Delaware
|
04-3625550
|
(State
or Other Jurisdiction of
Incorporation
or Organization)
|
(IRS
Employer Identification No.)
|
Large
accelerated filer [ ]
|
Accelerated
filer [ ]
|
Non-accelerated
filer
[x]
|
PART
I. FINANCIAL INFORMATION
|
||||||
Item
1.
|
|
Condensed
Financial Statements - Unaudited
|
|
|
|
|
|
|
Condensed
Consolidated Balance Sheets at March 31, 2006 and
December 31, 2005
|
|
|
3
|
|
|
|
Condensed
Consolidated Statements of Operations Three
months ended March 31, 2006 and 2005
|
|
|
4
|
|
|
|
Condensed
Consolidated Statements of Stockholders’ Equity
|
|
|
5
|
|
|
|
Condensed
Consolidated Statements of Cash Flows Three
months ended March 31, 2006 and 2005
|
|
|
6
|
|
|
|
Notes
to Condensed Consolidated Financial Statements
|
|
|
7
|
|
Item
2.
|
|
Management’s
Discussion and Analysis of Financial Conditions and Results of
Operations
|
|
|
15
|
|
Item
3.
|
|
Quantitative
and Qualitative Disclosures about Market Risk
|
|
|
23
|
|
Item
4.
|
Controls
and Procedures
|
23
|
||||
PART
II OTHER INFORMATION
|
||||||
Item
1.
|
Legal
Proceedings
|
24
|
||||
Item
1A.
|
Risk
Factors
|
24
|
||||
Item
2.
|
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
24
|
|||
Item
3.
|
Defaults
Upon Senior Securities
|
24
|
||||
Item
4.
|
Submission
of Matter to a Vote of Security Holders
|
24
|
||||
Item
5.
|
Other
Information
|
24
|
||||
Item
6.
|
|
Exhibits
|
|
|
24
|
|
ASSETS
|
|||||||
March
31,
|
December
31,
|
||||||
|
2006
|
2005
|
|||||
(unaudited)
|
|||||||
Current
assets -
|
|||||||
Cash
and cash equivalents
|
$
|
730,613
|
$
|
5,266,451
|
|||
Accounts
receivable, net of allowance
|
6,622,257
|
-
|
|||||
for
doubtful accounts of approximately $353,000
|
|||||||
Other
receivables
|
102,637
|
25,055
|
|||||
Prepaid
expenses and other current assets
|
183,186
|
-
|
|||||
Total
current assets
|
7,638,693
|
5,291,506
|
|||||
Goodwill
and acquired intangibles, net
|
7,676,722
|
-
|
|||||
Furniture
and equipment, net
|
242,103
|
-
|
|||||
Employee
loan receivable
|
119,900
|
-
|
|||||
Investment
in real estate
|
20,000
|
-
|
|||||
Deposits
and other assets
|
55,602
|
15,907
|
|||||
$
|
15,753,020
|
$
|
5,307,413
|
||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
Current
liabilities -
|
|||||||
Accounts
payable
|
$
|
3,979,039
|
$
|
-
|
|||
Accrued
transportation costs
|
1,062,362
|
-
|
|||||
Commissions
payable
|
249,586
|
-
|
|||||
Other
accrued costs
|
536,013
|
148,388
|
|||||
Income
taxes payable
|
1,009,135
|
-
|
|||||
Total
current liabilities
|
6,836,135
|
148,388
|
|||||
Long
term debt
|
1,781,070
|
-
|
|||||
Deferred
tax liability
|
874,412
|
-
|
|||||
Total
liabilities
|
9,491,617
|
148,388
|
|||||
Commitments
& contingencies
|
-
|
-
|
|||||
Stockholders'
equity:
|
|||||||
Preferred
stock, $0.001 par value, 5,000,000 shares authorized;
|
|||||||
no
shares issued or outstanding
|
-
|
-
|
|||||
Common
stock, $0.001 par value, 50,000,000 shares authorized;
|
|||||||
33,611,639
issued and outstanding
|
15,067
|
12,590
|
|||||
Additional
paid-in capital
|
6,615,719
|
5,488,707
|
|||||
Accumulated
deficit
|
(369,383
|
)
|
(342,272
|
)
|
|||
Total
Stockholders’ equity
|
6,261,403
|
5,159,025
|
|||||
$
|
15,753,020
|
$
|
5,307,413
|
|
|||||||
FOR
THE THREE MONTHS ENDED MARCH 31,
|
|||||||
2006
|
2005
|
||||||
Revenue
|
$
|
11,842,717
|
$
|
-
|
|||
Cost
of transportation
|
7,479,707
|
-
|
|||||
Net
revenues
|
