Delaware
|
04-3625550
|
|
(State
or other jurisdiction of
|
(IRS
Employer Identification Number)
|
|
incorporation
or organization)
|
Title
of Each Class
|
Name
of Exchange on which Registered
|
|
|
|
|
Common
Stock, $.001 Par Value
|
None
|
Large
accelerated filer o
|
Accelerated
filer o
|
Non-accelerated
filer x
|
TABLE
OF CONTENTS
|
||
PART
I
|
||
ITEM
1.
|
BUSINESS
|
2
|
ITEM
1A.
|
RISK
FACTORS
|
9
|
ITEM
2.
|
PROPERTIES
|
17
|
ITEM
3.
|
LEGAL
PROCEEDINGS
|
18
|
ITEM
4.
|
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
|
18
|
PART
II
|
||
ITEM
5.
|
MARKET
FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
|
|
MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
|
19
|
|
ITEM
6.
|
SELECTED
FINANCIAL DATA
|
20
|
ITEM
7.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
|
RESULTS
OF OPERATIONS
|
23
|
|
ITEM
7A.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
46
|
ITEM
8.
|
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
|
46
|
ITEM
9.
|
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS
|
|
ON
ACCOUNTING AND FINANCIAL DISCLOSURES
|
46
|
|
ITEM
9A.
|
CONTROLS
AND PROCEDURES
|
46
|
ITEM
9B
|
OTHER
INFORMATION
|
46
|
PART
III
|
||
ITEM
10.
|
DIRECTORS
AND EXECUTIVE OFFICERS OF THE REGISTRANT
|
46
|
ITEM
11.
|
EXECUTIVE
COMPENSATION
|
49
|
ITEM
12.
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
|
|
AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
56
|
|
ITEM
13.
|
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS AND
|
|
DIRECTOR
INDEPENDENCE
|
57
|
|
ITEM
14.
|
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
|
59
|
ITEM
15.
|
EXHIBITS
|
60
|
Signatures
|
61
|
|
Financial
Statements
|
F-1
|
· |
Outsourcing
of non-core activities.
Companies increasingly outsource freight forwarding, warehousing
and other
supply chain activities to allow them to focus on their respective
core
competencies. From managing purchase orders to the timely delivery
of
products, companies turn to third party logistics providers to manage
these functions at a lower cost and greater efficiency.
|
· |
Globalization
of trade.
As barriers to international trade are reduced or substantially
eliminated, international trade is increasing. In addition, companies
increasingly are sourcing their parts, supplies and raw materials
from the
most cost competitive suppliers throughout the world. Outsourcing
of
manufacturing functions to, or locating company-owned manufacturing
facilities in, low cost areas of the world also results in increased
volumes of world trade.
|
· |
Increased
need for time-definite delivery.
The need for just-in-time and other time-definite delivery has increased
as a result of the globalization of manufacturing, greater implementation
of demand-driven supply chains, the shortening of product cycles
and the
increasing value of individual shipments. Many businesses recognize
that
increased spending on time-definite supply chain management services
can
decrease overall manufacturing and distribution costs, reduce capital
requirements and allow them to manage their working capital more
efficiently by reducing inventory levels and inventory
loss.
|
· |
Consolidation
of global logistics providers.
Companies are decreasing the number of freight forwarders and supply
chain
management providers with which they interact. We believe companies
want
to transact business with a limited number of providers that are
familiar
with their requirements, processes and procedures, and can function
as
long-term partners. In addition, there is strong pressure on national
and
regional freight forwarders and supply chain management providers
to
become aligned with a global network. Larger freight forwarders and
supply
chain management providers benefit from economies of scale which
enable
them to negotiate reduced transportation rates and to allocate their
overhead over a larger volume of transactions. Globally integrated
freight
forwarders and supply chain management providers are better situated
to
provide a full complement of services, including pick-up and delivery,
shipment via air, sea and/or road transport, warehousing and distribution,
and customs brokerage.
|
· |
Increasing
influence of e-business and the internet.
Technology advances have allowed businesses to connect electronically
through the Internet to obtain relevant information and make purchase
and
sale decisions on a real-time basis, resulting in decreased transaction
times and increased business-to-business activity. In response to
their
customers' expectations, companies have recognized the benefits of
being
able to transact business electronically. As such, businesses increasingly
are seeking the assistance of supply chain service providers with
sophisticated information technology systems that can facilitate
real-time
transaction processing and web-based shipment
monitoring.
|
· |
the
highly fragmented composition of our
market;
|
· |
our
strategy for creating an organization with global reach should enhance
an
acquired target company’s ability to compete in its local and regional
markets through an expansion of offered services 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 should enable us to effectively
manage
our growth and integration of acquired
companies;
|
· |
our
status as a public corporation may ultimately provide us with a liquid
trading currency for acquisitions;
and
|
· |
the
ability to utilize our experienced management to identify, acquire
and
integrate acquisition
opportunities.
|
· |
Non-asset
based business model.
With relatively no dedicated or fixed operating costs, we are able
to leverage our network of exclusive agency offices and offer competitive
pricing and flexible solutions to our customers. Moreover, our
balanced product offering provides us with revenue streams from multiple
sources and enables us to retain customers even as they shift from
priority to deferred shipments of their products. We believe our
model allows us to provide low-cost solutions to our customers while
also
generating revenues from multiple modes of transportation and logistics
services.
|
· |
Intention
to develop a Global network.
We intend to focus on expanding our network on a global basis. Once
accomplished, this will enable us to provide a closed-loop logistics
chain
to our customers worldwide. Within North America, our capabilities
consist of our pick up and delivery network, ground and air networks,
and
logistics capabilities. Our ground and pick up and delivery networks
enable us to service the growing deferred forwarding market while
providing the domestic connectivity for international shipments once
they
reach North America. In addition, our heavyweight air network
provides for competitive costs on shipments, as we have no dedicated
charters or leases and can capitalize on available capacity in the
market
to move our customers’ goods.
|
· |
Information
technology resources.
A primary component of our business strategy is the continued
development of advanced information systems to continually provide
accurate and timely information to our management and customers.
Our
customer delivery tools enable connectivity with our customers’ and
trading partners’ systems, which leads to more accurate and up-to-date
information on the status of shipments.
|
· |
Diverse
customer base.
We have a well diversified base of customers that includes
manufacturers, distributors and retailers. As of the date of this
Report,
no single customer represented more than 5% of our business reducing
risks
associated with any particular industry or customer concentration.
|
·
|
a
failure to agree on the terms necessary for a transaction, such as
the
amount of the
purchase
price;
|
|
·
|
incompatibility
between our operational strategies and management philosophies and
those
of the potential acquiree;
|
|
·
|
competition
from other acquirers of operating companies;
|
|
·
|
a
lack of sufficient capital to acquire a profitable logistics company;
and
|
|
·
|
the
unwillingness of a potential acquiree to work with our
management.
|
·
|
difficulties
in integrating operations, technologies, services and
personnel;
|
|
·
|
the
diversion of financial and management resources from existing
operations;
|
|
·
|
the
risk of entering new markets;
|
|
·
|
the
potential loss of key employees; and
|
|
·
|
the
inability to generate sufficient revenue to offset acquisition or
investment costs.
|
High
|
Low
|
||||||
Twelve Months Ended June 30, 2007: | |||||||
Quarter
ended June 30, 2007
|
$
|
.66
|
$
|
.47
|
|||
Quarter
ended March 31, 2007
|
.80
|
.51
|
|||||
Quarter
ended December 31, 2006
|
.70
|
.55
|
|||||
Quarter
ended September 30, 2006
|
1.05
|
.85
|
|||||
Six
Months Ended June 30, 2006 (Transition Period):
|
|||||||
Quarter
ended June 30, 2006
|
$
|
1.05
|
$
|
.85
|
|||
Quarter
ended March 31, 2006
|
1.05
|
.95
|
|||||
Year
Ended December 31, 2005:
|
|||||||
Quarter
ended December 31, 2005
|
$
|
1.05
|
$
|
.95
|
Plan
Category
|
Number
of securities to
be
issued upon exercise
of
outstanding warrants
and
rights
(a)
|
Weighted-average
exercise
price of
outstanding
options,
warrants
and rights
(b)
|
Number
of securities
remaining
available for
future
issuance under
equity
compensation
plans
(excluding
securities
reflected in
column
(a)(c)
|
Equity
Compensation
Plans
approved by
security
holders
|
0
|
--
|
0
|
Equity
compensation
plans
not approved by
security
holders
|
3,150,000
|
$0.605
|
1,850,000
|
Total
|
3,150,000
|
$0.605
|
1,850,000
|
Historic
Twelve
Months Ended June 30,
|
|||||||
2007
|
2006
(unaudited)
|
||||||
Consolidated
Statement Of Operations Data: (In Thousands, Except Per Share
Amounts)
|
|||||||
Total
revenue
|
$
|
75,527
|
$
|
26,469
|
|||
Cost
of transportation
|
48,813
|
16,966
|
|||||
|
|||||||
Net
revenue
|
26,714
|
9,503
|
|||||
Operating
expenses
|
26,301
|
9,597
|
|||||
|
|||||||
Income
(loss) from operations
|
413
|
(94
|
)
|
||||
Other
income (expense)
|
(49
|
)
|
-
|
||||
|
|||||||
Income
(loss) before income taxes
|
364
|
(94
|
)
|
||||
Income
tax expense (benefit)
|
156
|
(39
|
)
|
||||
|
|||||||
Income
(loss) before minority interest
|
208
|
(55
|
)
|
||||
Minority
interest
|
45
|
-
|
|||||
Net
income (loss)
|
$
|
163
|
$
|
(55
|
)
|
||
|
|||||||
Net
income (loss) per common share (1)
:
|
|||||||
Basic
|
$
|
-
|
$
|
-
|
|||
Diluted
|
$
|
-
|
$
|
-
|
|||
Weighted
average common shares:
|
|||||||
Basic
shares outstanding
|
33,883
|
30,071
|
|||||
Diluted shares
outstanding
|
34,325
|
30,071
|
(1)
|
For
all periods presented, the weighted average common shares outstanding
have
been adjusted to reflect 3.5:1 stock split effected in October of
2005.
