10-Q

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

S QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: December 31, 2011

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to _____________

Commission File Number: 000-50283

RADIANT LOGISTICS, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	04-3625550
(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification No.)

405 114^th Ave S.E., Bellevue, WA 98004

(Address of Principal Executive Offices)

(425) 943-4599

(Issuer’s Telephone Number, including Area Code)

N/A

(Former Name, Former Address, and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes S No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes S No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨	Smaller reporting company S
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No S

There were 32,310,913 issued and outstanding shares of the registrant’s common stock, par value $.001 per share, as of February 10, 2012.

1

RADIANT LOGISTICS, INC.
TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements – Unaudited
	Condensed Consolidated Balance Sheets at December 31, 2011 and June 30, 2011	3
	Condensed Consolidated Statements of Operations for the three and six months ended December 31, 2011 and 2010	5
	Condensed Consolidated Statement of Stockholders’ Equity for the six months ended December 31, 2011	6
	Condensed Consolidated Statements of Cash Flows for the six months ended December 31, 2011 and 2010	7
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Conditions and Results of Operations	25
Item 4.	Controls and Procedures	39
PART II OTHER INFORMATION
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 6.	Exhibits	42

2

RADIANT LOGISTICS, INC.
Condensed Consolidated Balance Sheets

(unaudited)

	DECEMBER 31,		JUNE 30,
	2011		2011
ASSETS
Current assets:
Cash and cash equivalents	$	2,119,199	$	434,185
Accounts receivable, net of allowance of $1,363,725 and $1,592,235, respectively		42,911,900		41,577,053
Current portion of employee loan receivable		31,211		21,401
Current portion of  station and other receivables		78,485		141,372
Income tax deposit		377,761		—
Prepaid expenses and other current assets		3,279,817		1,761,273
Deferred tax asset		782,916		1,142,077
Total current assets		49,581,289		45,077,361
Furniture and equipment, net		1,643,194		1,428,063
Acquired intangibles, net		9,963,234		2,879,846
Goodwill		11,745,878		6,650,008
Employee loan receivable, net of current portion		88,775		64,494
Station and other receivables, net of current portion		97,955		116,965
Investment in real estate		40,000		40,000
Deposits and other assets		286,037		363,815
Total long term assets		22,221,879		10,115,128
Total assets	$	73,446,362	$	56,620,552
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued transportation costs	$	33,644,791	$	27,872,185
Commissions payable		2,792,216		3,570,858
Other accrued costs		2,057,595		1,992,694
Income taxes payable		—		333,999
Current portion of notes payable to former shareholders of DBA		767,092		800,000
Current portion of amounts due to former shareholders of acquired operations		3,158,708		2,657,781
Current portion of contingent consideration		269,796		—
Other current liabilities		133,531		135,927
Total current liabilities		42,823,729		37,363,444
Notes payable and other long-term debt, net of current portion and debt discount		17,065,373		11,869,268
Contingent consideration, net of current portion		3,805,204		—
Deferred rent liability		643,936		631,630
Deferred tax liability		242,644		485,907
Other long term liabilities		88,821		120,571
Total long term liabilities		21,845,978		13,107,376
Total liabilities		64,669,707		50,470,820

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RADIANT LOGISTICS, INC.
Condensed Consolidated Balance Sheets (continued)

(unaudited)

	DECEMBER 31,			JUNE 30,
	2011			2011
Stockholders' equity:
Radiant Logistics, Inc. 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, 32,310,913 and 31,676,438 shares issued and outstanding, respectively		18,685			18,051
Additional paid-in capital		12,609,024			11,060,701
Treasury stock, at cost, 4,919,239 shares		(1,407,455	)		(1,407,455	)
Retained deficit		(2,542,798	)		(3,615,322	)
Total Radiant Logistics, Inc. stockholders’ equity		8,677,456			6,055,975
Non-controlling interest		99,199			93,757	)
Total stockholders’ equity		8,776,655			6,149,732
Total liabilities and stockholders’ equity	$	73,446,362		$	56,620,552

The accompanying notes form an integral part of these condensed consolidated financial statements.

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RADIANT LOGISTICS, INC.
Condensed Consolidated Statements of Operations
(unaudited)

	THREE MONTHS ENDED DECEMBER 31,						SIX MONTHS ENDED DECEMBER 31,
	2011			2010			2011			2010
Revenue	$	72,613,729		$	44,496,820		$	144,446,773		$	90,857,877
Cost of transportation		52,365,148			30,314,763			102,959,272			62,557,124
Net revenues		20,248,581			14,182,057			41,487,501			28,300,753
Agent commissions		12,752,341			9,850,191			26,644,766			19,682,651
Personnel costs		3,078,281			1,561,268			5,972,019			3,118,428
Selling, general and administrative expenses		2,432,105			1,140,135			5,093,231			2,203,417
Transition costs associated with DBA acquisition		279,743			—			562,379			—
Depreciation and amortization		599,913			326,808			990,306			652,066
Total operating expenses		19,142,383			12,878,402			39,262,701			25,656,562
Income from operations		1,106,198			1,303,655			2,224,800			2,644,191
Other income (expense):
Interest income		5,064			5,630			9,998			11,439
Interest expense		(211,269	)		(42,179	)		(303,357	)		(84,421	)
Other		47,231			63,407			119,960			89,693
Loss on litigation settlement		—			(150,000	)		—			(150,000	)
Total other expense		(158,974	)		(123,142	)		(173,399	)		(133,289	)
Income before income tax expense		947,224			1,180,513			2,051,401			2,510,902
Income tax expense		(487,966	)		(413,319	)		(889,435	)		(918,862	)
Net income		459,258			767,194			1,161,966			1,592,040
Less: Net income attributable to non-controlling interest		(41,761	)		(50,929	)		(89,442	)		(92,832	)
Net income attributable to Radiant Logistics, Inc.	$	417,497		$	716,265		$	1,072,524		$	1,499,208
Net income per common share – basic and diluted	$	.01		$	.02		$	.03		$	.05
Weighted average shares outstanding:
Basic shares		31,954,955			30,122,700			31,815,696			30,296,880
Diluted shares		34,874,343			31,212,861			34,742,154			30,968,361

The accompanying notes form an integral part of these condensed consolidated financial statements.

5

RADIANT LOGISTICS, INC.
Condensed Consolidated Statement of Stockholders’ Equity

(unaudited)

	RADIANT LOGISTICS, INC. STOCKHOLDERS
						ADDITIONAL											TOTAL
		COMMON STOCK				PAID-IN		TREASURY			RETAINED			CONTROLLING			STOCKHODERS’
		SHARES		AMOUNT		CAPITAL		STOCK			DEFICIT			INTEREST			EQUITY
Balance at June 30, 2011		31,676,438	$	18,051	$	11,060,701	$	(1,407,455	)	$	(3,615,322	)	$	93,757		$	6,149,732
Issuance of common stock to the former Adcom shareholder per earn-out agreement at $2.29 per share		134,475		134		308,414		—			—			—			308,548
Issuance of common stock related to funding for Isla acquisition  at $2.35 per share		500,000		500		1,174,500		—			—			—			1,175,000
Share-based compensation		—		—		65,409		—			—			—			65,409
Distribution to non-controlling interest		—		—		—		—			—			(84,000	)		(84,000	)
Net income for the six months ended December 31, 2011		—		—		—		—			1,072,524			89,442			1,161,966
Balance at December  31, 2011		32,310,913	$	18,685	$	12,609,024	$	(1,407,455	)	$	(2,542,798	)	$	99,199		$	8,776,655

The accompanying notes form an integral part of these condensed consolidated financial statements.

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RADIANT LOGISTICS, INC.
Condensed Consolidated Statements of Cash Flows
(unaudited)

	SIX MONTHS ENDED DECEMBER 31,
	2011			2010
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Net income	$	1,072,524		$	1,499,208
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
non-cash compensation expense (stock options)		65,409			80,771
amortization of intangibles		764,588			493,575
deferred income tax expense		115,898			993
depreciation and leasehold amortization		225,718			158,491
change in non-controlling interest		89,442			92,832
amortization of loan fees and original issue discount		19,361			—
loss on litigation settlement		—			150,000
loss on disposal of assets		—			11,931
recovery of doubtful accounts		(228,510	)		(152,143	)
CHANGE IN OPERATING ASSETS AND LIABILITIES:
accounts receivable		(1,106,337	)		(2,188,908	)
employee loan receivable		(34,091	)		3,573
station and other receivables		81,897			99,576
income tax deposit		(377,761	)		—
prepaid expenses and other assets		(1,440,766	)		(699,719	)
accounts payable and accrued transportation costs		5,772,606			2,018,439
commissions payable		(778,642	)		(153,997	)
other accrued costs		64,901			145,942
income taxes payable		(333,999	)		136,101
other long-term liabilities		(34,146	)		96,119
deferred rent liability		12,306			—
Net cash provided by operating activities		3,950,398			1,792,784
CASH FLOWS USED FOR INVESTING ACTIVITIES:
Acquisition of Isla International, Ltd.		(7,656,582	)		—
Purchase of furniture and equipment		(328,113	)		(169,684	)
Payments made to former shareholders of acquired operations		(515,525	)		(336,509	)
Net cash used for investing activities		(8,500,220	)		(506,193	)
CASH FLOWS PROVIDED BY (USED FOR) FINANCING ACTIVITIES:
Repayments to credit facility, net of credit fees		(2,945,032	)		(1,321,392	)
Repayments of notes payable to former shareholders of acquired operations		(98,725	)		—
Proceeds from debt issuance to Caltius, net of debt issuance costs of $637,407		9,362,593			—
Distributions to non-controlling interest		(84,000	)		(78,000	)
Purchases of treasury stock		—			(471,265	)
Net cash provided by (used for) financing activities		6,234,836			(1,870,657	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		1,685,014			(584,066	)
CASH AND CASH EQUIVALENTS, BEGINNING OF  PERIOD		434,185			682,108
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	2,119,199		$	98,042
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Income taxes paid	$	1,487,663		$	781,768
Interest paid	$	181,899		$	62,438

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RADIANT LOGISTICS, INC.
Condensed Consolidated Statements of Cash Flows (continued)
(unaudited)

Supplemental disclosure of non-cash investing and financing activities:

In September 2010, the Company revised its estimate of the "Tier-One Earn-Out Payment" (see Note 4) relating to the acquisition of Adcom for the year ended June 30, 2010, resulting in an increase to goodwill and the amount due to the former shareholders of acquired operations of $28,522.