4,363,010
|
-
|
|||||
Agent
Commissions
|
3,197,709
|
-
|
|||||
Personnel
costs
|
639,087
|
-
|
|||||
Selling,
general and administrative expenses
|
447,008
|
13,830
|
|||||
Depreciation
and amortization
|
206,103
|
-
|
|||||
Loss
from operations
|
(126,897
|
)
|
(13,830
|
)
|
|||
Other
income (expense):
|
|||||||
Interest
income
|
11,466
|
-
|
|||||
Interest
expense
|
(13,324
|
)
|
(500
|
)
|
|||
Loss
before income tax expense (benefit)
|
(128,755
|
)
|
(14,330
|
)
|
|||
|
|||||||
Income
tax expense (benefit)
|
(101,645
|
)
|
-
|
||||
Net
loss
|
$
|
(27,110
|
)
|
$
|
(14,330
|
)
|
|
Net
loss per common share - basic and diluted
|
$
|
0.00
|
$
|
0.00
|
|||
Weighted
average basic and diluted
|
|||||||
common
shares outstanding
|
32,754,957
|
25,964,179
|
|
|
|
|
ADDITIONAL
|
|
|
|
TOTAL
|
|
|||||||
|
|
|
COMMON
STOCK
|
|
|
PAID-IN
|
ACCUMULATED | STOCKHOLDERS' | ||||||||
|
SHARES
|
AMOUNT
|
CAPITAL
|
DEFICIT
|
EQUITY
|
|||||||||||
Balance
at January 1, 2006
|
31,135,849
|
$
|
12,590
|
$
|
5,488,708
|
$
|
(342,273
|
)
|
$
|
5,159,025
|
||||||
|
||||||||||||||||
Issuance
of common stock for cash
|
||||||||||||||||
at
$0.44 per share (January 2006)(unaudited)
|
1,009,093
|
1,010
|
442,673
|
-
|
443,683
|
|||||||||||
Issuance
of common stock for cash
|
||||||||||||||||
at
$0.44 per share (February 2006)(unaudited)
|
1,466,697
|
1,467
|
641,528
|
-
|
642,995
|
|||||||||||
Share
based compensation
|
-
|
-
|
42,810
|
-
|
42,810
|
|||||||||||
Net
loss for the three months ended
|
||||||||||||||||
March
31, 2006 (unaudited)
|
-
|
-
|
-
|
(27,110
|
)
|
(27,110
|
)
|
|||||||||
Balance
at March 31, 2006
|
33,611,639
|
$
|
15,067
|
$
|
6,615,719
|
$
|
(369,383
|
)
|
$
|
6,261,403
|
FOR
THE THREE MONTHS ENED
MARCH
31,
|
|||||||
2006
|
2005
|
||||||
CASH
FLOWS PROVIDED BY (USED FOR) OPERATING ACTIVITIES:
|
|||||||
Net
loss
|
$ | (27,110 | ) | $ | (14,330 | ) | |
ADJUSTMENTS
TO RECONCILE NET LOSS TO NET CASH
|
|||||||
PROVIDED
BY (USED FOR) OPERATING ACTIVITIES:
|
|||||||
non-cash
contribution to capital (rent)
|
-
|
300
|
|||||
non-cash
compensation expense (stock options)
|
42,810
|
-
|
|||||
amortization
of intangibles
|
170,200
|
-
|
|||||
depreciation
and amortization
|
(21,965
|
)
|
-
|
||||
allowance
for doubtful accounts
|
135,000
|
-
|
|||||
CHANGE
IN ASSETS AND LIABILITIES -
|
|||||||
Prepaid
expenses and other current assets
|
1,672,183
|
-
|
|||||
accounts
payable and accrued expenses
|
(2,223,497
|
)
|
4,247
|
||||
Total
adjustments
|
(225,269
|
)
|
4,457
|
||||
Net
cash provided by (used for)
|
|||||||
operating
activities
|
(252,379
|
)
|
(9,783
|
)
|
|||
CASH
FLOWS PROVIDED BY (USED FOR) INVESTING ACTIVITIES:
|
|||||||
Acquisition
of Airgroup, net of acquired cash (See Note 3)
|
(7,302,220
|
)
|
-
|
||||
Proceeds
from sale of investments
|
208,236
|
-
|
|||||
Net
cash used for investing
|
(7,093,984
|
)
|
-
|
||||
CASH
FLOWS PROVIDED BY (USED FOR) FINANCING ACTIVITIES:
|
|||||||
Proceeds
from notes payable, stockholders
|
24,909
|
||||||
Proceeds
from issuance of common stock
|
1,086,679
|
-
|
|||||
Net
proceeds from credit facility
|
1,281,070
|
-
|
|||||
Payment
of credit facility fees
|
(57,224
|
)
|
-
|
||||
Long
term debt for acquisition
|
500,000
|
-
|
|||||
Net
cash provided by financing activities
|
2,810,525
|
24,909
|
|||||
NET
INCREASE (DECREASE) IN CASH
|
(4,535,838
|
)
|
15,126
|
||||
CASH,
BEGINNING OF THE PERIOD