|
As
of June 30,
|
|||||||
2007
|
2006
|
||||||
Consolidated
Balance Sheet Data (In Thousands)
|
|||||||
Cash
and cash equivalents
|
$
|
720
|
$
|
511
|
|||
Working
capital
|
779
|
1,985
|
|||||
Total
assets
|
25,024
|
17,045
|
|||||
Long-term
debt
|
1,974
|
2,470
|
|||||
Stockholders'
equity
|
7,044
|
6,334
|
Selected
Financial
Data
|
||||||||||||||||
Six
Months
Ended
June
30,
|
------------Twelve
month ended December
31, -------------
|
|||||||||||||||
2006
|
2005
|
2004
|
2003
|
2002
|
||||||||||||
Consolidated
Statement Of
Operations
Data: (In Thousands,
Except
Per Share Amounts)
|
||||||||||||||||
Total
revenue
|
$
|
26,469
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||
Cost
of transportation
|
16,966
|
—
|
—
|
—
|
—
|
|||||||||||
|
||||||||||||||||
Net
revenue
|
9,503
|
—
|
—
|
—
|
—
|
|||||||||||
Operating
expenses
|
9,457
|
162
|
23
|
30
|
124
|
|||||||||||
|
||||||||||||||||
Income
(loss) from operations
|
46
|
(162
|
)
|
(23
|
)
|
(30
|
)
|
(124
|
)
|
|||||||
Other
income (expense)
|
(14
|
)
|
13
|
(2
|
)
|
—
|
—
|
|||||||||
|
||||||||||||||||
Income
(loss) from continuing
operations
before income tax expense
|
32
|
(149
|
)
|
(25
|
)
|
(30
|
)
|
(124
|
)
|
|||||||
Income
tax (benefit)
|
(39
|
)
|
—
|
—
|
—
|
—
|
||||||||||
|
||||||||||||||||
Net
income (loss)
|
$
|
71
|
$
|
(149
|
)
|
$
|
(25
|
)
|
$
|
(30
|
)
|
$
|
(124
|
)
|
||
|
||||||||||||||||
Net
income (loss) per common share:
|
||||||||||||||||
Basic
|
$
|
—
|
$
|
(0.01
|
)
|
$
|
0.00
|
$
|
0.00
|
$
|
(0.01
|
)
|
||||
Diluted
|
$
|
—
|
$
|
(0.01
|
)
|
$
|
0.00
|
$
|
0.00
|
$
|
(0.01
|
)
|
||||
Weighted
average common shares (1) :
|
||||||||||||||||
Basic
|
33,186
|
26,490
|
25,964
|
25,964
|
22,424
|
|||||||||||
Diluted
|
34,585
|
26,490
|
25,964
|
25,964
|
22,424
|
(1)
|
For
all periods presented, the weighted average common shares outstanding
have
been adjusted to reflect 3.5:1 stock split effected in October of
2005.
|
|
||||||||||||||||
June
30,
|
-----------------------December
31, -----------------------
|
|||||||||||||||
Consolidate
Balance Sheet Data (In
Thousands)
|
||||||||||||||||
2006
|
2005
|
2004
|
2003
|
2002
|
||||||||||||
Cash
and cash equivalents
|
$
|
511
|
$
|
5,266
|
$
|
19
|
$
|
51
|
$
|
27
|
||||||
Working
capital
|
1,985
|
5,143
|
17
|
42
|
20
|
|||||||||||
Total
assets
|
17,045
|
5,307
|
19
|
51
|
27
|
|||||||||||
Long-term
debt
|
2,470
|
—
|
50
|
50
|
—
|
|||||||||||
Stockholders'
equity
|
$
|
6,334
|
$
|
5,159
|
$
|
(33
|
)
|
$
|
(8
|
)
|
$
|
20
|
Pro
Forma and
unaudited
Years
Ended
June
30,
|
|||||||
Consolidated
Statement Of Operations Data: (In Thousands, Except Per
Share
Amounts)
|
2007
|
2006
|
|||||
Total
revenue
|
$
|
75,527
|
$
|
54,580
|
|||
Cost
of transportation
|
48,813
|
35,192
|
|||||
|
|||||||
Net
revenue
|
26,714
|
19,388
|
|||||
Operating
expenses
|
26,301
|
19,175
|
|||||
|
|||||||
Income
from operations
|
413
|
213
|
|||||
Other
income (expense)
|
(49
|
)
|
(22
|
)
|
|||
|
|||||||
Income
before income taxes
|
364
|
191
|
|||||
Income
tax expense
|
156
|
217
|
|||||
|
|||||||
Income
(loss) before minority interest
|
208
|
(26
|
)
|
||||
Minority
interest
|
45
|
-
|
|||||
Net
income (loss)
|
$
|
163
|
$
|
(26
|
)
|
||
|
|||||||
Net
income (loss) per common share (1)
:
|
|||||||
Basic
|
$
|
-
|
$
|
-
|
|||
Diluted
|
$
|
-
|
$
|
-
|
|||
Weighted
average common shares:
|
|||||||
Basic
shares outstanding
|
33,883
|
30,071
|
|||||
Diluted shares
outstanding
|
34,325
|
30,607
|
(1)
|
For
all periods presented, the weighted average common shares outstanding
have
been adjusted to reflect 3.5:1 stock split effected in October of
2005.
|
Twelve
months ended June 30,
|
Change
|
||||||||||||
2007
|
2006
|
Amount
|
Percent
|
||||||||||
Net
income (loss)
|
$
|
163
|
$
|
(55
|
)
|
$
|
218
|
NM
|
|||||
Income
tax expense (benefit)
|
156
|
(39
|
)
|
195
|
NM
|
||||||||
Net
interest expense
|
6
|
(3
|
)
|
9
|
NM
|
||||||||
Depreciation
and amortization
|
830
|
423
|
407
|
NM
|
|||||||||
|
|||||||||||||
EBITDA
(Earnings before interest,
taxes,
depreciation and amortization)
|
$
|
1,155
|
$
|
326
|
$
|
829
|
NM
|
||||||
|
|||||||||||||
Share
based compensation and other non-cash costs
|
257
|
115
|
142
|
NM
|
|||||||||
Adjusted
EBITDA
|
$
|
1,412
|
$
|
441
|
$
|
971
|
NM
|
|
Change
|
||||||||||||
Twelve
months ended
June
30, 2007
|
Six
months ended
June
30, 2006
|
Amount
|
Percent
|
||||||||||
Net
income
|
$
|
163
|
$
|
71
|
$
|
92
|
NM
|
||||||
Income
tax expense (benefit)
|
156
|
(39
|
)
|
195
|
NM
|
||||||||
Net
interest (income) expense
|
6
|
11
|
(5
|
)
|
NM
|
||||||||
Depreciation
and amortization
|
830
|
423
|
407
|
NM
|
|||||||||
|
|||||||||||||
EBITDA
(Earnings before interest,
taxes,
depreciation and amortization)
|
$
|
1,155
|
$
|
466
|
$
|
689
|
NM
|
||||||
|
|||||||||||||
Share
based compensation and other non-cash costs
|
257
|
86
|
171
|
NM
|
|||||||||
Adjusted
EBITDA
|
$
|
1,412
|
$
|
552
|
$
|
860
|
NM
|
Six
months ended June 30,
|
Change
|
||||||||||||
2006
|
2005
|
Amount
|
Percent
|
||||||||||
Net
income (loss)
|
$
|
71
|
$
|
(23
|
)
|
$
|
94
|
NM
|
|||||
Income
tax expense (benefit)
|
(39
|
)
|
-
|
(39
|
)
|
NM
|
|||||||
Net
interest expense
|
11
|
1
|
10
|
NM
|
|||||||||
Depreciation
and amortization
|
423
|
-
|
423
|
NM
|
|||||||||
|
|||||||||||||
EBITDA
(Earnings before interest,
taxes,
depreciation and amortization)
|
$
|
466
|
$
|
(22
|
)
|
$
|
488
|
NM
|
|||||
|
|||||||||||||
Share
based compensation and other non-cash costs
|
86
|
-
|
86
|
NM
|
|||||||||
Adjusted
EBITDA
|
$
|
552
|
$
|
(22
|
)
|
$
|
574
|
NM
|
|
|
Change
|
|||||||||||
Six
months ended
June
30, 2006
|
Year
ended
Dec.