In December 2010, the Company issued 732,038 shares of common stock at a fair value of $0.35 per share in satisfaction of the $258,510 Adcom earn-out payment for the year ended June 30, 2010, resulting in a decrease to the amount due to former shareholders of acquired operations, an increase in common stock issuable of $732 and an increase in additional paid-in capital of $257,778.

In December 2011, the Company issued 500,000 shares of common stock at a fair value of $2.35 per share related to the funding received from Caltius and used in the acquisition of Isla, resulting in a decrease to notes payable and other long-term debt of $1,175,000, an increase in common stock issuable of $500 and an increase in additional paid-in capital of $1,174,500.

In December 2011, the Company issued 134,475 shares of common stock at a fair value of $2.29 per share in satisfaction of the $308,548 Adcom earn-out payment for the year ended June 30, 2011, resulting in a decrease to the amount due to former shareholders of acquired operations, an increase in common stock issuable of $134 and an increase in additional paid-in capital of $308,414.

The accompanying notes form an integral part of these condensed consolidated financial statements.

8

RADIANT LOGISTICS, INC.
Notes to Condensed Consolidated Financial Statements
(unaudited)

NOTE 1 – THE COMPANY AND BASIS OF PRESENTATION

The Company

Radiant Logistics, Inc. (the "Company") is a non-asset based transportation and logistics services company providing customers domestic and international freight forwarding services and an expanding array of value added supply chain management services, including order fulfillment, inventory management and warehousing. The Company is executing a strategy to expand operations through a combination of organic growth and the strategic acquisition of best-of-breed, non-asset based transportation and logistics providers.

The Company completed the first step in its business strategy through the acquisition of Airgroup Corporation ("Airgroup") effective as of January 1, 2006. Airgroup is a Bellevue, Washington based non-asset based logistics company providing domestic and international freight forwarding services through a network which includes a combination of company-owned and exclusive agent offices across North America.

The Company continues to identify a number of additional companies as suitable acquisition candidates and has completed four material acquisitions since its acquisition of Airgroup. In November 2007, the Company acquired the Automotive Services Group in Detroit, Michigan to service the automotive industry.In September 2008, the Company acquired Adcom Express, Inc. d/b/a Adcom Worldwide ("Adcom"), adding an additional 30 locations across North America and augmenting the Company’s overall domestic and international freight forwarding capabilities. In April 2011, the Company acquired DBA Distribution Services, Inc., d/b/a Distribution by Air ("DBA"), adding an additional 26 locations across North America further expanding its physical network and service capabilities. In December 2011, the Company acquired Laredo, Texas-based Isla, International Ltd, to serve as the Company’s gateway to Mexico.

In connection with the acquisition of Adcom, the Company changed the name of Airgroup Corporation to Radiant Global Logistics, Inc. ("RGL") in order to better position its centralized back-office operations to service a multi-brand network. RGL, through the Airgroup, Adcom and DBA network brands, has a diversified account base including manufacturers, distributors and retailers using a network of independent carriers and international agents positioned strategically around the world.

The Company’s growth strategy will continue to focus on both organic growth and acquisitions. From an organic perspective, the Company will focus on strengthening existing and expanding new customer relationships. One of the drivers of the Company’s organic growth will be retaining existing, and securing new exclusive agency locations. Since the Company’s acquisition of Airgroup in January 2006, the Company has focused its efforts on the build-out of its network of exclusive agency offices, as well as enhancing its back-office infrastructure, transportation and accounting systems. The Company will continue to search for targets that fit within its acquisition criteria.

Interim Disclosure

The condensed consolidated financial statements included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations. The Company’s management believes that the disclosures are adequate to make the information presented not misleading. These condensed financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2011.

The interim period information included in this Quarterly Report on Form 10-Q reflects all adjustments, consisting of normal recurring adjustments, that are, in the opinion of the Company’s management, necessary for a fair statement of the results of the respective interim periods. Results of operations for interim periods are not necessarily indicative of results to be expected for an entire year.

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Basis of Presentation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries as well as a single variable interest entity, Radiant Logistics Partners LLC ("RLP"), which is 40% owned by RGL and whose accounts are included in the consolidated financial statements. All significant intercompany balances and transactions have been eliminated.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) Use of Estimates

The preparation of financial statements and related disclosures in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Such estimates include revenue recognition, accruals for the cost of purchased transportation, the fair value of acquired assets and liabilities, accounting for the issuance of shares and share based compensation, the assessment of the recoverability of long-lived assets and goodwill, the establishment of an allowance for doubtful accounts and the valuation allowance for deferred tax assets. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the period that they are determined to be necessary. Actual results could differ from those estimates.

b) Fair Value Measurements

In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.

c) Fair Value of Financial Instruments

The fair values of the Company’s receivables, income tax deposit, accounts payable and accrued transportation costs, commissions payable, other accrued costs, and amounts due to former shareholders of acquired operations approximate the carrying values dues to the relatively short maturities of these instruments. The fair value of the Company’s credit facility, DBA notes payable, and other long-term liabilities would not differ significantly from the recorded amount if recalculated based on current interest rates. The fair value of the subordinated Caltius notes payable is not practicable to determine given the complex terms associated with this instrument. Contingent consideration attributable to the Company's recent acquisition of Isla is reported at fair value. 

d) Cash and Cash Equivalents

For purposes of the statements of cash flows, cash equivalents include all highly liquid investments with original maturities of three months or less which are not securing any corporate obligations.

e) Concentrations

The Company maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts.

f) Accounts Receivable

The Company’s receivables are recorded when billed and represent claims against third parties that will be settled in cash. The carrying value of the Company’s receivables, net of the allowance for doubtful accounts, represents their estimated net realizable value. The Company evaluates the collectability of accounts receivable on a customer-by-customer basis. The Company records a reserve for bad debts against amounts due to reduce the net recognized receivable to an amount the Company believes will be reasonably collected. The reserve is a discretionary amount determined from the analysis of the aging of the accounts receivable, historical experience and knowledge of specific customers.

10

On occasion, the Company extends credit to agent-based stations.

g) Furniture and Equipment

Technology (computer software, hardware, and communications), furniture, and equipment are stated at cost, less accumulated depreciation over the estimated useful lives of the respective assets. Depreciation is computed using five to seven year lives for vehicles, communication, office, furniture, and computer equipment using the double declining balance method. Computer software is depreciated over a three year life using the straight line method of depreciation. For leasehold improvements, the cost is depreciated over the shorter of the lease term or useful life on a straight line basis. Upon retirement or other disposition of these assets, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss, if any, is reflected in other income or expense. Expenditures for maintenance, repairs and renewals of minor items are charged to expense as incurred. Major renewals and improvements are capitalized.

h) Goodwill

The Company performs an annual impairment test for goodwill. The first step of the impairment test requires that the Company determine the fair value of its reporting unit, and compare the fair value to the reporting unit's carrying amount. The Company has only one reporting unit. To the extent the reporting unit's carrying amount exceeds its fair value, an indication exists that the reporting unit's goodwill may be impaired and the Company must perform a second, more detailed, impairment assessment. The second impairment assessment involves allocating the reporting unit’s fair value to all of its recognized and unrecognized assets and liabilities in order to determine the implied fair value of the reporting unit’s goodwill as of the assessment date. The implied fair value of the reporting unit’s goodwill is then compared to the carrying amount of goodwill to quantify an impairment charge as of the assessment date. The Company performs its annual impairment test effective as of April 1 of each year, unless events or circumstances indicate impairment may have occurred before that time. As of December 31, 2011, management believes there are no indications of impairment.

i) Long-Lived Assets

Acquired intangibles consist of customer-related intangibles and covenants not to compete ("CNTC") agreements arising from our acquisitions. Customer-related intangibles are amortized using accelerated methods over approximately five years and CNTC agreements are amortized using the straight-line method over the term of the underlying agreement (see Notes 5, 6 and 7).

The Company reviews long-lived assets to be held-and-used for impairment whenever events or changes in circumstances indicate the carrying amount of the assets may not be recoverable. If the sum of the undiscounted expected future cash flows over the remaining useful life of a long-lived asset is less than its carrying amount, the asset is considered to be impaired. Impairment losses are measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risks associated with the recovery of the asset. Assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. Management has performed a review of all long-lived assets and has determined no impairment of the respective carrying value has occurred as of December 31, 2011.

j) Commitments

The Company has operating lease commitments for equipment rentals, office space, and warehouse space under non-cancelable operating leases expiring at various dates through May 2021. As of December 31, 2011, minimum future lease payments under these non-cancelable operating leases for the next five fiscal years and thereafter are as follows:

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Fiscal Year Ending June 30	Amount
2012 (remaining portion)	$	1,012,459
2013		2,025,176
2014		1,862,197
2015		1,582,709
2016		1,011,222
Thereafter		1,611,368
Total minimum lease payments	$	9,105,131

Rent expense amounted to $532,352 and $982,351 for the three and six months ended December 31, 2011, respectively. Rent expense amounted to $160,846 and $342,559 for the three and six months ended December 31, 2010, respectively.

k) 401(k) Savings Plan

The Company has employee savings plans under which the Company provides a discretionary matching contribution. During the three months ended December 31, 2011 and 2010, the Company’s contributions under the plans were $30,993 and $27,585 respectively. During the six months ended December 31, 2011 and 2010, the Company’s contributions under the plans were $58,545 and $51,818 respectively.

l) Income Taxes

Deferred income tax assets and liabilities are recognized for the expected future tax consequences of events that have been reflected in the consolidated financial statements. Deferred tax assets and liabilities are determined based on the differences between the book values and the tax bases of particular assets and liabilities. Deferred tax assets and liabilities are measured using tax rates in effect for the years in which the differences are expected to reverse. A valuation allowance is provided to offset the net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company reports a liability for unrecognized tax benefits resulting from uncertain income tax positions taken or expected to be taken in an income tax return. Estimated interest and penalties are recorded as a component of interest expense or other expense, respectively.

m) Revenue Recognition and Purchased Transportation Costs

The Company derives its revenue from transportation and other value added services including warehousing and fulfillment services.

