, Paul Shahbazian, Peter Klaver, William Knight,
 Christopher Dombalis, James Madden, and Peter Stone, dated November 8, 2006. (1)                                                                                                                                                                                                    
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.33       | Indemnification
 and Founders Agreement for Raymer McQuiston, dated November 8, 2006. (1)                                                                                                                                                                                                                                                                                                                                                        
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.34       | Lease
 Agreement by and between SDI Technologies, Inc. and FMI International Corp.,
 dated August 14, 1996; Lease Extension Agreement dated March 7, 2002.
 Assignment and Assumption of Lease Amendment to Lease and Short Form of
 Lease, each dated September 23, 2004 by and between SDI Technologies, Inc.
 and 800 Federal Blvd LLC. (1)                                                                                                    
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.35       | Land and
 Building Lease Agreement by and between Thrifty Oil Co. and FMI International
 LLC, dated as of July20, 2004; Sublease Agreements related thereto. (1)                                                                                                                                                                                                                                                                                  
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.36       | Industrial
 Complex Lease by and between Port LA Distribution Center II, L.P. and FMI
 International (West) LLC, dated as of December 30, 2002; Amendments and
 Agreements related thereto. (1)                                                                                                                                                                                                                                                   
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.37       | Industrial
 Complex Lease by and between Port LA Distribution Center II, L.P. and FMI
 International LLC, dated as of July 28, 2003.
 (1)                                                                                                                                                                                                                                                                                                         
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.38       | Lease
 Agreement by and between AAAA World Import  Export, Inc. and FMI
 International Corp., dated as of November 2001. (1)                                                                                                                                                                                                                                                                                                                     
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.39       | Lease
 Agreement by and between M. Parisi & Son Construction Co., Inc, and
 Fashion Marketing, Inc., dated as of April 28, 2000. (1)                                                                                                                                                                                                                                                                                                              
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.40       | AMB Property
 Corporation Industrial Lease dated December 6, 1999; Amendments and Guarantee
 related thereto. (1)                                                                                                                                                                                                                                                                                                                                 
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.41       | Lease
 Agreement by and between Flagler Development Corp. and FMI International LLC
 dated as of September19, 2006, effective January 15, 2007. (1)                                                                                                                                                                                                                                                                                               
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.42       | Original
 Lease by and between Center Realty L.P. and DSL Atlantic, dated March 1993;
 Agreements related thereto. (1)                                                                                                                                                                                                                                                                                                                            
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.43       | Real
 Property Lease by and between Keegan Center LLC and Glare Logistics, Inc.,
 dated September 15, 2003; Agreements related thereto. (1)                                                                                                                                                                                                                                                                                                       
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.44       | Forbearance
 Agreement dated as of April 16, 2007 by and among Fortress Credit Corp.,
 Summit Global Logistics, Inc. and certain of its subsidiaries. (2)                                                                                                                                                                                                                                                                                         
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.45       | First Amendment to Security Agreement (Second
          Lien) made by the guarantors listed therein and Law Debenture Trust
          Company of New York. (7)                                                                                                                                                                                                                                                                                    
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.46       | First Amendment Pledge and Security Agreement
          made by the pledgors listed therein and Law Debenture Trust Company
          of 
        New York. (7)                                                                                                                                                                                                                                                                                   
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.47       | First Amendment to Guaranty made by the guarantors
          listed therein and Law Debenture Trust Company of New York. (7)                                                                                                                                                                                                                                                                                                                      
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.48       | Amendment No. 1 to Intercreditor and Subordination
          Agreement, under Notes Purchase Agreement, by and between Fortress
          Credit Corp. and the parties listed therein. (7)                                                                                                                                                                                                                                                        
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.49       | Intercreditor and Subordination Agreement (7)                                                                                                                                                                                                                                                                                                                                                                                                     
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.50       | Second Amendment to Securities Purchase Agreement
          (Notes and Warrants) and First Amendment to Joinder Agreement (7)                                                                                                                                                                                                                                                                                                                     
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.51       | Amendment No. 1 Loan Agreement, by and among
          Maritime Logistics US Holdings Inc. and its subsidiaries as borrowers,
          the guarantors identified therein, Fortress Credit Corp. as agent,
          and certain other lenders as set forth therein. (7)                                                                                                                                                                          
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|21.1        | List of subsidiaries of Summit Global Logistics,
          Inc. (2)                                                                                                                                                                                                                                                                                                                                                                               
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|31.1        | Certification
 pursuant to 17 C.F.R § 240.15d14 (a), as adopted pursuant to Section
 302 of the SarbanesOxley Act of 2002 for Robert Agresti (8)                                                                                                                                                                                                                                                                                                
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|31.2        | Certification
 pursuant to 17 C.F.R § 240.15d14 (a), as adopted pursuant to Section 302 of
 the SarbanesOxley Act of 2002 for Paul Shahbazian (8)                                                                                                                                                                                                                                                                                               
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|32.1        | Certifications
 pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the
 SarbanesOxley Act of2002 for Robert Agresti and Paul Shahbazian (8)                                                                                                                                                                                                                                                                                     