31,
2005
|
Amount
|
Percent
|
||||||||||
Net
income (loss)
|
$
|
71
|
$
|
(149
|
)
|
$
|
220
|
NM
|
|||||
Income
tax (benefit)
|
(39
|
)
|
-
|
(39
|
)
|
NM
|
|||||||
Net
iInterest (income) expense
|
11
|
(13
|
)
|
24
|
NM
|
||||||||
Depreciation
and amortization
|
423
|
-
|
423
|
NM
|
|||||||||
|
|||||||||||||
EBITDA
(Earnings before interest,
taxes,
depreciation and amortization)
|
$
|
466
|
$
|
(162
|
)
|
$
|
628
|
NM
|
|||||
|
|||||||||||||
Share
based compensation and other
non-cash
costs
|
86
|
-
|
86
|
NM
|
|||||||||
Adjusted
EBITDA
|
$
|
552
|
$
|
(162
|
)
|
$
|
714
|
NM
|
Twelve
months ended June
30,
|
Change
|
||||||||||||
2007
|
2006
|
Amount
|
Percent
|
||||||||||
Transportation
revenue
|
$
|
75,527
|
$
|
26,469
|
$
|
49,058
|
185.3
|
%
|
|||||
Cost
of transportation
|
48,813
|
16,966
|
31,847
|
187.7
|
%
|
||||||||
|
|||||||||||||
Net
transportation revenue
|
$
|
26,714
|
$
|
9,503
|
$
|
17,211
|
181.1
|
%
|
|||||
Net
transportation margins
|
35.4
|
%
|
35.9
|
%
|
35.1
|
%
|
Twelve
months ended June 30,
|
|||||||||||||||||||
2007
|
2006
|
Change
|
|||||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
||||||||||||||
Net
transportation revenue
|
$
|
26,714
|
100.0
|
%
|
$
|
9,503
|
100.0
|
%
|
$
|
17,211
|
181.1
|
%
|
|||||||
|
|||||||||||||||||||
Agent
commissions
|
20,048
|
75.1
|
%
|
7,037
|
74.1
|
%
|
13,011
|
184.9
|
%
|
||||||||||
Personnel
costs
|
2,916
|
10.9
|
%
|
1,209
|
12.7
|
%
|
1,707
|
141.2
|
%
|
||||||||||
Other
selling, general and administrative
|
2,507
|
9.4
|
%
|
928
|
9.7
|
%
|
1,579
|
170.2
|
%
|
||||||||||
Depreciation
and amortization
|
830
|
3.1
|
%
|
423
|
4.5
|
%
|
407
|
96.2
|
%
|
||||||||||
|
|||||||||||||||||||
Total
operating costs
|
26,301
|
98.5
|
%
|
9,597
|
101.0
|
%
|
16,704
|
174.1
|
%
|
||||||||||
|
|||||||||||||||||||
Income
(loss) from operations
|
413
|
1.5
|
%
|
(94
|
)
|
-1.0
|
%
|
507
|
539.4
|
%
|
|||||||||
Other
expense
|
(49
|
)
|
-0.1
|
%
|
-
|
-
|
(49
|
)
|
NM
|
||||||||||
|
|||||||||||||||||||
Income
(loss) before income taxes and minority interest
|
364
|
1.4
|
%
|
(94
|
)
|
1.0
|
%
|
458
|
487.2
|
%
|
|||||||||
Income
tax expense (benefit)
|
156
|
0.6
|
%
|
(39
|
)
|
-0.4
|
%
|
195
|
500.0
|
%
|
|||||||||
|
|||||||||||||||||||
Income
(loss) before minority interest
|
208
|
.8
|
%
|
(55
|
)
|
-.6
|
%
|
263
|
478.2
|
%
|
|||||||||
Minority
interest
|
45
|
.2
|
%
|
-
|
-
|
45
|
NM
|
||||||||||||
Net
income (loss)
|
$
|
163
|
.6
|
%
|
$
|
(55
|
)
|
-.6
|
%
|
$
|
218
|
396.4
|
%
|
Twelve
months ended June 30,
|
Change
|
||||||||||||
2007
|
2006
|
Amount
|
Percent
|
||||||||||
Net
income (loss)
|
$
|
163
|
$
|
(26
|
)
|
$
|
189
|
NM
|
|||||
Income
tax expense
|
156
|
217
|
(61
|
)
|
-28.1
|
%
|
|||||||
Net
interest expense (benefit)
|
6
|
(9
|
)
|
15
|
NM
|
||||||||
Depreciation
and amortization
|
830
|
793
|
37
|
4.7
|
%
|
||||||||
|
|||||||||||||
EBITDA
(Earnings before interest, taxes,
depreciation
and amortization)
|
$
|
1,155
|
$
|
975
|
$
|
180
|
18.5
|
%
|
|||||
|
|||||||||||||
Share
based compensation and other non-cash costs
|
257
|
86
|
171
|
198.8
|
%
|
||||||||
Adjusted
EBITDA
|
$
|
1,412
|
$
|
1,061
|
$
|
351
|
33.1
|
%
|
Twelve
months ended June
30,
|
Change
|
||||||||||||
2007
|
2006
|
Amount
|
Percent
|
||||||||||
Transportation
revenue
|
$
|
75,527
|
$
|
54,580
|
$
|
20,947
|
38.4
|
%
|
|||||
Cost
of transportation
|
48,813
|
35,192
|
13,621
|
38.7
|
%
|
||||||||
|
|||||||||||||
Net
transportation revenue
|
$
|
26,714
|
$
|
19,388
|
$
|
7,326
|
37.8
|
%
|
|||||
Net
transportation margins
|
35.4
|
%
|
35.5
|
%
|
-
|
Twelve
months ended June 30,
|
|||||||||||||||||||
2007
|
2006
|
Change
|
|||||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
||||||||||||||
Net
transportation revenue
|
$
|
26,714
|
100.0
|
%
|
$
|
19,388
|
100.0
|
%
|
$
|
7,326
|
37.8
|
%
|
|||||||
|
|||||||||||||||||||
Agent
commissions
|
20,048
|
75.1
|
%
|
14,341
|
74.0
|
%
|
5,707
|
39.8
|
%
|
||||||||||
Personnel
costs
|
2,916
|
10.9
|
%
|
2,313
|
11.9
|
%
|
603
|
26.1
|
%
|
||||||||||
Other
selling, general and administrative
|
2,507
|
9.4
|
%
|
1,728
|
8.9
|
%
|
779
|
45.1
|
%
|
||||||||||
Depreciation
and amortization
|
830
|
3.1
|
%
|
793
|
4.1
|
%
|
37
|
4.7
|
%
|
||||||||||
|
|||||||||||||||||||
Total
operating costs
|
26,301
|
98.5
|
%
|
19,175
|
98.9
|
%
|
7,126
|
37.2
|
%
|
||||||||||
|
|||||||||||||||||||
Income
from operations
|
413
|
1.5
|
%
|
213
|
1.1
|
%
|
200
|
93.9
|
%
|
||||||||||
Other
expense
|
(49
|
)
|
-0.1
|
%
|
(22
|
)
|
-.8
|
%
|
(27
|
)
|
122.7
|
%
|
|||||||
|
|||||||||||||||||||
Income
before income taxes and minority interest
|
364
|
1.4
|
%
|
191
|
1.0
|
%
|
173
|
90.6
|
%
|
||||||||||
Income
tax expense (benefit)
|
156
|
0.6
|
%
|
217
|
1.0
|
%
|
(61
|
)
|
-28.1
|
%
|
|||||||||
|
|||||||||||||||||||
Income
before minority interest
|
208
|
.8
|
%
|
(26
|
)
|
0.0
|
%
|
234
|
NM
|
||||||||||
Minority
interest
|
45
|
.2
|
%
|
-
|
-
|
45
|
NM
|
||||||||||||
Net
income (loss)
|
$
|
163
|
.6
|
%
|
$
|
(26
|
)
|
0.0
|
%
|
$
|
289
|
NM
|
Six
months ended June 30,
|
Change
|
||||||||||||
2006
|
2005
|
Amount
|
Percent
|
||||||||||
Transportation
revenue
|
$
|
26,469
|
$
|
-
|
$
|
26,469
|
NM
|
||||||
Cost
of transportation
|
16,966
|
-
|
16,966
|
NM
|
|||||||||
|
|||||||||||||
Net
transportation revenue
|
$
|
9,503
|
$
|
-
|
$
|
9,503
|
NM
|
||||||
Net
transportation margins
|
35.9
|
%
|
-
|
35.9
|
%
|
NM
|
Six
months ended June 30,
|
Change
|
||||||||||||||||||
2006
|
2005
|
||||||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
||||||||||||||
Net
transportation revenue
|
$
|
9,503
|
100.0
|
%
|
$
|
-
|
NM
|
$
|
9,503
|
NM
|
|||||||||
|
|||||||||||||||||||
Agent
commissions
|
7,037
|
74.1
|
%
|
-
|
NM
|
7,037
|
NM
|
||||||||||||
Personnel
costs
|
1,154
|
12.1
|
%
|
-
|
NM
|
1,154
|
NM
|
||||||||||||
Other
selling, general and
administrative
|
843
|
8.8
|
%
|
22
|
NM
|
821
|
NM
|
||||||||||||
Depreciation
and amortization
|
423
|
4.5
|
%
|
-
|
NM
|
423
|
NM
|
||||||||||||
|
|||||||||||||||||||
Total
operating costs
|
9,457
|
99.5
|
%
|
22
|
NM
|
9,435
|
NM
|
||||||||||||
|
|||||||||||||||||||
Income
(loss) from operations
|
46
|
0.5
|
%
|
(22
|
)
|
NM
|
68
|
NM
|
|||||||||||
Other
expense
|
(14
|
)
|
-0.2
|
%
|
(1
|
)
|
NM
|
(13
|
)
|
NM
|
|||||||||
|
|||||||||||||||||||
Income
(loss) before income taxes
|
32
|
0.3
|
%
|
(23
|
)
|
NM
|
55
|
NM
|
|||||||||||
Income
tax (benefit)
|
(39
|
)
|
-0.4
|
%
|
-
|
NM
|
(39
|
)
|
NM
|
||||||||||
|
|||||||||||||||||||
Net
income (loss)
|
$
|
71
|
.7
|
%
|
$
|
(23
|
)
|
NM
|
$
|
94
|
NM
|
Six
months ended June 30,
|
Change
|
||||||||||||
2006
|
2005
|
Amount
|
Percent | ||||||||||
Net
income (loss)
|
$
|
71
|
$
|
(11
|
)
|
$
|
82
|
NM
|
|||||
Income
tax (benefit)
|
(39
|
)
|
(7
|
)
|
(32
|
)
|
NM
|
||||||
Interest
expense (benefit)
|
11
|
(13
|
)
|
24
|
-
|
||||||||
Depreciation
and amortization
|
423
|
397
|
26
|
6.5
|
%
|
||||||||
|
|||||||||||||
EBITDA
(Earnings before interest, taxes, depreciation and
amortization)
|
$
|
466
|
$
|
366
|
$
|
100
|
27.3
|
%
|
|||||
|
|||||||||||||
Share
based compensation and other non-cash costs
|
86
|
-
|
86
|
NM
|
%
|
||||||||
Adjusted
EBITDA
|
$
|
552
|
$
|
366
|
$
|
186
|
50.8
|
%
|
Six
months ended June 30,
|
Change
|
||||||||||||
2006
|
2005
|
Amount
|
Percent
|
||||||||||
Transportation
revenue
|
$
|
26,469
|
$
|
27,603
|
$
|
(1,134
|
)
|
-4.1
|
%
|
||||
Cost
of transportation
|
16,966
|
16,696
|
270
|
1.6
|
%
|
||||||||
|
|||||||||||||
Net
transportation revenue
|
$
|
9,503
|
$
|
10,907
|
$
|
(1,404
|
)
|
-12.9
|
%
|
||||
Net
transportation margins
|
35.9
|
%
|
39.5
|
%
|
-
|
Six
months ended June 30,
|
|||||||||||||||||||
2006
|
2005
|
Change
|
|||||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
||||||||||||||
Net
transportation revenue
|
$
|
9,503
|
100.0
|
%
|
$
|
10,907
|
100.0
|
%
|
$
|
(1,404
|
)
|
-12.9
|
%
|
||||||
|
|||||||||||||||||||
Agent
commissions
|
7,037
|
74.1
|
%
|
7,906
|
72.5
|
%
|
(869
|
)
|
-11.0
|
%
|
|||||||||
Personnel
costs
|
1,154
|
12.1
|
%
|
1,946
|
17.8
|
%
|
(792
|
)
|
-40.7
|
%
|
|||||||||
Other
selling, general and administrative
|
843
|
8.8
|
%
|
694
|
6.4
|
%
|
149
|
21.5
|
%
|
||||||||||
Depreciation
and amortization
|
423
|
4.5
|
%
|
397
|
3.6
|
%
|
26
|
6.5
|
%
|
||||||||||
|
|||||||||||||||||||
Total
operating costs
|
9,457
|
99.5
|
%
|
10,943
|
100.3
|
%
|
(1,486
|
)
|
-13.6
|
%
|
|||||||||
|
|||||||||||||||||||
Income
(loss) from operations
|
46
|
0.5
|
%
|
(36
|
)
|
-0.3
|
%
|
82
|
227.8
|
%
|
|||||||||
Other
(income)expense
|
(14
|
)
|
-0.2
|
%
|
18
|
0.2
|
%
|
(32
|
)
|
-177.8
|
%
|
||||||||
|
|||||||||||||||||||
Income
(loss) before income taxes
|
32
|
0.3
|
%
|
(18
|
)
|
-0.1
|
%
|
50
|
277.8
|
%
|
|||||||||
Income
tax (benefit)
|
(39
|
)
|
-0.4
|
%
|
(7
|
)
|
-0.0
|
%
|
(32
|
)
|
NM
|
||||||||
|
|||||||||||||||||||
Net
income (loss)
|
$
|
71
|
.7
|
%
|
$
|
(11
|
)
|
-0.1
|
%
|
$
|
82
|
NM
|
Year
ended December 31,