As a non-asset based carrier, the Company does not own transportation assets. The Company generates the major portion of its air and ocean freight revenues by purchasing transportation services from direct (asset-based) carriers and reselling those services to its customers. Based upon the terms in the contract of carriage, revenues related to shipments where the Company issues a House Airway Bill ("HAWB") or a House Ocean Bill of Lading ("HOBL") are recognized at the time the freight is tendered to the direct carrier at origin. Costs related to the shipments are also recognized at this same time based upon anticipated margins, contractual arrangements with direct carriers, and other known factors. The estimates are routinely monitored and compared to actual invoiced costs. The estimates are adjusted as deemed necessary by the Company to reflect differences between the original accruals and actual costs of purchased transportation.

This method generally results in recognition of revenues and purchased transportation costs earlier than the preferred methods under generally accepted accounting principles ("GAAP"), which do not recognize revenue until a proof of delivery is received or which recognize revenue as progress on the transit is made. The Company’s method of revenue and cost recognition does not result in a material difference from amounts that would be reported under such other methods.

All other revenue, including revenue from other value added services including warehousing and fulfillment services, is recognized upon completion of the service.

n) Share-Based Compensation

The Company accounts for share-based compensation under the fair value recognition provisions such that compensation cost is measured at the grant date based on the value of the award and is expensed ratably over the vesting period. Determining the fair value of share-based awards at the grant date requires judgment, including estimating the percentage of awards which will be forfeited, stock volatility, the expected life of the award, and other inputs. If actual forfeitures differ significantly from the estimates, share-based compensation expense and the Company's results of operations could be materially impacted.

12

For the three months ended December 31, 2011, the Company recorded share based compensation expense of $41,165, which, net of income taxes, resulted in a $25,523 reduction of net income. For the three months ended December 31, 2010, the Company recorded share based compensation expense of $25,833, which, net of income taxes, resulted in a $16,016 reduction of net income.

For the six months ended December 31, 2011, the Company recorded share based compensation expense of $65,409, which, net of income taxes, resulted in a $40,554 reduction of net income. For the six months ended December 31, 2010, the Company recorded share based compensation expense of $80,771, which, net of income taxes, resulted in a $50,078 reduction of net income.

o) Basic and Diluted Income per Share

Basic income per share is computed by dividing net income attributable to common stockholders by the weighted average number of common shares outstanding. Diluted income per share is computed similar to basic income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares, such as stock options, had been issued and if the additional common shares were dilutive.

For the three months ended December 31, 2011, the weighted average outstanding number of potentially dilutive common shares totaled 34,874,343, including options to purchase 4,529,735 shares of common stock at December 31, 2011, of which 214,493 were excluded as their effect would have been anti-dilutive. For the three months ended December 31, 2010, the weighted average outstanding number of potentially dilutive common shares totaled 31,212,861 including options to purchase 3,647,779 shares of common stock at December 31, 2010, of which 1,020,000 were excluded as their effect would have been anti-dilutive.

For the six months ended December 31, 2011, the weighted average outstanding number of potentially dilutive common shares totaled 34,742,154, including options to purchase 4,529,735 shares at December 31, 2011, of which 214,493 were excluded as their effect would have been anti-dilutive. For the six months ended December 31, 2010, the weighted average outstanding number of potentially dilutive common shares totaled 30,968,361, including options to purchase 3,647,779 shares at December 31, 2010, of which 1,020,000 were excluded as their effect would have been anti-dilutive.

The following table reconciles the numerator and denominator of the basic and diluted per share computations for earnings per share as follows: 

	Three months ended December 31,				Six months ended December 31,
	2011		2010		2011		2010
Weighted average basic shares outstanding		31,954,955		30,122,700		31,815,696		30,296,880
Options		2,919,388		1,090,161		2,926,458		671,481
Weighted average dilutive shares outstanding		34,874,343		31,212,861		34,742,154		30,968,361

p) Other Comprehensive Income

The Company has no components of Other Comprehensive Income and, accordingly, no Statement of Comprehensive Income has been included in the accompanying condensed consolidated financial statements.

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NOTE 3 – RECENT ACCOUNTING PRONOUNCEMENTS

In September 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Goodwill for Impairment. The guidance in ASU 2011-08 is intended to reduce complexity and costs by allowing an entity the option to make a qualitative evaluation about the likelihood of goodwill impairment to determine whether it should calculate the fair value of a reporting unit. The amendments also improve previous guidance by expanding upon the examples of events and circumstances that an entity should consider between annual impairment tests in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Also, the amendments improve the examples of events and circumstances that an entity having a reporting unit with a zero or negative carrying amount should consider in determining whether to measure an impairment loss, if any, under the second step of the goodwill impairment test. The amendments in this ASU are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011, if an entity’s financial statements for the most recent annual or interim period have not yet been issued. The adoption of this guidance is not expected to have a material impact on the Company’s financial position or results of operations.

NOTE 4 – ACQUISITION OF ADCOM EXPRESS, INC.

On September 5, 2008, the Company entered into and closed a Stock Purchase Agreement (the "SPA") pursuant to which it acquired 100% of the issued and outstanding stock of Adcom Express, Inc., d/b/a Adcom Worldwide ("Adcom"), a privately-held Minnesota corporation founded in 1978. At the time of the acquisition, Adcom provided a full range of domestic and international freight forwarding solutions to a diversified account base including manufacturers, distributors and retailers through a combination of three company-owned and twenty-seven independent agency locations across North America.

Contingent consideration associated with the acquisition of Adcom included "Tier-1 Earn-Out Payments" of up to $700,000 annually, covering the four year earn-out period through June 30, 2012, based upon Adcom achieving certain levels of "Gross Profit Contribution" (as defined in the Agreement), payable 50% in cash and 50% in shares of Company common stock (valued at delivery date); and a "Tier-2 Earn-Out Payment" of up to $2,000,000, equal to 20% of the amount by which the Adcom cumulative Gross Profit Contribution exceeds $16,560,000 during the four year earn-out period. The Tier-1 Earn-Out Payments and certain amounts of the Tier-2 Payments may be subject to acceleration upon occurrence of a "Corporate Transaction" (as defined in the SPA), which includes a sale of Adcom or the Company, or certain changes in corporate control.

Mr. Friedman, the sole shareholder of Adcom, earned $617,095 in Tier-1 earn-out payments for the period ending June 30, 2011. This Tier-1 earn-out was paid 50% in cash and 50% paid in Company stock during the six months ending December 31, 2011.

Assuming minimum targeted earnings levels are achieved, the following table summarizes our contingent base earn-out payments related to the acquisition of Adcom, for the fiscal year indicated based on achieving gross profit contributions (in thousands):

Estimated payment anticipated for fiscal year(1):	2013
Earn-out period:	7/1/2011 – 6/30/2012
Earn-out payments:
Cash	$	350
Equity		350
Total potential earn-out payments	$	700
Total gross margin targets	$	4,320

(1) Earn-out payments are paid October 1 following each fiscal year end in a combination of cash and Company common stock.

No Tier II payments have been paid and management does not believe Tier II payments will be earned for the year ending June 30, 2012.

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NOTE 5 – ACQUISITION OF DBA DISTRIBUTION SERVICES, INC.

On April 6, 2011, the Company closed on an Agreement and Plan of Merger (the "Agreement") pursuant to which the Company acquired DBA Distribution Services, Inc. ("DBA"), a privately-held New Jersey corporation founded in 1981. At the time of the acquisition DBA serviced a diversified account base including manufacturers, distributors and retailers through a combination of company-owned logistics centers located in Somerset, New Jersey and Los Angeles, California and twenty-four agency offices located across North America. For financial accounting purposes, the transaction was deemed to be effective as of April 1, 2011. The shares of DBA were acquired by the Company via a merger transaction pursuant to which DBA was merged into a newly-formed subsidiary of the Company. The $12.0 million transaction consisted of cash of $5.4 million paid at closing, the delivery of $4.8 million in seller notes payable over the next three years and $1.8 million in connection with the achievement of certain integration milestones to be paid within 180 days after the milestones have been achieved; however, no later than the 18th month anniversary of the closing. In May 2011, the Company elected to satisfy $2.4 million of the seller notes through the issuance of shares of the Company's common stock. The remaining seller notes may be subject to acceleration upon occurrence of a “Corporate Transaction” (as defined in the Form of Note), which includes a future sale of DBA or Radiant, or certain changes in corporate control. The cash component of the transaction was financed through a combination of our existing funds and funds available under an existing revolving credit facility provided by Bank of America, N.A.

The total net assets acquired were $12.0 million.  The following table summarizes the final allocation of the purchase price based on the estimated fair value of the acquired assets and liabilities at April 6, 2011:

Current assets	$	16,909,820
Furniture and equipment		562,257
Deferred tax asset		723,666
Intangibles		1,801,562
Goodwill		5,021,603
Other assets		392,562
Total assets acquired		25,411,470
Current liabilities		12,572,203
Long term deferred tax liability		684,594
Other long term liabilities		154,673
Total liabilities acquired		13,411,470
Net assets acquired	$	12,000,000

The fair value of the financial assets acquired included receivables with a fair value of $14,675,079 as of the acquisition date. The gross amount due under the contracts at the acquisition date was $15,728,582, of which $1,053,503 was expected to be uncollectible.

The fair values of the intangible assets were estimated using a discounted cash flow approach with Level 3 inputs. Under this method, an intangible asset's fair value is equal to the present value of the incremental after-tax cash flows (excess earnings) attributable solely to the intangible asset over its remaining useful life. To calculate fair value, the Company used risk-adjusted cash flows discounted at rates considered appropriate given the inherent risks associated with each type of asset. The Company believes the level and timing of cash flows appropriately reflect market participant assumptions.

The goodwill recognized is attributable primarily to the expected cost synergies associated with eliminating redundancies and migrating back office operations of DBA to the Company, in addition to an expectation of better buy rates from some carriers due to increased volumes associated with the acquisition of DBA.  The goodwill recorded is not expected to be deductible for income tax purposes.

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NOTE 6 – ACQUISITION OF ISLA INTERNATIONAL, LTD.