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

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

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

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

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

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

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

(8) Filed herewith.

26

---



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: August
 20, 2007 | By:                            | /s/ Robert
 Agresti                   
|                       |                                |                                       
|                       |                                | Robert
 Agresti                       
|                       |                                | President
 and Chief Executive Officer
|                       |                                |                                       
|Date: August
 20, 2007 | By:                            | /s/ Paul
 Shahbazian                  
|                       |                                |                                       
|                       |                                | Paul
 Shahbazian                      
|                       |                                | Chief
 Financial Officer              

27

---



INDEX TO
EXHIBITS

|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|----------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. | Description                                                                                                                                                                                                                                                                                                                                                                                                                                       
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|2.1         | Agreement
 and Plan of Merger, dated as of November 8, 2006, by and among Aerobic
 Creations, Inc., Aerobic Merger Sub Inc., and Maritime Logistics US Holdings
 Inc. (1)                                                                                                                                                                                                                                                                         
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|3.1         | First
 Amended and Restated Certificate of Incorporation of Aerobic Creations, Inc. (6)                                                                                                                                                                                                                                                                                                                                                           
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|3.2         | Certificate
 of Merger of Aerobic Merger Sub Inc. with and into Maritime Logistics US
 Holdings Inc. (1)                                                                                                                                                                                                                                                                                                                                          
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|3.3         | Amended and
 Restated Bylaws of Aerobic Creations, Inc. (to be known as Summit Global
 Logistics, Inc.) (1)                                                                                                                                                                                                                                                                                                                                       
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.1         | Form of
 Warrant issued under Convertible Notes Securities Purchase Agreement. (1)                                                                                                                                                                                                                                                                                                                                                                
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.2         | Form of Note
 issued under Convertible Notes Securities Purchase Agreement. (1)                                                                                                                                                                                                                                                                                                                                                                   
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.3         | Form of
 Warrant issued under common stock Securities Purchase Agreement. (1)                                                                                                                                                                                                                                                                                                                                                                     
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.4         | Registration
 Rights Agreement under the Securities Purchase Agreement (Notes and
 Warrants), dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                                                   
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.5         | Registration
 Rights Agreement under the Securities Purchase Agreement (common stock and
 Warrants), dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                                            
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.6         | Lockup
 Agreement by and between Protex Holding Limited and Summit Global Logistics,
 Inc., dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                                                     
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.7         | Lockup
 Agreement by and between Robert Lee and Summit Global Logistics, Inc., dated
 as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                                                                 
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.8         | Lockup
 Agreement by and between Robert Wu and Summit Global Logistics, Inc., dated
 as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                                                                  
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.9         | Lockup
 Agreement by and between the management of Maritime Logistics US Holdings
 Inc. and Summit Global Logistics, Inc., dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                      
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.10        | Lockup
 Agreement by and between the management of FMI Holdco I, LLC and Summit
 Global Logistics, Inc., dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                                        
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.11        | Lockup
 Agreement by and between Di Wang, Dong Wong, and Han Huy Ling and Summit
 Global Logistics, Inc., dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                                                       
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.12        | Voting
 Agreement dated as of November 8, 2006 by and between Maritime Logistics US
 Holdings Inc. and the holders of the common stock of Maritime Logistics US
 Holdings Inc., certain members and employees of the parent companies of FMI
 Holdco I, LLC, the principal holders of the common stock of the TUG group of
 logistic companies, and the holder of the issued shares in the capital of Sea
 Master Logistics (Holding) Limited. (1)
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.13        | Waiver and Amendment No. 1 to Warrant issued
          under Convertible Notes Securities Purchase Agreement. (7)                                                                                                                                                                                                                                                                                                                                 
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.14        | Waiver and Amendment No. 1 to Warrant issued
          under common stock Securities Purchase Agreement. (7)                                                                                                                                                                                                                                                                                                                                      
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.15        | Form of Warrant under Convertible Notes Securities
          Purchase Agreement. (7)                                                                                                                                                                                                                                                                                                                                                              
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.16        | Form of Amended and Restated Senior Secured
          Convertible Note.  (7)                                                                                                                                                                                                                                                                                                                                                                      
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.17        | Form of Senior Secured Convertible Note.
          (7)                                                                                                                                                                                                                                                                                                                                                                                            
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.18        | Form of Unsecured Convertible Note.  (7)                                                                                                                                                                                                                                                                                                                                                                                                          
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.19        | Waiver and Amendment No. 1 to Registration
          Rights Agreement under the Securities Purchase Agreement (Notes and
          Warrants).  (7)                                                                                                                                                                                                                                                                                                
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4.20        | Waiver and Amendment No. 1 to Registration
          Rights Agreement (common stock and Warrants), dated as of November
          8, 2006. (7)                                                                                                                                                                                                                                                                                                    
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.1        | Security Agreement (Second Lien),
          dated as of November 8, 2006 made by the guarantors listed therein
          and Law Debenture Trust Company of New York. (1)                                                                                                                                                                                                                                                                         
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.2        | Pledge and Security Agreement,
          dated as of November 8, 2006 made by the pledgors listed therein and
          Law Debenture Trust Company of New York. (1)                                                                                                                                                                                                                                                                              
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.3        | Guaranty, dated as of November
          8, 2006 made by the guarantors listed therein and Law Debenture Trust
          Company of New York. (1)                                                                                                                                                                                                                                                                                                 
|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|10.4        | Intercreditor and Subordination
          Agreement, under Notes Purchase Agreement, dated as of November 8,
          2006 by and between Fortress Credit Corp. and the parties listed therein. (1)                                                                                                                                                                                                                                              