|
|||||||||||||||||||
2005
|
2004
|
Change
|
|||||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
||||||||||||||
Net
revenue
|
$
|
-
|
NM
|
$
|
-
|
NM
|
$
|
-
|
NM
|
||||||||||
|
|||||||||||||||||||
Other
selling, general and administrative
|
162
|
NM
|
23
|
NM
|
139
|
NM
|
|||||||||||||
|
|||||||||||||||||||
Total
operating costs
|
162
|
NM
|
23
|
NM
|
139
|
NM
|
|||||||||||||
|
|||||||||||||||||||
Loss
from operations
|
(162
|
)
|
NM
|
(23
|
)
|
NM
|
(139
|
)
|
NM
|
||||||||||
Other
income (expense)
|
13
|
NM
|
(2
|
)
|
NM
|
15
|
NM
|
||||||||||||
|
|||||||||||||||||||
Loss
before income taxes
|
(149
|
)
|
NM
|
(25
|
)
|
NM
|
(124
|
)
|
NM
|
||||||||||
Income
tax expense
|
-
|
NM
|
-
|
NM
|
-
|
NM
|
|||||||||||||
|
|||||||||||||||||||
Net
loss
|
$
|
(149
|
)
|
NM
|
$
|
(25
|
)
|
NM
|
(124
|
)
|
NM
|
Year
ended June 30,
|
Change
|
||||||||||||
2006
|
2005
|
Amount
|
Percent
|
||||||||||
Net
income (loss)
|
$
|
(26
|
)
|
$
|
35
|
$
|
(61
|
)
|
NM
|
%
|
|||
Income
tax expense
|
217
|
19
|
198
|
NM
|
|||||||||
Net
interest income
|
(9
|
)
|
(13
|
)
|
4
|
-23.1
|
%
|
||||||
Depreciation
and amortization
|
793
|
794
|
(1
|
)
|
6.5
|
%
|
|||||||
|
|||||||||||||
EBITDA
(Earnings before interest, taxes,
depreciation and amortization) |
$
|
975
|
$
|
835
|
$
|
140
|
16.8
|
%
|
|||||
|
|||||||||||||
Share
based compensation and other non-cash costs
|
86
|
-
|
86
|
NM
|
%
|
||||||||
Adjusted
EBITDA
|
$
|
1,061
|
$
|
835
|
$
|
226
|
27.1
|
%
|
Year
ended June
30,
|
Change
|
||||||||||||
2006
|
2005
|
Amount
|
Percent
|
||||||||||
Transportation
revenue
|
$
|
54,580
|
$
|
51,521
|
$
|
3,059
|
5.9
|
%
|
|||||
Cost
of transportation
|
35,192
|
29,957
|
5,235
|
17.5
|
%
|
||||||||
|
|||||||||||||
Net
transportation revenue
|
$
|
19,388
|
$
|
21,564
|
$
|
(2,176
|
)
|
-10.1
|
%
|
||||
Net
transportation margins
|
35.5
|
%
|
41.9
|
%
|
Year
ended June
30,
|
|||||||||||||||||||
2006
|
2005
|
Change
|
|||||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
||||||||||||||
Net
transportation revenue
|
$
|
19,388
|
100.0
|
%
|
$
|
21,564
|
100.0
|
%
|
$
|
(2,176
|
)
|
-10.1
|
%
|
||||||
|
|||||||||||||||||||
Agent
commissions
|
14,341
|
74.0
|
%
|
15,988
|
74.1
|
%
|
(1,647
|
)
|
-10.3
|
%
|
|||||||||
Personnel
costs
|
2,313
|
11.9
|
%
|
3,399
|
15.8
|
%
|
(1,086
|
)
|
-32.0
|
%
|
|||||||||
Other
selling, general and administrative
|
1,728
|
8.9
|
%
|
1,342
|
6.2
|
%
|
386
|
28.8
|
%
|
||||||||||
Depreciation
and amortization
|
793
|
4.1
|
%
|
794
|
3.7
|
%
|
(1
|
)
|
-0.1
|
%
|
|||||||||
|
|||||||||||||||||||
Total
operating costs
|
19,175
|
98.9
|
%
|
21,523
|
99.8
|
%
|
(2,348
|
)
|
-10.9
|
%
|
|||||||||
|
|||||||||||||||||||
Income
from operations
|
213
|
1.1
|
%
|
41
|
0.2
|
%
|
172
|
419.5
|
%
|
||||||||||
Other
income (expense)
|
(22
|
)
|
-0.8
|
%
|
13
|
0.1
|
%
|
(35
|
)
|
-269.2
|
%
|
||||||||
|
|||||||||||||||||||
Income
before income taxes
|
191
|
1.0
|
%
|
54
|
0.3
|
%
|
137
|
253.7
|
%
|
||||||||||
Income
tax expense
|
217
|
1.0
|
%
|
19
|
-0.1
|
%
|
198
|
NM
|
%
|
||||||||||
|
|||||||||||||||||||
Net
income
|
$
|
(26
|
)
|
0.0
|
%
|
$
|
35
|
0.2
|
%
|
$
|
(61
|
)
|
NM
|
%
|
Date
|
|
Shares
Sold
|
|
Gross
Proceeds
|
|
Price
Per Share
|
|
|||
●
October 2005
|
|
|
2,272,728
|
|
$
|
1,000,000
|
|
$
|
0.44
|
|
●
December 2005
|
|
|
10,098,934
|
|
$
|
4,400,000
|
|
$
|
0.44
|
|
●
January 2006
|
|
|
1,009,093
|
|
$
|
444,000
|
|
$
|
0.44
|
|
●
February 2006
|
|
|
1,446,697
|
|
$
|
645,000
|
|
$
|
0.44
|
|
2009
|
2010
|
Total
|
||||||||
Earn-out
payments:
|
||||||||||
Cash
|
$
|
—
|
$
|
—
|
$
|
—
|
||||
Equity
|
633
|
634
|
1,267
|
|||||||
Total
potential earn-out payments
|
$
|
633
|
$
|
634
|
$
|
1,267
|
||||
|
||||||||||
Prior
year earnings targets (income from continuing
operations)
(2)
|
||||||||||
|
||||||||||
Total
earnings actual and targets
|
$
|
2,500
|
$
|
2,500
|
$
|
5,000
|
||||
|
||||||||||
Earn-outs
as a percentage of prior year earnings
targets:
|
||||||||||
|
||||||||||
Total
|
25.3
|
%
|
25.3
|
%
|
25.3
|
%
|
|
|
(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)
|
Income
from continuing operations as presented refers to 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 to, 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.
|
Payments
due by period
|
||||||||||||||||
Total
|
Less
than
1
year
|
1-3
years
|
3-5
years
|
More
than
5
years
|
||||||||||||
Contractual
Obligations
|
||||||||||||||||
Long-Term
Debt
|
$
|
2,774
|
$
|
800
|
$
|
1,974
|
$
|
-
|
$
|
-
|
||||||
Capital
Leases
|
-
|
-
|
-
|
-
|
-
|
|||||||||||
Operating
Leases
|
685
|
310
|
373
|
2
|
-
|
|||||||||||
Purchase
Obligations
|
-
|
-
|
-
|
-
|
-
|
|||||||||||
Other
Long-Term Liabilities
|
-
|
-
|
-
|
-
|
-
|
|||||||||||
Total
Contractual Obligations
|
$
|
3,459
|
$
|
1,110
|
$
|
2,347
|
$
|
2
|
$
|
-
|
Name
|
|
Age
|
|
Position
|
|
|
|
|
|
Bohn
H. Crain
|
|
42
|
|
Chief
Executive Officer, Chief Financial Officer and Chairman
|
|
|
|
|
|
Stephen
M. Cohen
|
|
51
|
|
General
Counsel, Secretary and Director
|
|
|
|
|
|
Rodney
Eaton
|
52
|
Vice
President, Chief Accounting Officer and Controller
|
||
William
H. Moultrie
|
|
64
|
|
President
and Chief Operating Officer of Airgroup
|
Daniel
Stegemoller
|
52
|
Vice
President and Chief Operating Officer of Airgroup
|
||
Executive
|
Current
Base Salary
|
Mr.
Crain
|
$250,000
|
Mr.
Eaton
|
$100,000
|
Mr.
Moultrie
|
$120,000
|
Mr.
Stegemoller
|
$180,000
|
Name
and Principal
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
(1)
|
Option
Awards
($)(2)
|
All
other
compen-
sation
($)
|
Total
($)
|
Bohn
H. Crain, Chief
Executive
Officer and
Chief
Financial Officer
|
2007
|
250,000
|
-
|
-
|
-
|
54,401(3)
|
304,401
|
Rodney
Eaton, Vice
President,
Chief
Accounting
Officer and
Controller
|
2007
|
100,000
|
2,500
|
30,300(4)
|
60,013(5)
|
1,936
|
194,749
|
William
Moultrie,
President
of Airgroup
Corporation
|
2007
|
120,000
|
-
|
35,350(4)
|
-
|
6,973
|
162,323
|
Dan
Stegemoller, Vice
President,
Chief
Operating
Officer of
Airgroup
Corporation
|
2007
|
180,000
|
-
|
30,300(4)
|
-
|
60,010(6)
|
270,310
|
|
Name
|
Grant
date
|
All
other
stock
awards:
number
of
shares
of
stock
or
units(#)
|
All
other
option
awards;
number
of
securities
underlying
options
(#)
|
Exercise
or
base
price
of
option
awards
($/Sh)
|
Grant
date
fair
value
of
stock
and
option
awards
($)
|
Rodney
Eaton
|
August
3, 2006
|
-
|
100,000(1)
|
0.74
|
60,013
|
Rodney
Eaton
|
October
3, 2006
|
30,000(2)
|
-
|
-
|
30,300
|
William
Moultrie
|
October
3, 2006
|
35,000(2)
|
-
|
-
|
35,350
|
Dan
Stegemoller
|
October
3, 2006
|
30,000(2)
|
-
|
-
|
30,300
|
Option
Awards
|
||||
Name |
Number
of
securities
underlying
unexercised
options
exercisable(#)
|
Number
of
securities
underlying
unexercised
options
Unexercisable
(#)
|
Option
exercise
price
($)
|
Option
expiration
date
|
Bohn
H. Crain
|
200,000
200,000
|
800,000
800,000
|
0.50
0.75
|
10/20/2015(1)
10/20/2015(1)
|
Rodney
Eaton
|
0
|
100,000
|
0.74
|
8/3/2016(2)
|
William
Moultrie
|
10,000
|
40,000
|
0.44
|
1/11/2016(3)
|
Dan
Stegemoller
|
60,000
|
240,000
|
0.44
|
1/11/2016(3)
|
Stock
awards
|
||
Name
|
Number
of
shares
acquired
on
vesting
(#)
|
Value
realized
on
vesting
($)
|
Rodney
Eaton
|
30,000
|
30,300
|
William
Moultrie
|
35,000
|
35,350
|
Dan
Stegemoller
|
30,000
|
30,300
|
Name(1)
|
All
other
compensation
($)
|
Total
($)
|
Stephen
M. Cohen
|
79,500
|
79,500(2)
|
· |
any
“Person” (as the term “Person” is used in Section 13(d) and Section 14(d)
of the Securities Exchange Act of 1934), except for our chief executive
officer, becoming the beneficial owner, directly or indirectly, of
our
securities representing 50% or more of the combined voting power
of our
then outstanding securities;
|
· |
a
contested proxy solicitation of our stockholders that results in
the contesting party obtaining the ability to vote securities
representing 50% or more of the combined voting power of our
then-outstanding securities;
|
· |
a
sale, exchange, transfer or other disposition of 50% or more in value
of
our assets to another Person or entity, except to an entity controlled
directly or indirectly by us;
|
· |
a
merger, consolidation or other reorganization involving us in which
we are
not the surviving entity and in which our stockholders prior to the
transaction continue to own less than 50% of the outstanding securities
of
the acquirer immediately following the transaction, or a plan involving
our liquidation or dissolution other than pursuant to bankruptcy
or
insolvency laws is adopted; or
|
· |
during
any period of twelve consecutive months, individuals who at the beginning
of such period constituted the board cease for any reason to constitute
at
least the majority thereof unless the election, or the nomination
for
election by our stockholders, of each new director was approved by
a vote
of at least a majority of the directors then still in office who were
directors at the beginning of the
period.