On December 1, 2011, through a wholly-owned subsidiary, RGL, the Company acquired substantially all of the assets of Laredo, Texas based Isla International, Ltd. ("Isla"), a privately-held company founded in 1996. At the time of the acquisition, Isla provided bilingual expertise in both north and south bound cross-border transportation and logistics services to a diversified account base including manufacturers in the automotive, appliance, electronics and consumer packaged goods industries from its strategically-aligned location in Laredo, Texas and will serve as the Company’s gateway to the Mexico markets.  The transaction was structured as an asset purchase and valued at up to approximately $15.0 million, consisting of: (i) cash of $7,656,582 paid at closing, (ii) $1.325 million payable in shares of our restricted stock on the three-month anniversary of the closing (to be valued based upon a 30-day volume weighted average price to be calculated preceding the delivery of the shares); (iii) up to $3.975 million in aggregate "Tier-1 Earn-Out Payments" covering the four-year earn-out period immediately following closing, based upon the acquired Isla business unit generating a "Modified Gross Profit Contribution" (as defined within the Asset Purchase Agreement) of $6,927,644 for each twelve month earn-out period following closing; and (iv) a "Tier-2 Earn-Out Payment" after the fourth anniversary of the closing, equal to 20% of the amount by which the aggregate "Modified Gross Profit Contribution" of the acquired Isla business unit during the four-year earn-out period exceeds $27,710,576, with such payment not to exceed $2.0 million.  The various Tier-1 Earn-Out Payments and the Tier-2 Earn-Out Payment shall be made in a combination of cash and our common stock, as we may, at our sole discretion, elect to satisfy up to 25% of each of the earn-out payments through the issuance of our common stock valued based upon a 30-day volume weighted average price to be calculated preceding the delivery of the shares.  

The transaction was financed through the net proceeds made available through the issuance of $10.0 million in subordinated debt. As well, in connection with the transaction, the Company entered into an amended and restated revolving credit facility with the Company's senior lender, Bank of America, N.A.  

The total recorded purchase price consisted of an initial cash payment of $7,656,582, $1.325 million in future payments and estimated contingent consideration associated with the Tier-1 and Tier-2 earn-outs of $4.075 million. The following table summarizes the preliminary allocation of the purchase price based on the estimated fair value of the acquired assets and liabilities at December 1, 2011:

Furniture and equipment	$	112,736
Intangibles		7,847,976
Goodwill		5,095,870
Total assets acquired	$	13,056,582

The fair values of the intangible assets was estimated using a discounted cash flow approach with Level 3 inputs. Under this method, an intangible asset's fair value is equal to the present value of the incremental after-tax cash flows (excess earnings) attributable solely to the intangible asset over its remaining useful life. To calculate fair value, the Company used risk-adjusted cash flows discounted at rates considered appropriate given the inherent risks associated with each type of asset. The Company believes the level and timing of cash flows appropriately reflect market participant assumptions.

The fair value of the contingent consideration was estimated using future projected gross margins of Isla and the corresponding future earn-out payments. To calculate fair value, the future earn-out payments were then discounted using Level 3 inputs. The Company believes the discount rate used to discount the earn-out payments reflect market participant assumptions.

The goodwill recognized is attributable primarily to the strategic location of the Isla operation along the U.S-Mexico border, allowing Isla to serve as the Company's gateway to Mexico and a strategic differentiator in the marketplace. The goodwill recorded is expected to be deductible for income tax purposes over a period of 15 years.

Since acquisition, Isla produced revenue of approximately $1.5 million and a net loss of less than $0.1 million, including other purchase accounting charges resulting from the acquisition.

If the acquisition had taken place effective July 1, 2010, the result would have produced combined revenue of $157.4 million and $153.4 million and combined net income of $2.2 million and $3.0 million for the six months ended December 31, 2011 and 2010, respectively. The unaudited pro forma financial information presented is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisitions and any borrowings undertaken to finance the acquisition had taken place at the beginning of fiscal 2011.

Basic earnings per share was $.07 for the six months ended December 31, 2011 and fully diluted earnings per share was $.06 for the six months ended December 31, 2011.  Basic and diluted earnings per share was $.10 for the six months ended December 31, 2010. . 

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NOTE 7 – ACQUIRED INTANGIBLE ASSETS

The table below reflects acquired intangible assets related to the acquisitions of Airgroup, Automotive Services Group, Adcom, DBA and Isla:

	As of December 31, 2011				As of June 30, 2011
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortizable intangible assets:
Customer related	$	15,201,538	$	5,446,998	$	7,533,562	$	4,702,100
Covenants not to compete		300,000		91,306		120,000		71,616
Total	$	15,501,538	$	5,538,304	$	7,653,562	$	4,773,716
Aggregate amortization expense:
For six months ended December 31, 2011			$	764,588
For six months ended December 31, 2010			$	493,575
Aggregate amortization expense for the years ending June 30:
2012 – For the remainder of the year			$	1,570,842
2013				2,369,879
2014				1,546,555
2015				1,239,063
2016				2,211,061
2017				1,025,834
Total			$	9,963,234

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NOTE 8 – VARIABLE INTEREST ENTITY

Certain entities in which equity investors do not have the characteristics of a controlling financial interest or do not have the sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties are considered "variable interest entities". RLP is 40% owned by Radiant Global Logistics ("RGL"), qualifies as a variable interest entity and is included in the Company’s condensed consolidated financial statements (see Note 9). RLP commenced operations in February 2007. Non-controlling interest recorded as an expense on the statements of operations was $89,442 and $92,832 for the six months ended December 31, 2011 and 2010, respectively.

The following table summarizes the balance sheets of RLP:

	December 31,		June 30,
	2011		2011
ASSETS
Accounts receivable	$	1,997	$	2,012
Accounts receivable – Radiant Logistics		173,217		170,030
Prepaid expenses and other current assets		2,736		1,191
Total assets	$	177,950	$	173,233
LIABILITIES AND PARTNERS' CAPITAL
Other accrued costs	$	12,618	$	16,971
Total liabilities				16,971
Partners' capital		165,332		156,262
Total liabilities and partners' capital	$	177,950	$	173,233

NOTE 9 – RELATED PARTY

RLP is owned 40% by RGL and 60% by Radiant Capital Partners, LLC ("RCP"), a company for which the Chief Executive Officer of the Company is the sole member. RLP is a certified minority business enterprise which was formed for the purpose of providing the Company with a national accounts strategy to pursue corporate and government accounts with diversity initiatives. RCP’s ownership interest entitles it to a majority of the profits and distributable cash, if any, generated by RLP. The operations of RLP are intended to provide certain benefits to the Company, including expanding the scope of services offered by the Company and participating in supplier diversity programs not otherwise available to the Company. In the course of evaluating and approving the ownership structure, operations and economics emanating from RLP, a committee consisting of the independent Board member of the Company, considered, among other factors, the significant benefits provided to the Company through association with a minority business enterprises, particularly as many of the Company’s largest current and potential customers have a need for diversity offerings. In addition, the Committee concluded that the economic relationship with RLP was on terms no less favorable to the Company than terms generally available from unaffiliated third parties. RLP is consolidated in the financial statements of the Company (see Note 8).

NOTE 10 – FURNITURE AND EQUIPMENT

Furniture and equipment consists of the following:

	December 31,			June 30,
	2011			2011
Vehicles	$	33,788		$	33,788
Communication equipment		31,359			31,359
Office equipment		534,038			511,872
Furniture and fixtures		206,318			122,488
Computer equipment		750,690			733,819
Computer software		1,487,058			1,283,581
Leasehold improvements		755,697			641,188
		3,798,948			3,358,095
Less:  Accumulated depreciation and amortization		(2,155,754	)		(1,930,032	)
Furniture and equipment – net	$	1,643,194		$	1,428,063

Depreciation and amortization expense related to furniture and equipment was $225,718 and $158,491 for the six months ended December 31, 2011 and 2010, respectively.

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NOTE 11 – NOTES PAYABLE AND OTHER LONG-TERM DEBT

Notes payable and other long-term debt consist of the following;

	December 31, 2011			June 30, 2011
Notes Payable – Caltius	$	10,000,000		$	—
Less: Original Issue Discount (net)		(1,162,448	)		—
Less: Debt Issuance Costs (net)		(630,598	)		—
Total Caltius Senior Subordinated  Notes (net)		8,206,954			—
Notes Payable – DBA shareholders		2,301,275			2,400,000
Long-Term Credit Facility		7,324,236			10,269,268
Total notes payable and other long-term debt		17,832,465			12,669,268
Less: Current portion		(767,092	)		(800,000	)
Total notes payable and other long-term debt	$	17,065,373		$	11,869,268

Caltius Senior Subordinated Notes

In connection with the Company’s acquisition of Isla International, Ltd., effective as of December 1, 2011, the Company entered into an Investment Agreement with Caltius Partners IV, LP and Caltius Partners Executive IV, LP (collectively, "Caltius"). Under the Investment Agreement, Caltius provided the Company with a $10.0 million aggregate principal amount evidenced by the issuance of senior subordinated notes (the "Senior Subordinated Notes"), the net proceeds of which were primarily used to finance the cash payments due at closing of the Isla transaction. The Senior Subordinated Notes accrue interest at the rate of 13.5% per annum (the "Accrual Rate"), and must be paid currently in cash on a quarterly basis at a rate of 11.75% per annum (the "Pay Rate"). The outstanding principal balance of the Senior Subordinated Notes will be increased by an amount (the "PIK Amount") equal to the difference between interest accrued at the Accrual Rate and Interest Accrued at the Pay Rate unless the Company makes an election to pay the PIK Amount in cash. The Senior Subordinated Notes are non-amortizing, with all principal due upon maturity at December 1, 2016.

Under the Investment Agreement, the Company also issued 500,000 restricted shares of Company common stock to Caltius. The Company agreed to issue an additional 100,000 restricted shares of Company common stock to Caltius (all shares issued to Caltius are sometimes referred to herein collectively as the "Caltius Shares") if within the first twelve months of the financing, the Company's shares are not traded on the New York Stock Exchange Amex Equities ("AMEX").

The terms of the Investment Agreement are subject to certain customary affirmative and negative covenants. These include, but are not limited to, restrictions on: (i) types and amounts of indebtedness that can be incurred; (ii) dividends that can be paid; (iii) distributions that can be made; (iv) certain asset sales, lease commitments, capital expenditures, acquisitions and investments. In addition, the Investment Agreement prohibits the Company from incurring any earn-out obligations or seller notes in connection with any future acquisitions, unless explicitly subordinated to the Senior Subordinated Notes, or, in general, any indebtedness that is subordinated to the Senior Facility, unless such indebtedness is also subordinated to the Senior Subordinated Notes.