28

---



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

29

---



|      |                                                                                                                                                                                                                                                                                                                                               
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.24 | Summit
 Global Logistics, Inc. 2007 Management Incentive Plan. (1)                                                                                                                                                                                                                                                                            
|      |                                                                                                                                                                                                                                                                                                                                               
|10.25 | Summit
 Global Logistics, Inc. Severance Benefit Plan. (1)                                                                                                                                                                                                                                                                                    
|      |                                                                                                                                                                                                                                                                                                                                               
|10.26 | Summit
 Global Logistics, Inc. 2007 Supplemental Executive Retirement Plan. (1)                                                                                                                                                                                                                                                               
|      |                                                                                                                                                                                                                                                                                                                                               
|10.27 | Employment
 Agreement of Robert Agresti, dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                    
|      |                                                                                                                                                                                                                                                                                                                                               
|10.28 | Employment
 Agreement of Paul Shahbazian, dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                   
|      |                                                                                                                                                                                                                                                                                                                                               
|10.29 | Employment
 Agreement of Christopher Dombalis, dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                              
|      |                                                                                                                                                                                                                                                                                                                                               
|10.30 | Employment
 Agreement of William Knight, dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                    
|      |                                                                                                                                                                                                                                                                                                                                               
|10.31 | Employment
 Agreement of Robert ONeill, dated as of November 8, 2006. (1)                                                                                                                                                                                                                                                                    
|      |                                                                                                                                                                                                                                                                                                                                               
|10.32 | Form of
 Indemnification and Founders Agreement, entered into by the following
 individuals: Robert Agresti, Paul Shahbazian, Peter Klaver, William Knight,
 Christopher Dombalis, James Madden, and Peter Stone, dated November 8, 2006. (1)                                                                                                
|      |                                                                                                                                                                                                                                                                                                                                               
|10.33 | Indemnification
 and Founders Agreement for Raymer McQuiston, dated November 8, 2006. (1)                                                                                                                                                                                                                                                    
|      |                                                                                                                                                                                                                                                                                                                                               
|10.34 | Lease
 Agreement by and between SDI Technologies, Inc. and FMI International Corp.,
 dated August 14, 1996; Lease Extension Agreement dated March 7, 2002.
 Assignment and Assumption of Lease Amendment to Lease and Short Form of
 Lease, each dated September 23, 2004 by and between SDI Technologies, Inc.
 and 800 Federal Blvd LLC. (1)
|      |                                                                                                                                                                                                                                                                                                                                               
|10.35 | Land and
 Building Lease Agreement by and between Thrifty Oil Co. and FMI International
 LLC, dated as of July20, 2004; Sublease Agreements related thereto. (1)                                                                                                                                                                              
|      |                                                                                                                                                                                                                                                                                                                                               
|10.36 | Industrial
 Complex Lease by and between Port LA Distribution Center II, L.P. and FMI
 International (West) LLC, dated as of December 30, 2002; Amendments and
 Agreements related thereto. (1)                                                                                                                                               
|      |                                                                                                                                                                                                                                                                                                                                               
|10.37 | Industrial
 Complex Lease by and between Port LA Distribution Center II, L.P. and FMI
 International LLC, dated as of July 28, 2003.
 (1)                                                                                                                                                                                                     
|      |                                                                                                                                                                                                                                                                                                                                               
|10.38 | Lease
 Agreement by and between AAAA World Import  Export, Inc. and FMI
 International Corp., dated as of November 2001. (1)                                                                                                                                                                                                                 
|      |                                                                                                                                                                                                                                                                                                                                               
|10.39 | Lease
 Agreement by and between M. Parisi & Son Construction Co., Inc, and