|
5,266,451
|
19,487
|
|||||
CASH,
END OF PERIOD
|
$
|
730,613
|
$
|
34,613
|
|||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
|||||||
Income
taxes paid
|
$
|
524,907
|
$
|
800
|
|||
Interest
paid
|
$
|
13,324
|
$
|
-
|
Current
assets
|
$
|
11,412,049
|
||
Furniture
and equipment
|
289,333
|
|||
Other
assets
|
399,251
|
|||
Goodwill
and other intangibles
|
7,846,922
|
|||
Total
acquired assets
|
19,947,555
|
|||
Current
liabilities assumed
|
8,911,245
|
|||
Long
term deferred tax liability
|
932,280
|
|||
Total
acquired liabilities
|
9,843,525
|
|||
Net
assets acquired
|
$
|
10,104,030
|
Three
Months ended March 31,
|
|||||||
2006
|
2005
|
||||||
Total
revenue
|
$
|
11,843
|
$
|
12,566
|
|||
Loss
from continuing operations
|
(127
|
)
|
(7
|
)
|
|||
Net
(loss)
|
(27
|
)
|
(6
|
)
|
|||
Earnings
per share:
|
|||||||
Basic
|
$
|
0.00
|
$
|
0.00
|
2006
|
||||
Dividend
yield
|
None
|
|||
Expected
volatility
|
117
|
%
|
||
Average
risk free interest rate
|
3.73
|
%
|
||
Average
expected lives
|
5.00
years
|
Three
months ended March 31,
|
Change
|
||||||||||||
2006
|
2005
|
Amount
|
Percent
|
||||||||||
Net
loss
|
$
|
(27
|
)
|
$
|
(6
|
)
|
$
|
(21
|
)
|
NM
|
|||
Income
tax expense (benefit) note 5
|
(102
|
)
|
(3
|
)
|
(99
|
)
|
NM
|
||||||
Interest
expense
|
2
|
2
|
-
|
-
|
|||||||||
Depreciation
and amortization
|
206
|
199
|
7
|
3.5
|
%
|
||||||||
EBITDA
(Earnings before interest, taxes, depreciation and
amortization)
|
$
|
79
|
$
|
192
|
$
|
(113
|
)
|
-58.9
|
%
|
||||
Stock
Options and other non-cash costs
|
43
|
-
|
43
|
100
|
%
|
||||||||
Adjusted
EBITDA
|
$
|
122
|
$
|
192
|
$
|
(70
|
)
|
-36.5
|
%
|
Three
months ended March 31,
|
Change
|
||||||||||||
2006
|
2005
|
Amount
|
Percent
|
||||||||||
Transportation
revenue
|
$
|
11,843
|
$
|
12,566
|
$
|
(723
|
)
|
-5.8
|
%
|
||||
Cost
of transportation
|
7,480
|
7,330
|
(150
|
)
|
-2.0
|
%
|
|||||||
Net
transportation revenue
|
$
|
4,363
|
$
|
5,236
|
$
|
(873
|
)
|
-16.7
|
%
|
||||
Net
transportation margins
|
36.8
|
%
|
41.7
|
%
|
Three
months ended March 31,
|
||||||||||||||||||
2006
|
2005
|
Change
|
||||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||
Net
transportation revenue
|
$
|
4,363
|
100.0
|
%
|
$
|
5,236
|
100.0
|
%
|
$
|
(873
|
)
|
-0.4
|
%
|
|||||
Agent
commissions
|
3,198
|
73.3
|
%
|
3,883
|
74.2
|
%
|
(685
|
)
|
-17.6
|
%
|
||||||||
Personnel
costs
|
639
|
14.6
|
%
|
832
|
15.9
|
%
|
(193
|
)
|
-23.2
|
%
|
||||||||
Other
selling, general and administrative
|
447
|
10.2
|
%
|
328
|
6.3
|
%
|
119
|
36.3
|
%
|
|||||||||
Depreciation
and amortization
|
206
|
4.7
|
%
|
199
|
3.8
|
%
|
7
|
3.5
|
%
|
|||||||||
Total
operating costs
|
4,490
|
102.9
|
%
|
5,243
|
100.1
|
%
|
(753
|
)
|
-14.4
|
%
|
||||||||
Loss
from operations
|
(127
|
)
|
-2.9
|
%
|
(7
|
)
|
-0.1
|
%
|
(120
|
)
|
NM
|
|||||||
Other
expense
|
(2
|
)
|
-0.1
|
%
|
(2
|
)
|
-0.1
|
%
|
0
|
NM
|
||||||||
Loss
before income taxes
|
(129
|
)
|
-.3.0
|
%
|
(9
|
)
|
-0.2
|
%
|
(120
|
)
|
NM
|
|||||||
Income
tax expense (benefit)
|
(102
|
)
|
-2.4
|
%
|
(3
|
)
|
-0.1
|
%
|
(99
|
)
|
NM
|
|||||||
Net
loss
|
$
|
(27
|
)
|
-.6
|
%
|
$
|
(6
|
)
|
-0.1
|
%
|
$
|
(21
|
)
|
NM
|
Date
|
Shares
Sold
|
Gross
Proceeds
|
Price
Per Share
|
●
October 2005
|
2,272,728
|
$
1.0 million
|
$
0.44
|
●
December 2005
|
10,098,934
|
$
4.4 million
|
$
0.44
|
●
January 2006
|
1,009,093
|
$
444,000
|
$