The Investment Agreement contains financial covenants including, but not limited to, funded leverage ratio covenants, senior funded leverage ratio covenants and fixed charges ratio covenants. The first financial covenant limits our ratio of "Funded Debt" (as defined therein) to consolidated EBITDA (as adjusted) and measured on a rolling four quarter basis to 4.25 to 1, reducing to 4.00 to 1 at March 31, 2013, reducing to 3.75 to 1 at March 31, 2014 and reducing to 3.50 to 1 at March 31, 2015. The second financial covenant limits the Company's ratio of Senior Debt (defined as amounts borrowed from the Bank and the Senior Subordinated Notes) to consolidated EBITDA (as adjusted) and measured on a rolling four quarter basis to 3.75 to 1, reducing to 3.50 to 1 on March 31, 2013, reducing to 3.25 to 1 on March 31, 2014 and reducing to 3.00 to 1 on March 31, 2015. The third financial covenant requires that the Company maintains a basic fixed charge coverage ratio of at least 1.05 to 1.0.

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Under the Investment Agreement, the Company is permitted to make additional acquisitions only if certain conditions are satisfied, including the following: (i) the acquisition constitutes a business reasonably related to our then current business; (ii) no default or event of default shall exist prior to or will be caused as a result of such acquisition; (iii) Caltius has been provided with prior written notice of such acquisition, such notice to include (a) a description of the property or equity interests to be purchased, (b) the price and terms of such acquisition, (c) a certificate of a financial officer, certifying as to certain information requested in the Investment Agreement, and (d) such other information with respect thereto as is reasonably requested by Caltius; (iv) in the event of an acquisition of equity interests of a company, such company shall become a wholly-owned subsidiary; (v) the target company shall have as of the last day of the most recent fiscal quarter of such company ending on or immediately prior to the date of such acquisition actual (or pro forma to the extent approved in writing by Caltius) EBITDA and net income greater than $1, in each case for the 12 month period ending on such date; (vi) the aggregate cash consideration payable at the closing of the acquisition shall not exceed $7.5 million for any single transaction and $12.5 million in the aggregate in any fiscal year or such other amount approved in writing by the Caltius; provided, however, that (a) the foregoing limitation shall exclude cash consideration derived from the proceeds of sales of equity interests issued by the Company during the nine-month period prior to the closing of such acquisition to the extent the Company notifies Caltius in writing of the use of such cash consideration from sales such equity interests in such transaction or transactions and (b) the written consent of Caltius shall be required if the aggregate cash consideration payable at the closing of such transaction is equal to or greater than $25.0 million; (vii) the post-closing availability under the Senior Facility is at least $4.0 million on a pro forma basis; (viii) the number of permitted acquisitions that the Company and its co-borrowers have completed in such fiscal year does not exceed three; and (ix) the Company shall have provided to Caltius certain deliverables for such acquisition.

The Investment Agreement contains a number of events of default, certain of which are typical for transactions of this type, including, without limitation, the following events: (i) failure to pay amounts due under the Senior Subordinated Notes; (ii) a breach of any representation or warranty contained in the Investment Agreement or related documents; (iii) failure to comply with or perform certain covenants under the Investment Agreement; (iv) any material default under any of our indebtedness or that of the co-borrowers, including unsatisfied judgments, in excess of agreed upon per item and aggregate amounts; (v) the bankruptcy, insolvency or the appointment of a receiver; (vi) the dissolution, liquidation, winding-up or termination of the Company or any of the co-borrowers; (vii) the Company or any co-borrower suspends or is enjoined, restrained or in any way prevented by the order of any governmental authority from conducting all or any material part of its business for more than 30 calendar days; or (viii) Bohn Crain ceases to serve as the Chief Executive Officer of the Company and the Company does not appoint a successor acceptable to Caltius within 30 days after the date on which Bohn Crain is no longer serving as the Chief Executive Officer.

The co-borrowers under the Investment Agreement include Radiant Logistics, Inc., RGL (f/k/a Airgroup Corporation), Adcom (d/b/a Adcom Worldwide), DBA (d/b/a Distribution by Air), Radiant Transportation Services ("RTS", f/k/a Radiant Logistics Global Services, Inc.), Radiant Customs Services, Inc. ("RCS") and RLP.

In connection with the Caltius financing and effective as of December 1, 2011, the Company also entered into an Investor Rights Agreement with Caltius under which the Company agreed to provide limited registration rights covering the Caltius Shares and agreed to certain contingent redemption rights regarding the Caltius Shares. Under the Investor Rights Agreement, Caltius has the right to cause the Company to redeem the Caltius Shares at their then appraised fair market value if (subject to certain notice and cure periods): (a) the Company’s shares of common stock are no longer listed and registered, quoted or eligible for quotation, on an exchange or automated quotation system; (b) the Company has been unable to timely file all periodic reports required by the Securities Exchange Act of 1934; and (c) the Company has otherwise been unable to satisfy our registration rights requirements regarding the Caltius Shares.

20

Under the Investor Rights Agreement, the Company agreed to provide demand registration rights covering the Caltius Shares through the end of the first anniversary of the closing in the limited instances that the Company are either no longer current in our periodic reports required by the Securities Exchange Act of 1934, or the Company is otherwise unable to maintain the listing of its shares on the exchange or automated quotation system upon which they currently trade. The Company also agreed to provide "piggyback" registration rights on customary and standard terms until the earlier of: (i) such time that Caltius no longer owns any of the Caltius Shares; or (ii) the tenth anniversary of the date of the Investor Rights Agreement. The Company has agreed to provide Caltius with customary rights of indemnification and to cover certain of the expenses associated with the registration of the Caltius Shares. The demand and piggyback registration rights granted are subject to standard and customary rights of deferral, underwriter cut-back, and black-out periods.

DBA– Notes Payable

In connection with the close of DBA, the Company issued notes payable in the amount of $4.8 million payable to the former shareholders of DBA.  The seller notes accrue interest at a rate of 6.5%, and such interest is payable on a quarterly basis. The principle amount of the seller notes is payable annually on March 31 in three equal payments. The Company has repaid a portion of the note early in the amount of $98,725 in connection with termination of some former DBA employees who were also shareholders.

The note contained an Optional Forced Conversion Right which allowed the Company in its sole discretion on or before the three month anniversary of the closing date, to elect to satisfy up to $2.4 million of the notes payable by the issuance of Company common stock. Accordingly, in May 2011, the Company elected to satisfy $2.4 million of the seller notes through the issuance of shares of the Company's common stock.

Bank of America – Credit Facility

Effective December 1, 2011, the Company entered into an agreement (the "Loan Agreement") with Bank of America, N.A. (the "Lender"). Under the Loan Agreement, the Lender provided the Company with a $20.0 million senior secured credit facility, including a $1.0 million sublimit to support letters of credit (collectively, the "Senior Facility"). Advances under the Senior Facility are available to fund future acquisitions, capital expenditures or for other corporate purposes. The Senior Facility had the effect of amending and fully restating our pre-existing senior credit facility with the Lender as amended from time to time, to accommodate the subordinated debt provided by Caltius, as described below. Borrowings under the Senior Facility accrue interest, at the Company’s option, at the Lender's prime rate minus 0.75% to plus 0.50% or LIBOR plus 1.75% to 3.00%, and can be adjusted up or down during the term of the Senior Facility based on the Company’s performance relative to certain financial covenants. The Senior Facility has a maturity date of November 30, 2013, and is collateralized by the Company's accounts receivable and other assets of its subsidiaries. Advances under the Senior Facility of up to 80% of eligible domestic accounts receivable and up to 60% of eligible foreign accounts receivable, are available to fund future acquisitions, capital expenditures or for other corporate purposes.

The terms of the Senior Facility are subject to certain financial and operational covenants which may limit the amount otherwise available under the Senior Facility. The first financial covenant limits the Company's ratio of "Funded Debt" (as defined therein) to consolidated EBITDA (as adjusted) and measured on a rolling four quarter basis to 4.00 to 1, reducing to 3.75 to 1 at December 31, 2012, reducing to 3.5 to 1 at December 31, 2013, and reducing to 3.25 to 1 at December 31, 2014. The second financial covenant limits the Company's ratio of Senior Debt (defined as amounts borrowed from the Bank) to consolidated EBITDA (as adjusted) and measured on a rolling four quarter basis to 2.50 to 1 and reducing to 2.25 to 1 on December 31, 2012. The third financial covenant requires the Company maintain a basic fixed charge coverage ratio of at least 1.25 to 1.0. The fourth financial covenant is a minimum profitability standard which requires the Company not to incur a net loss before taxes, amortization of acquired intangibles and extraordinary items in any two consecutive quarterly accounting periods.

Under the terms of the Senior Facility, the Company is permitted to make additional acquisitions without the consent of the Lender, only if certain conditions are satisfied. The conditions imposed by the Senior Facility include the following: (i) the absence of an event of default under the Senior Facility; (ii) the company to be acquired must be in the transportation and logistics industry; (iii) the purchase price to be paid must be consistent with the Company’s historical business and acquisition model; (iv) after giving effect for the funding of the acquisition, the Company must have undrawn availability of at least $4.0 million under the Senior Facility; (v) the Lender must be reasonably satisfied with projected financial statements the Company provides covering a twelve month period following the acquisition; (vi) the acquisition documents must be provided to the Lender and must be consistent with the description of the transaction provided to the Lender; and (vii) the number of permitted acquisitions is limited to three per fiscal year and the aggregate cash consideration payable at closing shall not exceed $7.5 million for any single transaction and $12.5 million in the aggregate, provided however the foregoing limitation shall exclude cash consideration derived from the proceeds of sales of newly issued equity interests of the Company during the nine month period prior to the closing of any such transaction and the aggregate consideration at closing is not more than $25.0 million. In the event the Company is not able to satisfy the conditions of the Senior Facility in connection with a proposed acquisition, the Company must either forego the acquisition, obtain the Lender's consent, or retire the Senior Facility.   

21

The co-borrowers of the Senior Facility include Radiant Logistics, Inc., RGL (f/k/a Airgroup Corporation), Adcom (d/b/a Adcom Worldwide), DBA (d/b/a Distribution by Air), RTS (f/k/a Radiant Logistics Global Services, Inc.), RCS and RLP. RLP has been certified as a minority business enterprise, and focuses on corporate and government accounts with diversity initiatives. As a co-borrower under the Senior Facility, the accounts receivable of RLP are eligible for inclusion within the overall borrowing base of the Company and all borrowers will be responsible for repayment of the debt associated with advances under the Senior Facility, including those advanced to RLP. At December 31, 2011, the Company was in compliance with all of its covenants.

As of December 31, 2011, the Company had $3.0 million in advances under the Senior Facility and $4,324,236 in outstanding payments which had not yet been processed by the bank. The outstanding payments have been reclassified from cash, as they will be advanced from, or against, the Senior Facility when processed by the bank.