|
Name
of Beneficial Owner
|
Amount(1)
|
Percent
of
Class
|
||
Bohn
H. Crain
|
7,900,000(2)
|
23.0%
|
||
Stephen
M. Cohen
|
2,500,000(3)
|
7.4%
|
||
Rodney
Eaton
|
30,000(4)
|
*
|
||
William
H. Moultrie
|
139,589(5)
|
*
|
||
Dan
Stegemoller
|
158,182(6)
|
*
|
||
Millennium
Global High Yield Fund Limited
64
St. James Street
London,
U.K. SQ1A 1NF
|
2,875,000
|
8.5%
|
||
Michael
Garnick
1528
Walnut Street
Philadelphia,
PA 19102
|
1,800,000
|
5.3%
|
||
SPH
Investments, Inc.
111
Presidential Blvd., Suite 165
Bala
Cynwyd, PA 19004
|
1,734,849
|
5.1%
|
||
All
officers and directors as a group
(5
persons)
|
10,727,771
|
31.2%
|
(*) | Less than one percent |
(1) |
The
securities “beneficially owned” by a person are determined in accordance
with the definition of “beneficial ownership” set forth in the rules and
regulations promulgated under the Securities Exchange Act of 1934,
and
accordingly, may include securities owned by and for, among others,
the
spouse and/or minor children of an individual and any other relative
who
has the same home as such individual, as well as other securities
as to
which the individual has or shares voting or investment power or
which
such person has the right to acquire within 60 days of September
24, 2007
pursuant to the exercise of options, or otherwise. Beneficial ownership
may be disclaimed as to certain of the securities. This table has
been
prepared based on 33,961,639 shares of
common stock outstanding as of September 24, 2007.
|
(2) |
Consists
of 7,500,000 shares held by Radiant Capital Partners, LLC over which
Mr.
Crain has sole voting and dispositive power and 400,000 shares issuable
upon exercise of options. Does not include 1,600,000 shares issuable
upon
exercise of options which are subject to vesting.
|
(3) |
Consists
of shares held of record by Mr. Cohen’s wife over which he shares voting
and dispositive power.
|
(4) |
Does
not include 100,000 shares issuable upon exercise of options subject
to
vesting.
|
(5) |
Includes
10,000 shares issuable upon exercise of options. Does not include
50,000
shares issuable upon exercise of options which are subject to vesting.
|
(6) |
Includes
60,000 shares issuable upon exercise of options. Does not include
240,000
shares issuable upon exercise of options which are subject to vesting.
|
2007
|
2006
|
2005
|
||||||||
Audit
Fees:
|
$
|
70,000
|
$
|
80,000
|
$
|
32,266
|
||||
Audit
Related Fees:
|
1,412
|
4,767
|
0
|
|||||||
Tax
Fees:
|
7,632
|
0
|
0
|
|||||||
All
Other Fees:
|
-
|
0
|
0
|
|||||||
Total:
|
$
|
_79,044
|
$
|
84,767
|
$
|
_32,266
|
Exhibit
No.
|
Description
|
|
2.1
|
Stock
Purchase Agreement by and among Radiant Logistics, Inc., the Shareholders
of Airgroup Corporation and William H. Moultrie (as Shareholders’ Agent)
dated January 11, 2006, effective as of January 1, 2006. (incorporated
by
reference to the Registrant’s Current Report on Form 8-K filed on January
18, 2006).
|
|
2.2
|
Registration
Rights Agreement by and among Radiant Logistics, Inc. and the Shareholders
of Airgroup Corporation dated January 11, 2006, effective as of January
1,
2006. (incorporated by reference to the Registrant’s Current Report on
Form 8-K filed on January 18, 2006).
|
|
2.3
|
First
Amendment to Stock Purchase Agreement (incorporated by reference
to the
Registrant’s Current Report on Form 8-K filed on January 30,
2007).
|
|
3.1
|
Certificate
of Incorporation (incorporated by reference to Exhibit 3.1 to the
Registrant’s Registration Statement on Form SB-2 filed on September 20,
2002).
|
|
3.2
|
Amendment
to Registrant’s Certificate of Incorporation (Certificate of Ownership and
Merger Merging Radiant Logistics, Inc. into Golf Two, Inc. dated
October
18, 2005) (incorporated by reference to Exhibit 3.1 to the Registrant’s
Current Report on Form 8-K dated October 18, 2005).
|
|
3.3
|
Bylaws
(incorporated by reference to Exhibit 3.2 to the Registrant's Registration
Statement on Form SB-2 filed on September 20, 2002)
|
|
10.1
|
Form
of Securities Purchase Agreement (representing the private placement
of
shares of common stock in October 2005) (incorporated by reference
to
Exhibit 4.1 to the Registrant's Current Report on Form 8-K dated
October
18, 2005).
|
|
10.2
|
Radiant
Logistics, Inc. 2005 Stock Incentive Plan (incorporated by reference
to
Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-QSB
filed
November 14, 2005).
|
|
10.3
|
Confidential
Private Placement Memorandum dated November 1, 2005 (including Form
of
Registration Rights Provisions and Subscription Agreement) (incorporated
by reference to Exhibit 10.1 to the Registrant's Current Report on
Form
8-K dated December 21, 2005).
|
|
10.4
|
Executive
Employment Agreement dated January 11, 2006 by and between Airgroup
Corporation and William H. Moultrie. (incorporated by reference to
the
Registrant’s Current Report on Form 8-K filed on January 18,
2006).
|
|
10.5
|
Form
of Securities Purchase Agreement dated January 11, 2006 for the sale
of
1,009,093 shares of common stock (incorporated by reference to the
Registrant’s Current Report on Form 8-K filed on January 18,
2006).
|
|
10.6
|
Loan
Agreement by and among Radiant Logistics, Inc., Airgroup Corporation
and
Bank of America, N.A. dated as of January 10, 2006 (incorporated
by
reference to the Registrant’s Current Report on Form 8-K filed on January
18, 2006).
|
|
10.7
|
Executive
Employment Agreement dated January 13, 2006 by and between Radiant
Logistics, Inc. and Bohn H. Crain (incorporated by reference to the
Registrant’s Current Report on Form 8-K filed on January 18,
2006).
|
|
10.8
|
Option
Agreement dated January 11, 2006 by and between Radiant Logistics,
Inc.
and William H. Moultrie (incorporated by reference to the Registrant’s
Current Report on Form 8-K filed on January 18, 2006).
|
|
10.9
|
Option
Agreement dated October 20, 2005 by and between Radiant Logistics,
Inc.
and Bohn H. Crain (incorporated by reference to the Registrant’s Current
Report on Form 8-K filed on January 18, 2006).
|
|
10.10
|
Loan
Agreement by and among Radiant Logistics, Inc., Airgroup Corporation,
Radiant Logistics Global Services, Inc., Radiant Logistics Partners,
LLC
and Bank of America, N.A. dated as of February 13, 2007 (incorporated
by
reference to the Registrant’s Quarterly Report on Form 10-Q filed on
February 14, 2007).
|
10.11
|
Asset
Purchase Agreement by and between Radiant Logistics Global Services,
Inc.
and Mass Financial Corp. (incorporated by reference to the Registrant’s
Current Report on Form 8-K filed on May 24, 2007)
|
|
10.12
|
Management
Services Agreement by and between Radiant Logistics Global Services,
Inc.
and Mass Financial Corp. (incorporated by reference to the Registrant’s
Current Report on Form 8-K filed on May 24, 2007)
|
|
10.13
|
Lease
Agreement for Bellevue, WA office space dated April 11, 2007 by and
between Radiant Logistics, Inc. and Pine Forest Properties, Inc.
(Filed
herewith)
|
14.1
|
Code
of Business Conduct and Ethics (incorporated by reference to the
Registrant’s Annual Report on Form 10-KSB filed on March 17,
2006).
|
|
21.1
|
Subsidiaries
of the Registrant (Filed Herewith)
|
|
31.1
|
Certification
of Chief Executive Officer and Chief Financial Officer Pursuant to
Section
302 of the Sarbanes-Oxley Act of 2002 (Filed herewith)
|
|
32.1
|
Certification
of Chief Executive Officer and Chief Financial Officer Pursuant to
Section
906 of the Sarbanes-Oxley Act of 2002. (This exhibit shall not be
deemed
“filed” for purposes of Section 18 of the Securities Exchange Act of 1934,
as amended, or otherwise subject to the liability of that section.
Further, this exhibit shall not be deemed to be incorporated by reference
into any filing under the Securities Act of 1933, as amended, or
the
Securities Exchange Act of 1934, as amended.) (Filed
herewith)
|
|
99.1
|
Press
release dated October 1, 2007
|
|
||
|
RADIANT LOGISTICS, INC. | |
Date:
October 1, 2007
|
||
By: |
/s/
Bohn H. Crain
|
|
Bohn
H. Crain
Chief
Executive Officer
|
||
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/
Stephen M.
Cohen
Stephen
M. Crain
|
|
|
Director
, General Counsel and
Secretary
|
|
October
1,
2007
|
/s/
Bohn H.