 Fashion Marketing, Inc., dated as of April 28, 2000. (1)                                                                                                                                                                                                          
|      |                                                                                                                                                                                                                                                                                                                                               
|10.40 | AMB Property
 Corporation Industrial Lease dated December 6, 1999; Amendments and Guarantee
 related thereto. (1)                                                                                                                                                                                                                             
|      |                                                                                                                                                                                                                                                                                                                                               
|10.41 | Lease
 Agreement by and between Flagler Development Corp. and FMI International LLC
 dated as of September19, 2006, effective January 15, 2007. (1)                                                                                                                                                                                           
|      |                                                                                                                                                                                                                                                                                                                                               
|      |                                                                                                                                                                                                                                                                                                                                               
|10.42 | Original
 Lease by and between Center Realty L.P. and DSL Atlantic, dated March 1993;
 Agreements related thereto. (1)                                                                                                                                                                                                                        
|      |                                                                                                                                                                                                                                                                                                                                               
|10.43 | Real
 Property Lease by and between Keegan Center LLC and Glare Logistics, Inc.,
 dated September 15, 2003; Agreements related thereto. (1)                                                                                                                                                                                                   
|      |                                                                                                                                                                                                                                                                                                                                               
|10.44 | Forbearance
 Agreement dated as of April 16, 2007 by and among Fortress Credit Corp.,
 Summit Global Logistics, Inc. and certain of its subsidiaries. (2)                                                                                                                                                                                     
|      |                                                                                                                                                                                                                                                                                                                                               
|10.45 | First Amendment to Security Agreement (Second
          Lien) made by the guarantors listed therein and Law Debenture Trust
          Company of New York. (7)                                                                                                                                                                                
|      |                                                                                                                                                                                                                                                                                                                                               
|10.46 | First Amendment Pledge and Security Agreement
          made by the pledgors listed therein and Law Debenture Trust Company
          of 
        New York. (7)                                                                                                                                                                               
|      |                                                                                                                                                                                                                                                                                                                                               
|10.47 | First Amendment to Guaranty made by the guarantors
          listed therein and Law Debenture Trust Company of New York. (7)                                                                                                                                                                                                                  
|      |                                                                                                                                                                                                                                                                                                                                               
|10.48 | Amendment No. 1 to Intercreditor and Subordination
          Agreement, under Notes Purchase Agreement, by and between Fortress
          Credit Corp. and the parties listed therein. (7)                                                                                                                                                    
|      |                                                                                                                                                                                                                                                                                                                                               
|10.49 | Intercreditor and Subordination Agreement (7)                                                                                                                                                                                                                                                                                                 
|      |                                                                                                                                                                                                                                                                                                                                               
|10.50 | Second Amendment to Securities Purchase Agreement
          (Notes and Warrants) and First Amendment to Joinder Agreement (7)                                                                                                                                                                                                                 
|      |                                                                                                                                                                                                                                                                                                                                               
|10.51 | Amendment No. 1 Loan Agreement, by and among
          Maritime Logistics US Holdings Inc. and its subsidiaries as borrowers,
          the guarantors identified therein, Fortress Credit Corp. as agent,
          and certain other lenders as set forth therein. (7)                                                                      
|      |                                                                                                                                                                                                                                                                                                                                               
|21.1  | List of subsidiaries of Summit Global Logistics,
          Inc. (2)                                                                                                                                                                                                                                                                           



30

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

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

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

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

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

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

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

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

(8) Filed herewith.

31

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