At December 31, 2011, based on available collateral and $491,800 in outstanding letter of credit commitments, there was $16,508,200 available for borrowing under the Senior Facility based on advances outstanding.

NOTE 12 –PROVISION FOR INCOME TAXES

For the three months ended December 31, 2011, the Company recognized net income tax expense of $487,966 which consisted of current income tax expense of $220,325 and deferred income tax expense of $267,641 For the three months ended December 31, 2010, the Company recognized net income tax expense of $413,319 which consisted of current income tax expense of $293,887, and deferred income tax expense of $119,432.

For the six months ended December 31, 2011, the Company recognized net income tax expense of $889,435 which consisted of current income tax expense of $773,537 and deferred income tax expense of $115,898. For the six months ended December 31, 2010, the Company recognized net income tax expense of $918,862 which consisted of current income tax expense of $917,869, and deferred income tax expense of $993.

Tax years which remain subject to examination by federal and state authorities are the years ended June 30, 2008, 2009, 2010 and 2011.

NOTE 13 – STOCKHOLDERS’ EQUITY

Preferred Stock

The Company is authorized to issue 5,000,000 shares of preferred stock, par value at $.001 per share. As of December 31, 2011 and 2010, none of the shares were issued or outstanding.

NOTE 14 – SHARE-BASED COMPENSATION

The Company issued options to employees to purchase 207,408 shares of common stock at an exercise price of $2.36 price per share in October 2011, options to purchase 450,000 shares of common stock at an exercise price of $2.35 per share in December 2011 and options to purchase 7,085 shares of common stock at an exercise price of $2.40 price per share in December 2011. The options vest 20% per year over a five-year period.

Share based compensation costs recognized during the six months ended December 31, 2011, include compensation costs based on the fair value estimated on the grant-date for all share based payments granted to date. No options have been exercised as of December 31, 2011.

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During the six months ended December 31, 2011, the weighted average fair value per share of employee options granted in October 2011 was $1.27 and the weighted average fair value per share of employee options granted in December 2011 was $1.49. The fair value of options granted were estimated on the date of grant using the Black-Scholes option pricing model, with the following assumptions for each issuance of options:

	October 2011	December 2011
Risk-Free Interest Rate	0.47%	0.39% to 0.49%
Expected Term	6.5 years	6.5 years
Expected Volatility	58.75%	71.84%
Expected Dividend Yield	0.00%	0.00%
Forfeiture Rate	0.00%	0.00%

During the six months ended December 31, 2011 and 2010, the Company recognized stock option compensation expense of $65,409 and $80,771, respectively. The following table summarizes activity under the plan for the six months ended December 31, 2011.

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life - Years		Aggregate Intrinsic Value
Outstanding at June 30, 2011		3,865,242	$	0.58		5.57 years	$	7,049,001
Granted		664,493		2.35
Exercised		—		—
Forfeited		—		—
Expired		—		—
Outstanding at December 31, 2011		4,529,735	$	0.84		5.77 years	$	7,079,248
Exercisable at December 31, 2011		3,128,556	$	0.54		4.45 years	$	5,817,680

NOTE 15 – OPERATING AND GEOGRAPHIC SEGMENT INFORMATION

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker, or decision-making group, in making decisions regarding allocation of resources and assessing performance. The Company's chief decision-maker is the Chief Executive Officer. The Company continues to operate in a single operating segment.

The Company’s geographic operations outside the United States include shipments to and from Canada, Central America, Europe, Africa, Asia and Australia. The following data presents the Company’s revenue generated from shipments to and from these locations for the United States and all other countries, which is determined based upon the geographic location of a shipment's initiation and destination points (in thousands):

	United States				Other Countries				Total
	2011		2010		2011		2010		2011		2010
Three months ended December 31:
Revenue	$	43,005	$	25,537	$	29,609	$	18,960	$	72,614	$	44,497
Cost of transportation		28,274		16,295		24,091		14,020		52,365		30,315
Net revenue	$	14,731	$	9,242	$	5,518	$	4,940	$	20,249	$	14,182

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	United Stated				Other Countries				Total
	2011		2010		2011		2010		2011		2010
Six months ended December 31:
Revenue	$	85,320	$	49,787	$	59,127	$	41,071	$	144,447	$	90,858
Cost of transportation		55,216		30,918		47,743		31,639		102,959		62,557
Net revenue	$	30,104	$	18,869	$	11,384	$	9,432	$	41,488	$	28,301

NOTE 16 – SUBSEQUENT EVENTS

Listing on the NYSE Amex

On January 11, 2012, the Company completed the up-listing of its shares of common stock to the NYSE Amex and continues to trade under the symbol “RLGT.”

DBA Claims Notice and Related Matters

In January 2012, we asserted certain claims for indemnification against the former shareholders of DBA under  the Agreement and Plan of Merger dated March 29, 2011, relating to, among others, the failure to identify certain purchased transportation charges, the failure to identify certain related party transactions, and the breach of certain non-competition and non-solicitation covenants by one of the selling shareholders and an affiliate of such selling shareholder. In the absence of a resolution of the matter, we intend to file a formal arbitration action against the former DBA shareholders asserting these claims.

Although the arbitration and ultimate resolution of this dispute will not likely occur within the short-term, the Company believes that these breaches will not have any meaningful long term adverse effect on its overall results of operations given the Company's: (i)  termination of the previously undisclosed related party transactions, (ii) efforts to retain existing customers, (iii)  efforts through the arbitration proceeding to assert legal remedies as a result of the breaches; and (iv) efforts through a concurrent civil proceeding to assert legal remedies against a former Company employee and affiliate of a selling shareholder who we believe breached certain non-competition and non-solicitation obligations to the Company. Nevertheless, near-term earnings could be negatively impacted as a result of any legal expenses incurred in connection with matter, although such amounts may be recoverable as an off-set to future amounts otherwise due the former shareholders of DBA under the Agreement and Plan of Merger.

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This report includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding future operating performance, events, trends and plans. All statements other than statements of historical fact contained herein, including, without limitation, statements regarding our future financial position, business strategy, budgets, projected revenues and costs, and plans and objectives of management for future operations, are forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "will," "expects," "intends," "plans," "projects," "estimates," "anticipates," or "believes" or the negative thereof or any variation thereon or similar terminology or expressions. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are not guarantees and are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. While it is impossible to identify all of the factors that may cause our actual operating performance, events, trends or plans to differ materially from those set forth in such forward-looking statements, such factors include the inherent risks associated with our ability to: (i) use our current infrastructure as a "platform" upon which we can build a profitable global transportation and supply chain management company; (ii) retain and build upon the relationships we have with our exclusive agency offices; (iii) continue the development of our back office infrastructure and transportation and accounting systems in a manner sufficient to service our expanding revenues and network of operating locations; (iv) maintain and enhance the future operations of our company owned operating locations; (v) continue growing our business and maintain historical or increased gross profit margins; (vi) locate suitable acquisition opportunities; (vii) secure the financing necessary to complete any acquisition opportunities we locate; (viii) assess and respond to competitive practices in the industries in which we compete; (ix) mitigate, to the best extent possible, our dependence on current management and certain of our larger exclusive agency locations; (x) assess and respond to the impact of current and future laws and governmental regulations affecting the transportation industry in general and our operations in particular; and (xi) assess and respond to such other factors which may be identified from time to time in our Securities and Exchange Commission ("SEC") filings and other public announcements including those set forth under the caption “Risk Factors” in Part 1 Item 1A of our annual report on Form 10-K for the year ended June 30, 2011. All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the foregoing. Readers are cautioned not to place undue reliance on our forward-looking statements, as they speak only as of the date made. Except as required by law, we assume no duty to update or revise our forward-looking statements.

The following discussion and analysis of our financial condition and result of operations should be read in conjunction with the financial statements and the related notes and other information included elsewhere in this report.

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Overview

We are a non-asset based transportation and logistics company providing domestic and international freight forwarding services through a network which includes a combination of company-owned and exclusive agent offices across North America. Operating under the Airgroup, Adcom, DBA and Radiant brands, we service a diversified account base including manufacturers, distributors and retailers using a network of independent carriers and international agents positioned strategically around the world. Our principal office is located in Bellevue, Washington.

As a non-asset based provider of third-party logistics services, we seek to limit our investment in equipment, facilities and working capital through contracts and preferred provider arrangements with various transportation providers who generally provide us with favorable rates, minimum service levels, capacity assurances and priority handling status. Our non-asset based approach allows us to maintain a high level of operating flexibility and leverage a cost structure that is highly variable in nature while the volume of our flow of freight enables us to negotiate attractive pricing with our transportation providers.

We continue to identify a number of additional companies as suitable acquisition candidates and have completed four material acquisitions since our initial acquisition of Airgroup in January of 2006. In November 2007, we acquired certain assets formerly used in the operations of the automotive division of Stonepath Group, Inc. in Detroit, Michigan to service the automotive industry. In September 2008, we acquired Adcom Express, Inc. d/b/a Adcom Worldwide ("Adcom"), adding an additional 30 locations across North America and augmenting our overall domestic and international freight forwarding capabilities. In April 2011, we acquired DBA Distribution Services, Inc. ("DBA"), which operates under the trade name "Distribution by Air", adding two company owned logistics centers located in Somerset, New Jersey and Los Angeles, California and 23 agency officers across North America. In December 2011 we acquired Isla International Ltd. ("Isla") which added a company-owned logistics center located in Laredo, Texas serving as the Company's gateway to the Mexico markets. Isla provides us with bilingual expertise in both north and south bound cross-border transportation and logistics services to a diversified account base including manufacturers in the automotive, appliance, electronics and consumer packaged goods industries from its strategically-aligned location in Laredo, Texas.

Subsequent to our acquisition of Adcom, we changed the name of Airgroup Corporation to Radiant Global Logistics, Inc. ("RGL") in order to better position our centralized back-office operations to service the Airgroup, Adcom, DBA and Radiant brands.  RGL, through the Airgroup, Adcom, DBA and Radiant brands, has a diversified account base including manufacturers, distributors and retailers using a network of independent carriers and international agents positioned strategically around the world. We have built a global transportation and supply chain management company offering our customers domestic and international freight forwarding services and an expanding array of value-added supply chain management services, including order fulfillment, inventory management, and warehousing.