Crain
Bohn
H. Crain
|
|
|
Chairman
and
Chief
Executive Officer
|
|
October
1,
2007
|
/s/
Rodney
Eaton
Rodney
Eaton
|
|
|
Vice
President, Chief Accounting
Officer
& Controller
|
|
October
1,
2007
|
Report
of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated
Balance Sheets as of June 30, 2007 and 2006
|
F-3
|
Consolidated
Statements
of Income (Operations)
for the year ended June 30, 2007 and six months ended June 30,
2006 and
2005, and the years ended December 31, 2005 and 2004
|
F-4
|
Consolidated
Statements
of Stockholders’ Equity
for the year ended June 30, 2007, six months ended June 30, 2006
and 2005,
and the years ended December 31, 2005 and 2004
|
F-5
|
Consolidated
Statements
of Cash flows
for the year ended June 30, 2007, six months ended June 30, 2006
and 2005,
and the years ended December 31, 2005 and 2004
|
F-6-7
|
F-8
|
June
30,
|
June
30,
|
||||||
2007
|
2006
|
||||||
ASSETS
|
|||||||
Current
assets -
|
|||||||
Cash
and cash equivalents
|
$
|
719,575
|
$
|
510,970
|
|||
Accounts
receivable, net of allowance
|
|||||||
June
30, 2007 - $259,960; June, 30 2006 - $202,830
|
15,062,910
|
8,487,899
|
|||||
Current
portion of employee loan receivables and other receivables
|
42,800
|
40,329
|
|||||
Prepaid
expenses and other current assets
|
59,328
|
93,087
|
|||||
Deferred
tax asset
|
234,656
|
277,417
|
|||||
Total
current assets
|
16,119,269
|
9,409,702
|
|||||
|
|||||||
Furniture
and equipment, net
|
844,919
|
258,119
|
|||||
Acquired
intangibles, net
|
1,789,773
|
2,401,600
|
|||||
Goodwill
|
5,532,223
|
4,712,062
|
|||||
Employee
loan receivable
|
80,000
|
120,000
|
|||||
Investment
in real estate
|
40,000
|
40,000
|
|||||
Deposits
and other assets
|
618,153
|
103,376
|
|||||
Total
long term assets
|
8,060,149
|
7,377,038
|
|||||
|
$
|
25,024,337
|
$
|
17,044,859
|
|||
|
|||||||
Current
liabilities -
|
|||||||
Notes
payable - current portion of long term debt
|
$
|
800,000
|
$
|
-
|
|||
Accounts
payable
|
11,619,579
|
4,096,538
|
|||||
Accrued
transportation costs
|
1,651,177
|
1,501,374
|
|||||
Commissions
payable
|
700,020
|
429,312
|
|||||
Other
accrued costs
|
344,305
|
303,323
|
|||||
Income
taxes payable
|
224,696
|
1,093,996
|
|||||
Total
current liabilities
|
15,339,777
|
7,424,543
|
|||||
|
|||||||
Long
term debt
|
1,974,214
|
2,469,936
|
|||||
Deferred
tax liability
|
608,523
|
816,544
|
|||||
Total
long term liabilities
|
2,582,737
|
3,286,480
|
|||||
Total
liabilities
|
17,922,514
|
10,711,023
|
|||||
|
|||||||
Commitments
& contingencies
|
-
|
-
|
|||||
Minority
interest
|
57,482
|
-
|
|||||
|
|||||||
Stockholders'
equity (deficit):
|
|||||||
Preferred
stock, $0.001 par value, 5,000,000 shares authorized; no shares issued
or
outstanding
|
-
|
-
|
|||||
Common
stock, $0.001 par value, 50,000,000 shares authorized. Issued
and
outstanding: June 30, 2007 - 33,961,639; June 30, 2006 -
33,611,639
|
15,417
|
15,067
|
|||||
Additional
paid-in capital
|
7,137,774
|
6,590,355
|
|||||
Accumulated
deficit
|
(108,850
|
)
|
(271,586
|
)
|
|||
Total
stockholders’ equity (deficit)
|
7,044,341
|
6,333,836
|
|||||
|
$
|
25,024,337
|
$
|
17,044,859
|
YEAR
ENDED
JUNE
30,
|
SIX MONTHS
ENDED
JUNE 30,
|
SIX
MONTHS
ENDED
JUNE 30,
|
YEAR
ENDED
DECEMBER
31
|
YEAR
ENDED
DECEMBER
31,
|
||||||||||||
2007
|
2006
|
2005
|
2005
|
2004
|
||||||||||||
(unaudited)
|
||||||||||||||||
Revenues
|
$
|
75,526,788
|
$
|
26,469,049
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
Cost
of transportation
|
48,812,662
|
16,965,966
|
-
|
-
|
-
|
|||||||||||
Net
revenues
|
26,714,126
|
9,503,083
|
-
|
-
|
-
|
|||||||||||
|
||||||||||||||||
|
||||||||||||||||
Agent
Commissions
|
20,047,536
|
7,037,363
|
-
|
-
|
-
|
|||||||||||
Personnel
costs
|
2,916,073
|
1,154,449
|
-
|
-
|
-
|
|||||||||||
Selling,
general and administrative expenses
|
2,507,317
|
842,391
|
21,881
|
161,967
|
23,293
|
|||||||||||
Depreciation
and amortization
|
830,486
|
423,465
|
-
|
-
|
-
|
|||||||||||
Total operating expenses
|
26,301,412
|
9,457,668
|
21,881
|
161,967
|
23,293
|
|||||||||||
Income
(loss) from operations
|
412,714
|
45,415
|
(21,881
|
)
|
(161,967
|
)
|
(23,293
|
)
|
||||||||
|
||||||||||||||||
Other
income (expense):
|
||||||||||||||||
Interest
income
|
16,272
|
14,800
|
-
|
14,433
|
-
|
|||||||||||
Interest
expense
|
(22,215
|
)
|
(25,851
|
)
|
(1,000)
|
)
|
(1,500
|
)
|
(2,000
|
)
|
||||||
Other
|
(42,686
|
)
|
(2,773
|
)
|
-
|
-
|
-
|
|||||||||
Total
other income (expense)
|
(48,629
|
)
|
(13,824
|
)
|
(1,000
|
)
|
12,933
|
(2,000
|
)
|
|||||||
Income
(loss) before income tax expense (benefit)
|
364,085
|
31,591
|
(22,811
|
)
|
(149,034
|
)
|
(25,293
|
)
|
||||||||
|
||||||||||||||||
Income
tax expense (benefit)
|
155,867
|
(39,095
|
)
|
-
|
-
|
-
|
||||||||||
|
||||||||||||||||
Income
(loss) before minority interest
|
208,218
|
70,686
|
(22,811
|
)
|
(149,034
|
)
|
(25,293
|
)
|
||||||||
Minority
interest
|
45,482
|
-
|
-
|
-
|
-
|
|||||||||||
Net
income (loss)
|
$
|
162,736
|
$
|
70,686
|
$
|
(22,811
|
)
|
$
|
(149,034
|
)
|
$
|
(25,293
|
)
|
|||
|
||||||||||||||||
Net
income (loss) per common share - basic and diluted
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
(0.01
|
)
|
$
|
-
|
|||||
Weighted
average shares outstanding:
|
||||||||||||||||
Basic
shares
|
33,882,872
|
33,185,665
|
25,964,176
|
26,490,427
|
25,964,179
|
|||||||||||
Diluted
shares
|
34,324,736
|
34,584,836
|
25,964,176
|
26,490,427
|
25,964,179
|
COMMON
STOCK
|
ADDITIONAL
|
|
TOTAL
STOCKHOLDERS'
|
|||||||||||||
SHARES
|
AMOUNT
|
PAID-IN
CAPITAL
|
ACCUMULATED
DEFICIT
|
EQUITY
(DEFICIT)
|
||||||||||||
Balance
at December 31, 2003
|
25,964,179
|
$
|
7,418
|
$
|
152,107
|
$
|
(167,945
|
)
|
$
|
(8,420
|
)
|
|||||
Capital
contribution for office space
|
-
|
-
|
1,200
|
-
|
1,200
|
|||||||||||
Net
loss for the year ended December 31, 2004
|
-
|
-
|
-
|
(25,293
|
)
|
(25,293
|
)
|
|||||||||
Balance
at December 31, 2004
|
25,964,179
|
7,418
|
153,307
|
(193,238
|
)
|
(32,513
|
)
|
|||||||||
Issuance
of common stock for cash at $0.44 per share (October 2005), net of
issuance costs
|
2,272,728
|
2,273
|
983,949
|
-
|
986,222
|
|||||||||||
Issuance
of common stock for cash at $0.44 per share (December 2005), net
of
issuance costs
|
10,098,943
|
10,100
|
4,206,203
|
-
|
4,216,303
|
|||||||||||
Issuance
of common stock for cash at $0.44 per share (December 2005), net
of
issuance costs
|
500,000
|
500
|
29,000
|
-
|
29,500
|
|||||||||||
Surrender
of common stock (Note 12)
(December
2005)
|
(7,700,001
|
)
|
(7,701
|
)
|
7,701
|
-
|
-
|
|||||||||
Forgiveness
of debt and related interest in connection with change of control
(Note
12) (October 2005)
|
-
|
-
|
78,409
|
-
|
78,409
|
|||||||||||
Capital
contribution for office space
|
-
|
-
|
900
|
-
|
900
|
|||||||||||
Stock
based compensation
|
-
|
-
|
29,238
|
-
|
29,238
|
|||||||||||
Net
loss for the year ended December 31, 2005
|
-
|
-
|
-
|
(149,034
|
)
|
(149,034
|
)
|
|||||||||
Balance
at December 31, 2005
|
31,135,849
|
12,590
|
5,488,707
|
(342,272
|
)
|
5,159,025
|
||||||||||
|
||||||||||||||||
Issuance
of common stock for cash at $0.44 per
|
||||||||||||||||
share
(January 2006), net of issuance costs
|
1,009,093
|
1,010
|
440,627
|
-
|
441,637
|
|||||||||||
Issuance
of common stock for cash at $0.44 per
|
||||||||||||||||
share
(February 2006), net of issuance costs
|
1,466,697
|
1,467
|
638,555
|
-
|
640,022
|
|||||||||||
Costs
incurred for issuance of prior year shares
|
(63,153
|
)
|
(63,153
|
)
|
||||||||||||
Stock
based compensation
|
-
|
-
|
85,619
|
-
|
85,619
|
|||||||||||
Net
income for the six months ended June 30, 2006
|
-
|
-
|
-
|
70,686
|
70,686
|
|||||||||||
Balance
at June 30, 2006
|
33,611,639
|
$
|
15,067
|
$
|
6,590,355
|
$
|
(271,586
|
)
|
$
|
6,333,836
|
||||||
Issuance
of common stock for training materials
|
||||||||||||||||
at
$1.01 per share (September 2006)
|
250,000
|
250
|
252,250
|
-
|
252,500
|
|||||||||||
Issuance
of common stock for bonus compensation
|
||||||||||||||||
at
$1.01 per share (October 2006)
|
100,000
|
100
|
100,900
|
-
|
101,000
|
|||||||||||
Stock
based compensation
|
-
|
-
|
194,269
|
-
|
194,269
|
|||||||||||
Net
income for the year ended June 30, 2007
|
-
|
-
|
-
|
162,736
|
162,736
|
|||||||||||
Balance
at June 30, 2007
|
33,961,639
|
$
|
15,417
|
$
|
7,137,774
|
$
|
(108,850
|
)
|
$
|
7,044,341
|
CASH
FLOWS PROVIDED BY (USED FOR) OPERATING ACTIVITIES:
|
YEAR
ENDED
JUNE
30,
2007
|
SIX
MONTHS
ENDED
JUNE
30, 2006
|
SIX
MONTHS
ENDED
JUNE
30, 2005
|
YEAR
ENDED DECEMBER 31, 2005
|
YEARENDED
DECEMBER 31, 2004
|
|||||||||||
(unaudited)
|
||||||||||||||||
Net
income (loss)
|
$
|
162,736
|
$
|
70,686
|
$
|
(22,881
|
)
|
$
|
(149,034
|
)
|
$
|
(25,293
|
)