0.44
|
●
February 2006
|
1,446,697
|
$
645,000
|
$
0.44
|
|
|
|
Fiscal
Year Ended June 30,
|
||||||||||||||||
|
2007
|
2008
|
2009
|
2010
|
2011
|
Total
|
|||||||||||||
Earn-out
payments:
|
|||||||||||||||||||
Cash
|
$
|
600(2)
|
|
$
|
500
|
$
|
--
|
$
|
--
|
$
|
--
|
$
|
1,100
|
||||||
Equity
|
633
|
633
|
634
|
1,900
|
|||||||||||||||
Total
earn-out Payments
|
$
|
600
|
$
|
1,133
|
$
|
633
|
$
|
634
|
$
|
--
|
$
|
3,000
|
|||||||
|
|||||||||||||||||||
Prior
year earnings targets (income from continuing operations) (3)
|
|||||||||||||||||||
Total
earnings targets
|
$
|
--
|
$
|
2,500
|
$
|
2,500
|
$
|
2,500
|
$
|
--
|
$
|
7,500
|
|||||||
Earn-outs
as a percentage of prior year earnings targets:
|
|||||||||||||||||||
Total
|
--
|
45.3
|
%
|
25.3
|
%
|
25.3
|
%
|
-- |
40.0
|
%
|
(1)
|
During
the fiscal year 2007-2011 earn-out period, there is an additional
contingent obligation related to tier-two earn-outs that could be
as much
as $1.5 million if Airgroup generates at least $18.0 million in income
from continuing operations during the period.
|
|
|
(2)
|
Payable
in cash on the one-year anniversary of the closing, so long as at
least 31
of Airgroup’s agent operations remain operational through the first
anniversary of the closing.
|
(3)
|
Income
from continuing operations as presented here identifies the uniquely
defined earnings targets of Airgroup and should not be interpreted
to be
the consolidated income from continuing operations of the Company
which
would give effect for, among other things, amortization or impairment
of
intangible assets or various other expenses which may not be charged
to
Airgroup for purposes of calculating
earn-outs.
|
Exhibit
No.
|
|
Exhibit
|
|
Method
of Filing
|
31.1
|
|
Certification
by Principal Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
|
Filed
herewith
|
31.2
|
Certification
by Principal Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
Filed
herewith
|
||
32.1
|
|
Certification
by the Principal Executive Officer and Principal Financial Officer
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of
the Sarbanes-Oxley Act of 2002
|
|
Filed
herewith
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99.1
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Press
Release dated May 16, 2006
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RADIANT
LOGISTICS, INC.
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Date:
May 16, 2006
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/s/
Bohn H. Crain
Bohn
H. Crain
Chief
Executive Officer
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Exhibit
No.
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Exhibit
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31.1
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Certification
by Principal Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
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31.2
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Certification
by Principal Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
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32.1
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Certification
by Principal Executive Officer/Principal Financial Officer pursuant
to
Section 906 of the Sarbanes-Oxley Act of 2002
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99.1
|
Press
Release dated May 16, 2006
|