Our growth strategy will continue to focus on both organic growth and acquisitions. From an organic perspective, we will focus on strengthening existing and expanding new customer relationships. One of the drivers of our organic growth will be retaining existing, and securing new exclusive agency locations. Since our acquisition of Airgroup, we have focused our efforts on the build-out of our network of exclusive agency offices, as well as enhancing our back-office infrastructure and transportation and accounting systems.

As we continue to build out our network of exclusive agent locations to achieve a level of critical mass and scale, we are executing an acquisition strategy to develop additional growth opportunities. Our acquisition strategy relies upon two primary factors: first, our ability to identify and acquire target businesses that fit within our general acquisition criteria; and second, the continued availability of capital and financing resources sufficient to complete these acquisitions.

Successful implementation of our growth strategy depends upon a number of factors, including our ability to: (i) continue developing new agency locations; (ii) locate acquisition opportunities; (iii) secure adequate funding to finance identified acquisition opportunities; (iv) efficiently integrate the businesses of the companies acquired; (v) generate the anticipated economies of scale from the integration; and (vi) maintain the historic sales growth of the acquired businesses in order to generate continued organic growth. There are a variety of risks associated with our ability to achieve our strategic objectives, including the ability to acquire and profitably manage additional businesses and the intense competition in the industry for customers and for acquisition candidates.

We will continue to search for targets that fit within our acquisition criteria. Our ability to secure additional financing will depend upon, among other things, our ability to sell debt or equity securities, continued cooperation with our current lenders and the development of an active trading market for our securities. Although we can make no assurance as to our long term access to debt or equity securities or our ability to develop an active trading market, we were successful in securing $10.0 million in senior subordinated debt in December of 2011 and recently completed our up-listing to the New York Stock Exchange Amex Equities ("AMEX") where we continue to trade under the symbol "RLGT".

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Performance Metrics

Our principal source of income is derived from freight forwarding services. As a freight forwarder, we arrange for the shipment of our customers’ freight from point of origin to point of destination. Generally, we quote our customers a turnkey cost for the movement of their freight. Our price quote will often depend upon the customer’s time-definite needs (first day through fifth day delivery), special handling needs (heavy equipment, delicate items, environmentally sensitive goods, electronic components, etc.), and the means of transport (truck, air, ocean or rail). In turn, we assume the responsibility for arranging and paying for the underlying means of transportation.

Our transportation revenue represents the total dollar value of services we sell to our customers. Our cost of transportation includes direct costs of transportation, including motor carrier, air, ocean and rail services. We act principally as the service provider to add value in the execution and procurement of these services to our customers. Our net transportation revenue (gross transportation revenue less the direct cost of transportation) is the primary indicator of our ability to source, add value and resell services provided by third parties, and is considered by management to be a key performance measure. In addition, management believes measuring its operating costs as a function of net transportation revenue provides a useful metric, as our ability to control costs as a function of net transportation revenue directly impacts operating earnings.

Our operating results will be affected as acquisitions occur. Since all acquisitions are made using the purchase method of accounting for business combinations, our financial statements will only include the results of operations and cash flows of acquired companies for periods subsequent to the date of acquisition.

Our GAAP-based net income will be affected by non-cash charges relating to the amortization of customer related intangible assets and other intangible assets arising from completed acquisitions. Under applicable accounting standards, purchasers are required to allocate the total consideration in a business combination to the identified assets acquired and liabilities assumed based on their fair values at the time of acquisition. The excess of the consideration paid over the fair value of the identifiable net assets acquired is to be allocated to goodwill, which is tested at least annually for impairment. Applicable accounting standards require that we separately account for and value certain identifiable intangible assets based on the unique facts and circumstances of each acquisition. As a result of our acquisition strategy, our net income will include material non-cash charges relating to the amortization of customer related intangible assets and other intangible assets acquired in our acquisitions. Although these charges may increase as we complete more acquisitions, we believe we will actually be growing the value of our intangible assets (e.g., customer relationships). Thus, we believe that earnings before interest, taxes, depreciation and amortization, or EBITDA, is a useful financial measure for investors because it eliminates the effect of these non-cash costs and provides an important metric for our business.

Further, the financial covenants of our credit facility adjust EBITDA to exclude costs related to share based compensation expense, extraordinary items and other non-cash charges.

Our compliance with the financial covenants of our borrowing arrangements is particularly important given the materiality of these facilities to our day-to-day operations and overall acquisition strategy. Our debt capacity, subject to the requisite collateral at an advance rate of 80% of eligible domestic accounts receivable and up to 60% of eligible foreign receivables, is limited to a multiple of our consolidated EBITDA (as adjusted) as measured on a rolling four quarter basis. If we fail to comply with these covenants and are unable to secure a waiver or other relief, our financial condition would be materiality weakened and our ability to fund day-to-day operations would be materially and adversely affected. Accordingly, we intend to employ EBITDA and adjusted EBITDA as management tools to measure our historical financial performance and as a benchmark for future financial flexibility.

Our operating results are also subject to seasonal trends when measured on a quarterly basis. The impact of seasonality on our business will depend on numerous factors, including the markets in which we operate, holiday seasons, consumer demand and economic conditions. Since our revenue is largely derived from customers whose shipments are dependent upon consumer demand and just-in-time production schedules, the timing of our revenue is often beyond our control. Factors such as shifting demand for retail goods and/or manufacturing production delays could unexpectedly affect the timing of our revenue. As we increase the scale of our operations, seasonal trends in one area of our business may be offset to an extent by opposite trends in another area. We cannot accurately predict the timing of these factors, nor can we accurately estimate the impact of any particular factor, and thus we can give no assurance any historical seasonal patterns will continue in future periods.

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Results of Operations 

Basis of Presentation

The results of operations discussion that appears below has been presented utilizing a combination of historical and, where relevant, pro forma information to include the effects on our consolidated financial statements of our acquisition of DBA and Isla. The pro forma results are developed to reflect a consolidation of the historical results of operations of the Company and adjusted to include the historical results of DBA and Isla as if we had acquired both as of July 1, 2010.

The pro forma financial data is not necessarily indicative of results of operations which would have occurred had these acquisitions been consummated at the beginning of the periods presented or which might be attained in the future.

Three months ended December 31, 2011 (actual and unaudited) and December 31, 2010 (actual and unaudited)

We generated transportation revenue of $72.6 million and $44.5 million and net transportation revenue of $20.2 million and $14.2 million for the three months ended December 31, 2011 and 2010, respectively. Net income was $0.4 million and $0.7 million for the three months ended December 31, 2011 and 2010, respectively.

We had adjusted EBITDA of $1.9 million and $1.7 million for three months ended December 31, 2011 and 2010, respectively. EBITDA is a non-GAAP measure of income and does not include the effects of interest and taxes and excludes the "non-cash" effects of depreciation and amortization on current assets. Companies have some discretion as to which elements of depreciation and amortization are excluded in the EBITDA calculation. We exclude all depreciation charges related to property, plant and equipment, and all amortization charges, including amortization of leasehold improvements and other intangible assets. We then further adjust EBITDA to exclude extraordinary items and costs related to share based compensation expense, goodwill impairment charges and other non-cash charges consistent with the financial covenants of our credit facility. As explained above, we believe that EBITDA is useful to us and to our investors in evaluating and measuring our financial performance. While management considers EBITDA and adjusted EBITDA useful in analyzing our results, it is not intended to replace any presentation included in our consolidated financial statements. Set forth below is a reconciliation of EBITDA and adjusted EBITDA to net income, the most directly comparable GAAP measure for the three months ended December 31, 2011 and 2010.

The following table provides a reconciliation of adjusted EBITDA to net income, the most directly comparable GAAP measure in accordance with SEC Regulation G (in thousands), for the three months ended December 31, 2011 and 2010:

	Three months ended December 31,				Change
	2011		2010		Amount			Percent
Net income	$	417	$	716	$	(299	)		(41.8	%)
Income tax expense		488		414		74			17.9	%
Net interest expense		206		36		170			472.2	%
Depreciation and amortization		600		327		273			83.5	%
EBITDA	$	1,711	$	1,493	$	218			14.6	%
Share based compensation and other non-cash costs		42		29		13			44.8	%
Expenses specifically attributable to acquisition of Isla and pending transactions		188		—		188			NM
Loss on litigation settlement		—		150		(150	)		(100.0	%)
Adjusted EBITDA	$	1,941	$	1,672	$	269			16.1	%

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The following table summarizes transportation revenue, cost of transportation and net transportation revenue (in thousands) for the three months ended December 31, 2011 and 2010 (actual and unaudited): 

	Three months ended December 31,						Change
	2011			2010			Amount		Percent
Transportation revenue	$	72,613		$	44,497		$	28,116		63.2	%
Cost of transportation		52,365			30,315			22,050		72.7	%
Net transportation revenue	$	20,248		$	14,182		$	6,066		42.8	%
Net transportation margins		27.9	%		31.9	%

Transportation revenue was $72.6 million for the three months ended December 31, 2011, an increase of 63.2% over transportation revenue of $44.5 million for the three months ended December 31, 2010. Domestic transportation revenue increased by 68.6% to $43.0 million for the three months ended December 31, 2011, from $25.5 million for the three months ended December 31, 2010. International transportation revenue increased by 55.8% to $29.6 million for the three months ended December 31, 2011, from $19.0 million for the comparable prior year period. These increases in revenue were due principally to incremental revenues attributed to our acquisition of DBA.

Cost of transportation increased 72.7% to $52.4 million for the three months ended December 31, 2011, compared to $30.3 million for the three months ended December 31, 2010. The increase is due to increased volume as reflected in our increased transportation revenues.

Net transportation margins decreased to 27.9% of transportation revenue for the three months ended December 31, 2011, as compared to 31.9% of transportation revenue for the three months ended December 31, 2010. The margin reduction is attributable to differing product mixes of shipments throughout the quarter with slightly lower margin characteristics and an increase in charter shipments which also yield lower margins.