|
|||
ADJUSTMENTS
TO RECONCILE NET INCOME (LOSS) TO NET CASH
|
||||||||||||||||
PROVIDED
BY (USED FOR) OPERATING ACTIVITIES:
|
||||||||||||||||
non-cash
issuance of common stock (services)
|
-
|
-
|
-
|
29,500
|
-
|
|||||||||||
non-cash
contribution to capital (rent)
|
-
|
-
|
600
|
900
|
1,200
|
|||||||||||
non-cash
compensation expense (stock options)
|
194,269
|
85,619
|
-
|
29,238
|
-
|
|||||||||||
non-cash
contribution to capital (interest)
|
-
|
-
|
-
|
3,500
|
-
|
|||||||||||
provision
for doubtful accounts
|
57,130
|
-
|
-
|
-
|
-
|
|||||||||||
amortization
of intangibles
|
611,827
|
340,400
|
-
|
-
|
-
|
|||||||||||
depreciation
and amortization
|
230,046
|
(32,670
|
)
|
-
|
-
|
-
|
||||||||||
deferred
income tax benefit
|
(165,260
|
)
|
-
|
-
|
-
|
-
|
||||||||||
minority
interest in income of subsidiaries
|
(5,482
|
)
|
-
|
-
|
-
|
-
|
||||||||||
change
in fair value of accounts receivable
|
(6,127
|
)
|
225,271
|
-
|
-
|
-
|
||||||||||
CHANGE
IN OPERATING ASSETS AND LIABILITIES:
|
||||||||||||||||
accounts
receivable
|
(6,632,141
|
)
|
1,739
|
-
|
-
|
-
|
||||||||||
employee
receivable and other receivables
|
(2,471
|
)
|
12,230
|
-
|
(25,054
|
)
|
-
|
|||||||||
prepaid
expenses and other assets
|
(238,128
|
)
|
(116,446
|
)
|
-
|
-
|
-
|
|||||||||
accounts
payable
|
7,309,007
|
(2,590,831
|
)
|
-
|
-
|
-
|
||||||||||
accrued
transportation costs
|
149,803
|
1,501,374
|
-
|
-
|
-
|
|||||||||||
commissions
payable
|
270,708
|
9,280
|
-
|
-
|
-
|
|||||||||||
other
accrued costs
|
141,982
|
(182,677
|
)
|
-
|
-
|
-
|
||||||||||
income
taxes payable
|
(869,300
|
)
|
(298,388
|
)
|
1,000
|
146,387
|
(7,150
|
)
|
||||||||
Net
cash provided by (used for)
|
||||||||||||||||
operating
activities
|
1,259,563
|
(974,413
|
)
|
(21,281
|
)
|
35,437
|
(31,243
|
)
|
||||||||
CASH
FLOWS PROVIDED BY (USED FOR) INVESTING ACTIVITIES:
|
||||||||||||||||
Acquisition
of Airgroup, net of acquired cash (See Note 4)
|
(7,358,588
|
)
|
-
|
(15,907
|
)
|
-
|
||||||||||
Purchase
of United American Assets (see Note 6)
|
(242,890
|
)
|
-
|
-
|
-
|
-
|
||||||||||
Proceeds
from sale of investments
|
-
|
241,455
|
-
|
-
|
-
|
|||||||||||
Purchase
of technology and equipment
|
(524,346
|
)
|
(95,153
|
)
|
-
|
-
|
-
|
|||||||||
Net
cash used for investing activities
|
(767,236
|
)
|
(7,212,286
|
)
|
-
|
(15,907
|
)
|
-
|
||||||||
|
||||||||||||||||
CASH
FLOWS PROVIDED BY (USED FOR) FINANCING ACTIVITIES:
|
||||||||||||||||
Proceeds
from notes payable, stockholders
|
-
|
-
|
24,909
|
24,909
|
-
|
|||||||||||
Contribution
from minority interest of subsidiary
|
12,000
|
-
|
-
|
-
|
-
|
|||||||||||
Proceeds
from issuance of common stock net of
issuance
costs
|
-
|
1,018,506
|
-
|
5,202,525
|
-
|
|||||||||||
Proceeds
from (payments) to credit facility net of credit
fees
|
(295,722
|
)
|
1,969,936
|
-
|
-
|
-
|
||||||||||
Payment
of credit facility fees
|
-
|
(57,224
|
)
|
-
|
-
|
-
|
||||||||||
Long
term debt for acquisition (see Note 4)
|
-
|
500,000
|
-
|
-
|
-
|
|||||||||||
Net
cash provided by (used for) financing
activities
|
(283,722
|
)
|
3,431,218
|
24,909
|
5,227,434
|
-
|
||||||||||
NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
208,605
|
(4,755,481
|
)
|
3,628
|
5,246,964
|
(31,243
|
)
|
|||||||||
CASH
AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR
|
510,970
|
5,266,451
|
19,487
|
19,487
|
50,730
|
|||||||||||
CASH
AND CASH EQUIVALENTS AT END OF YEAR
|
$
|
719,575
|
$
|
510,970
|
$
|
23,115
|
$
|
$5,266,451
|
$
|
19,487
|
||||||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
||||||||||||||||
Income
taxes paid
|
$
|
1,136,784
|
$
|
656,813
|
$
|
800
|
$
|
800
|
$
|
-
|
||||||
Interest
paid
|
$
|
22,215
|
$
|
25,851
|
$
|
25,851
|
$
|
-
|
$
|
-
|
||||||
SUPPLEMENTAL
DISCLOSURE OF NON-CASH INVESTING ACTIVITIES
|
||||||||||||||||
Acquisition
of Airgroup (see Note 4):
|
||||||||||||||||
Fair
value of assets acquired
|
$
|
-
|
$
|
19,885,892
|
$
|
-
|
$
|
15,907
|
$
|
-
|
||||||
Liabilities
assumed
|
-
|
(9,797,019
|
)
|
-
|
-
|
-
|
||||||||||
Cash
paid
|
-
|
10,088,873
|
-
|
15,907
|
-
|
|||||||||||
Less
cash acquired
|
-
|
(2,730,285
|
)
|
-
|
-
|
-
|
||||||||||
Net
cash paid for Airgroup
|
$
|
-
|
$
|
7,358,588
|
$
|
-
|
$
|
15,907
|
$
|
-
|
Twelve
months
ended
June
30, 2007
|
Six
months
ended
June
30, 2006
|
Year
ended
December
31,
2005
|
||||||||
Weighted
average basic shares outstanding
|
33,882,872
|
33,185,665
|
26,490,427
|
|||||||
Options
|
441,864
|
1,399,171
|
-
|
|||||||
Weighted
average dilutive shares outstanding
|
34,324,736
|
34,584,836
|
26,490,427
|
Twelve
months eded
June
30, 2007
|
Six
months ended
June
30, 2006
|
||||||||||||
Gross
carrying
amount
|
Accumulated
Amortization
|
Gross
carrying
amount
|
Accumulated
Amortization
|
||||||||||
Amortizable
intangible assets:
|
|||||||||||||
Customer
related
|
$
|
2,652,000
|
$
|
925,227
|
$
|
2,652,000
|
$
|
331,400
|
|||||
Covenants
not to compete
|
90,000
|
27,000
|
90,000
|
9,000
|
|||||||||
Total
|
$
|
2,742,000
|
$
|
952,227
|
$
|
2,742,000
|
$
|
340,400
|
|||||
Aggregate
amortization expense:
|
|||||||||||||
For
twelve months ended June 30, 2007
|
$
|
611,827
|
|||||||||||
For
six months ended June 30, 2006
|
$
|
340,400
|
|||||||||||
Aggregate
amortization expense for the year ended June 30:
|
|||||||||||||
2008
|
547,359
|
||||||||||||
2009
|
597,090
|
||||||||||||
2010
|
483,124
|
||||||||||||
2011
|
162,200
|
||||||||||||
Total
|
$
|
1,789,773
|
Asset
Purchase:
|
||||
Initial
down payment
|
$
|
100,000
|
||
Acquisition
expenses
|
128,310
|
|||
Vendor
invoices paid on behalf of Mass
|
14,580
|
|||
242,890
|
||||
Mass
expenses covered by MSA
|
$
|
195,844
|
||
|
||||
Total
|
$
|
438,734
|
June
30,
2007
|
June
30,
2006
|
||||||
Vehicles
|
$
|
3,500
|
$
|
3,500
|
|||
Communication
equipment
|
1,353
|
1,353
|
|||||
Office
equipment
|
261,633
|
6,023
|
|||||
Furniture
and fixtures
|
23,379
|
10,212
|
|||||
Computer
equipment
|
232,667
|
96,653
|
|||||
Computer
software
|
570,494
|
198,438
|
|||||
Leasehold
improvements
|
10,699
|
10,699
|
|||||
1,103,725
|
326,878
|
||||||
Less:
Accumulated depreciation and amortization
|
(258,806
|
)
|
(68,759
|
)
|
|||
Furniture
and equipment - net
|
$
|
844,919
|
$
|
258,119
|
June
30, 2007
|
June
30, 2006
|
||||||
Deferred
tax assets:
|
|||||||
Allowance
for doubtful accounts
|
$
|
88,386
|
$
|
72,708
|
|||
Accruals
|
862,767
|
532,585
|
|||||
Net
operating loss carryforwards
|
-
|
162,088
|
|||||
Stock
based compensation
|
66,051
|
-
|
|||||
Valuation
allowance for loss carryforwards
|
-
|
(116,372
|
)
|
||||
Other
accrued income
|
-
|
33,631
|
|||||
Total
deferred tax assets
|
$
|
1,017,204
|
$
|
684,640
|
|||
Deferred
tax liabilities:
|
|||||||
Accruals
|
782,548
|
368,340
|
|||||
Stock
options
|
-
|
38,883
|
|||||
Total
deferred tax liability
|
$
|
782,548
|
$
|
407,223
|
|||
Net
deferred tax asset - current
|
$
|
234,656
|
$
|
277,417
|
|||
Long
term deferred tax liability - intangibles - Note 4
|
$
|
608,523
|
$
|
816,544
|
Twelve
months
ended
June 30,
|
Six
months
ended
June 30,
|
YearEnded December
31, |
||||||||
2007
|
2006
|
2005
|
||||||||
Current:
|
||||||||||
Federal
|
$
|
313,627
|
$
|
109,216
|
$
|
-
|
||||
State
|
7,500
|
-
|
-
|
|||||||
|
||||||||||
Deferred:
|
||||||||||
Federal
|
(165,260
|
)
|
(148,311
|
)
|
-
|
|||||
State
|
-
|
-
|
-
|
|||||||
Net
income tax expense (benefit)
|
$
|
155,867
|
$
|
(39,095
|
)
|
$
|
-
|
Twelve
months
ended
June 30,
|
Six
months
ended
June 30,
|
Year
Ended
December
31,
|
||||||||
2007
|
2006
|
2005
|
||||||||
Tax
at statutory rate
|
$
|
108,325
|
$
|
10,741
|
$
|
-
|
||||
Net
operating loss carryforward net of valuation allowance
|
-
|
(45,716
|
)
|
-
|
||||||
Net
tax payment for amended Airgroup 2005 return
|
26,342
|
-
|
-
|
|||||||
State
income taxes
|
7,500
|
-
|
-
|
|||||||
Other
|
13,700
|
(4,120
|
)
|
-
|
||||||
Net
income tax expense (benefit)
|
$
|
155,867
|
$
|
(39,095
|
)
|
$
|
-
|
2009
|
2010
|
Total
|
||||||||
Earn-out payments | ||||||||||
Cash
|
$
|
—
|
$
|
—
|
$
|
—
|
||||
Equity
|
633
|
634
|
1,267
|
|||||||
Total
potential earn-out payments
|
$
|
633
|
$
|
634
|
$
|
1,267
|
||||
|
||||||||||
Prior
year earnings targets (income from continuing operations) (2)
|
||||||||||
|
||||||||||
Total
earnings actual and targets
|
$
|
2,500
|
$
|
2,500
|
$
|
5,000
|
||||
|
||||||||||
Earn-outs
as a percentage of prior year earnings targets:
|
||||||||||
|
||||||||||
Total
|
25.3
|
%
|
25.3
|
%
|
25.3
|
%
|
|
|
(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)
|
Income
from continuing operations as presented refers to 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 to, 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.
|
|
|
Twelve
months ended
June
30, 2007
|
|
Six
months ended
June
30, 2006
|
|
Year
ended
December
31, 2005
|
|
||||||||||||
|
|
Granted
Shares
|
|
Weighted
Average
Exercise
Price
|
|
Granted
Shares
|
|
Weighted
Average
Exercise
Price
|
|
Granted
Shares
|
|
Weighted
Average
Exercise
Price
|
|
||||||
Outstanding
at beginning of year
|
|
|
2,425,000
|
|
$
|
0.593
|
|
|
2,000,000
|
|
$
|
0.625
|
|
|
-
|
|
$
|
-
|
|
Granted
|
|
|
725,000
|
|
$
|
0.646
|
|
|
425,000
|
|
|
0.440
|
|
|
2,000,000
|
|
|
0.625
|
|
Exercised
|
|
|
-
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
||
Forfeited
|
|
|
-
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
||
Cancelled
|
|
|
-
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
||
Outstanding
at end of year
|
|
|
3,150,000
|
|
$
|
0.605
|
|
|
2,425,000
|
|
$
|
0.593
|
|
|
2,000,000
|
|
$
|
0.625
|
|
Exercisable
at end of year
|
|
|
485,000
|
|
$
|
0.593
|
|
|
-
|
|
$
|
-
|
|
|
-
|
|
$
|
-
|
|
Non-vested
at end of year
|
2,665,000
|
$
|
0.607
|
2,425,000
|
$
|
0.593
|
2,000,000
|
|
$
|
0.625
|
Twelve
months ended
June
30, 2007
|
Six
months ended
June
30, 2006
|
Year
ended
December
31, 2005
|
||||||||||
Risk-Free
Interest Rates
|
5.05%
|
3.73%
|
3.73%
|
|||||||||
Expected
Lives
|
5
yrs
|
5
yrs
|
5
yrs
|
|||||||||
Expected
Volatility
|
102.5%
|
116.9%
|
117.8%
|
|||||||||
Expected
Dividend Yields
|
0.00%
|
0.00%
|
0.00%
|
|||||||||
Forfeiture
Rate
|
0.00%
|
0.00%
|
0.00%
|
Shares
|
Weighted
Average
Grant
Date
Fair
Value
|
||||||
Granted
during the year ended December 31, 2005
|
2,000,000
|
$
|
0.351
|
||||
Outstanding
at December 31, 2005
|
2,000,000
|
0.351
|
|||||
Granted
during the six months ended June 30, 2006
|
425,000
|
0.363
|
|||||
Outstanding
at June 30, 2006
|
2,425,000
|
0.353
|
|||||
Granted
during the year ended June 30, 2007
|
725,000
|
0.509
|
|||||
Less
options vested during 2007
|
(485,000
|
)
|
(0.353
|
)
|
|||
Outstanding
at June 30, 2007
|
2,665,000
|
$
|
0.395
|
Exercisable
Options
|
|||||||||||||||||||
Exercise
Prices
|
Number
Outstanding
at
June
30,
2007
|
Weighte
Average
Remaining
Contractual
Life-Years
|
Weighted
Average
Exercise
Price
|
Aggregate
Intrinsic
Value
at
June 30,
2007
|
Number
Exercisable
|
Weighted
Average
Exercise
Price
|
|||||||||||||
$0.40
- $0.59
|
1,575,000
|
8.54
|
$
|
0.489
|
$
|
175,500
|
285,000
|
$
|
0.482
|
||||||||||
$0.60
- $0.79
|
1,530,000
|
8.93
|
$
|
0.713
|
$
|
-
|
200,000
|
$
|
0.750
|
||||||||||
$1.00
- $1.19
|
45,000
|
9.25
|
$
|
1.010
|
$
|
-
|
-
|
-
|
|||||||||||
Total
|
3,150,000
|
8.75
|
$
|
0.605
|
$
|
175,500
|
485,000
|
$
|
0.593
|
2007
Quarter
Ended
|
|||||||||||||
June
30
|
March
31
|
December
31
|
September
30
|
||||||||||
Revenue
|
$
|
23,371,733
|
$
|
19,394,026
|
$
|
18,343,928
|
$
|
14,417,101
|
|||||
Cost
of transportation
|
15,455,623
|
12,278,178
|
11,655,542
|
9,423,319
|
|||||||||
Net
revenues
|
7,916,110
|
7,115,848
|
6,688,386
|
4,993,782
|
|||||||||
|
|||||||||||||
Total
operating expenses
|
7,803,590
|
7,030,185
|
6,641,277
|
4,826,360
|
|||||||||
Income
from operations
|
112,520
|
85,663
|
47,109
|
167,422
|
|||||||||
|
|||||||||||||
Total
other income (expense)
|
(15,114
|
)
|
(24,690
|
)
|
(2,737
|
)
|
(6,088
|
)
|
|||||
Income
before income tax and minority interest
|
97,406
|
60,973
|
44,372
|
161,334
|
|||||||||
|
|||||||||||||
Income
tax (benefit)
|
137,542
|
37,449
|
(20,932
|
)
|
1,808
|
||||||||
Income
before minority interest
|
(40,136
|
)
|
23,524
|
65,304
|
159,526
|
||||||||
Minority
interest
|
45,464
|
18
|
-
|
-
|
|||||||||
Net
income (loss)
|
$
|
(85,600
|
)
|
$
|
23,506
|
$
|
65,304
|
$
|
159,526
|
||||
|
|||||||||||||
Net
income (loss) per common share - basic and diluted
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
|||||
2006
Quarter Ended
|
|||||||||||||
June
30
|
March
31
|
December
31
|
September
30
|
||||||||||
Revenue
|
$ | 14,626,332 | $ | 11,842,717 |
$
|
-
|
$
|
-
|
|||||
Cost
of transportation
|
9,486,259 | 7,479,707 |
-
|
-
|
|||||||||
Net
revenues
|
5,140,073 | 4,363,010 |
-
|
-
|
|||||||||
|
|||||||||||||
Total
operating expenses
|
4,967,761 | 4,489,907 |
126,011
|
14,075
|
|||||||||
Income
(loss) from operations
|
172,312 |
(126,897
|
)
|
(126,011
|
)
|
(14,075
|
)
|
||||||
|
|||||||||||||
Total
other income (expense)
|
(11,966
|
)
|
(1,858
|
)
|
14,433
|
(500
|
)
|
||||||
Income
(loss) before income tax expense (benefit)
|
160,346 |
(128,755
|
)
|
(111,578
|
)
|
(14,575
|
)
|
||||||
|
|||||||||||||
Income
tax (benefit)
|
62,550 |
(101,645
|
)
|
-
|
-
|
||||||||
Income
before minority interest
|
97,796 |
(27,110
|
)
|
(111,578
|
)
|
(14,575
|
)
|
||||||
Minority
interest
|
- | - |
-
|
-
|
|||||||||
|
|||||||||||||
Net
income (loss)
|
$ | 97,796 |
$
|
(27,110
|
)
|
$
|
(111,578
|
)
|
$
|
(14,575
|
)
|
||
|
|||||||||||||
Net
income (loss) per common share - basic and diluted
|
$ | - | $ | - |
$
|
-
|
$
|
-
|
|||||
Balance
at
beginning
of
year
|
Write
off to
expense
|
Increase
in
reserve
|
Balance
at end of year
|
|||||||||
Allowance
for Doubtful Accounts:
|
|
|||||||||||
|
|
|||||||||||
Year
ended December 31, 2004
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
|
|||
|
||||||||||||
Year
ended December 31, 2004
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
|
|||
|
||||||||||||
Six
months ended June 30, 2006
|
$
|
218,000
|
$
|
(15,170
|
)
|
$
|
-
|
$
|
202,830
|
|
||
Twelve
months ended June 30, 2007
|
$
|
202,830
|
$
|
(1,148
|
)
|
$
|
58,278
|
$
|
259,960
|
|||