The following table compares certain condensed consolidated statement of operations data as a percentage of our net transportation revenue (in thousands) for the three months ended December 31, 2011 and 2010 (actual and unaudited): 

	Three months ended December 31,
	2011					2010					Change
		Amount		Percent			Amount		Percent			Amount		Percent
Net transportation revenue	$	20,248		100.0	%	$	14,182		100.0	%	$	6,066		42.8	%
Agent commissions		12,752		63.0	%		9,850		69.5	%		2,902		29.5	%
Personnel costs		3,078		15.2	%		1,561		11.0	%		1,517		97.2	%
Selling, general and administrative		2,432		12.0	%		1,140		8.0	%		1,292		113.3	%
Transition costs		280		1.4	%		—		0.0	%		280		NM
Depreciation and amortization		600		2.9	%		327		2.3	%		273		83.5	%
Total operating expenses		19,142		94.5	%		12,878		90.8	%		6,264		48.6	%
Income from operations		1,106		5.5	%		1,304		9.2	%		(198	)	(15.2	%)
Loss on litigation settlement		—		0.0	%		(150	)	(1.1	%)		150		(100.0	%)
Other income (expense)		(159	)	(0.8	%)		27		0.2	%		(186	)	(688.9	%)
Income before income taxes and non-controlling interest		947		4.7	%		1,181		8.0	%		(234	)	(19.8	%)
Income tax expense		(488	)	(2.4	%)		(414	)	(2.9	%)		(74	)	17.9	%
Income before non-controlling interest		459		2.3	%		767		5.4	%		(308	)	(40.2	%)
Non-controlling interest		(42	)	(0.2	%)		(51	)	(0.4	%)		9		(17.6	%)
Net income	$	417		2.1	%	$	716		5.0	%	$	(299	)	(41.8	%)

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Agent commissions were $12.8 million for the three months ended December 31, 2011, an increase of 29.5% from $9.9 million for the three months ended December 31, 2010. The increase is primarily attributable to the addition of DBA agent-based stations in April 2011. Agent commissions as a percentage of net transportation revenue decreased to 63.0% for the three months ended December 31, 2011, from 69.5% for the comparable prior year period as a result of our acquisitions of DBA and Isla which added company-owned operations in Newark, Los Angeles and Laredo.

Personnel costs were $3.1 million for the three months ended December 31, 2011, an increase of 97.2% from $1.6 million for the three months ended December 31, 2010. Personnel costs as a percentage of net transportation revenue increased to 15.2% for the three months ended December 31, 2011, from 11.0% for the comparable prior year period. The increase is primarily attributable to our acquisitions of DBA and Isla which added the personnel costs associated with the new company-owned operations in Newark, Los Angeles and Laredo.

Selling, general and administrative costs were $2.4 million for the three months ended December 31, 2011, an increase of 113.3% from $1.1 million for the three months ended December 31, 2010. As a percentage of net transportation revenue, selling, general and administrative costs increased to 12.0% for the three months ended December 31, 2011, from 8.0% for the comparable prior year period. The increase is primarily due to our acquisitions of DBA and Isla which added costs associated with the new company-owned operations in Newark, Los Angeles and Laredo, combined with non-recurring legal expenses incurred in connection with Isla and other transactions in process.

Transition costs associated with the DBA acquisition were $0.3 million for the three months ended December 31, 2011. Transition costs consist of personnel costs related to employees whose positions will be eliminated with the integration of DBA into Radiant. There were no such costs during the comparable prior period. As a percentage of net transportation revenue, non-recurring transition costs were 1.4% for the three months ended December 31, 2011.

Depreciation and amortization costs for the three months ended December 31, 2011, were $0.6 million, an increase of 83.5% from $0.3 million for the three months ended December 31, 2010. Depreciation and amortization as a percentage of net transportation revenue increased to 2.9% for the three months ended December 31, 2011, from 2.3% for the comparable prior year period. The increase is primarily due to additional amortization costs associated with the DBA acquisition completed in the fourth quarter of the prior year.

Income from operations was $1.1 million for the three months ended December 31, 2011, a 15.2% decrease of $0.2 million as compared to $1.3 million for the three months ended December 31, 2010.

Other expense was $0.2 million for the three months ended December 31, 2011, compared to $0.1 million (including the loss on litigation settlement) for the three months ended December 31, 2010.

Net income was $0.4 million for the three months ended December 31, 2011, a 41.8% decrease of $0.3 million as compared to $0.7 million for the three months ended December 31, 2010.

Six months ended December 31, 2011 (actual and unaudited) and December 31, 2010 (actual and unaudited)

We generated transportation revenue of $144.4 million and $90.9 million and net transportation revenue of $41.5 million and $28.3 million for the six months ended December 31, 2011 and 2010, respectively. Net income was $1.1 million for the six months ended December 31, 2011, compared to net income of $1.5 million for the six months ended December 31, 2010.

We had adjusted EBITDA of $3.6 million for the six months ended December 31, 2011 and 2010. EBITDA is a non-GAAP measure of income and does not include the effects of interest and taxes and excludes the "non-cash" effects of depreciation and amortization on current assets. Companies have some discretion as to which elements of depreciation and amortization are excluded in the EBITDA calculation. We exclude all depreciation charges related to property, plant and equipment, and all amortization charges, including amortization of leasehold improvements and other intangible assets. We then further adjust EBITDA to exclude extraordinary items and costs related to share based compensation expense, goodwill impairment charges and other non-cash charges consistent with the financial covenants of our credit facility. As explained above, we believe that EBITDA is useful to us and to our investors in evaluating and measuring our financial performance. While management considers EBITDA and adjusted EBITDA useful in analyzing our results, it is not intended to replace any presentation included in our consolidated financial statements. Set forth below is a reconciliation of EBITDA and adjusted EBITDA to net income, the most directly comparable GAAP measure for the six months ended December 31, 2011 and 2010.

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The following table provides a reconciliation of adjusted EBITDA to net income, the most directly comparable GAAP measure in accordance with SEC Regulation G (in thousands), for the six months ended December 31, 2011 and 2010: 

	Six months ended December 31,				Change
	2011		2010		Amount			Percent
Net income	$	1,073	$	1,499	$	(426	)		(28.4	%)
Income tax expense		889		920		(31	)		(3.4	%)
Net interest expense		294		72		222			308.3	%
Depreciation and amortization		990		652		338			51.8	%
EBITDA	$	3,246	$	3,143	$	103			3.3	%
Share based compensation and other non-cash costs		66		88		(22	)		(25.0	%)
Expenses specifically attributable to acquisitions of DBA, Isla and other pending transactions		269		—		269			NM
Loss on litigation settlement		—		150		(150	)		(100.0	%)
Adjusted EBITDA	$	3,581	$	3,381	$	200			5.9	%

The following table summarizes transportation revenue, cost of transportation and net transportation revenue (in thousands) for the six months ended December 31, 2011 and 2010 (actual and unaudited):

	Six months ended December 31,						Change
	2011			2010			Amount		Percent
Transportation revenue	$	144,447		$	90,858		$	53,589		59.0	%
Cost of transportation		102,959			62,557			40,402		64.6	%
Net transportation revenue	$	41,488		$	28,301		$	13,187		46.6	%
Net transportation margins		28.7	%		31.1	%

Transportation revenue was $144.4 million for the six months ended December 31, 2011, an increase of 59.0% over transportation revenue of $90.9 million for the six months ended December 31, 2010. Domestic transportation revenue increased by 71.3% to $85.3 million for the six months ended December 31, 2011, from $49.8 million for the six months ended December 31, 2010. International transportation revenue increased by 43.8% to $59.1 million for the six months ended December 31, 2011, from $41.1 million for the comparable prior year period. These increases in revenue are due principally to incremental revenues attributed to our acquisition of DBA.

Cost of transportation increased 64.6% to $103.0 million for the six months ended December 31, 2011, compared to $62.6 million for the six months ended December 31, 2010, as a result of increased volume as reflected in our increased transportation revenues.

Net transportation margins decreased to 28.7% of transportation revenue for the six months ended December 31, 2011, as compared to 31.1% of transportation revenue for the six months ended December 31, 2010. The margin reduction is attributable to differing product mixes of shipments throughout the period with slightly lower margin characteristics and an increase in charter shipments which also yield lower margins.

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The following table compares certain condensed consolidated statement of operations data as a percentage of our net transportation revenue (in thousands) for the six months ended December 31, 2011 and 2010 (actual and unaudited): 

	Six months ended December 31,
	2011					2010					Change
		Amount		Percent			Amount		Percent			Amount		Percent
Net transportation revenue	$	41,488		100.0	%	$	28,301		100.0	%	$	13,187		46.6	%
Agent commissions		26,645		64.2	%		19,683		69.5	%		6,962		35.4	%
Personnel costs		5,972		14.4	%		3,118		11.0	%		2,854		91.5	%
Selling, general and administrative		5,093		12.3	%		2,203		7.8	%		2,890		131.2	%
Transition costs		563		1.4	%		—		0.0	%		563		NM
Depreciation and amortization		990		2.4	%		652		2.3	%		338		51.8	%
Total operating expenses		39,263		94.7	%		25,656		90.6	%		13,607		53.0	%
Income from operations		2,225		5.3	%		2,645		9.4	%		(420	)	(15.9	%)
Loss on litigation settlement		—		0.0	%		(150	)	(0.5	%)		150		(100.0	%)
Other income (expense)		(174	)	(0.4	%)		17		0.0	%		(191	)	1,123.5	%
Income before income taxes and non-controlling interest		2,051		4.9	%		2,512		8.9	%		(461	)	(18.4	%)
Income tax expense		(889	)	(2.1	%)		(920	)	(3.3	%)		31		(3.4	%)
Income before non-controlling interest		1,162		2.8	%		1,592		5.6	%		(430	)	(27.0	%)
Non-controlling interest		(89	)	(0.2	%)		(93	)	(0.3	%)		4		(3.2	%)
Net income	$	1,073		2.6	%	$	1,499		5.3	%	$	(426	)	(28.4	%)

Agent commissions were $26.6 million for the six months ended December 31, 2011, an increase of 35.4% from $19.7 million for the six months ended December 31, 2010. The increase is primarily attributable to the addition of DBA agent-based stations in April 2011. Agent commissions as a percentage of net transportation revenue decreased to 64.2% for the six months ended December 31, 2011, from 69.5% for the comparable prior year period. This decrease is a result of our acquisitions of DBA and Isla which added company-owned operations in Newark, Los Angeles and Laredo.

Personnel costs were $6.0 million for the six months ended December 31, 2011, an increase of 91.5% from $3.1 million for the six months ended December 31, 2010. Personnel costs as a percentage of net transportation revenue increased to 14.4% for the six months ended December 31, 2011, from 11.0% for the comparable prior year period. The increase is primarily attributable to our acquisitions of DBA and Isla which added the personnel costs associated with the new company-owned operations in Newark, Los Angeles and Laredo.

Selling, general and administrative costs were $5.1 million for the six months ended December 31, 2011, an increase of 131.2% from $3.1 million for the six months ended December 31, 2010. Selling, general and administrative costs as a percentage of net transportation revenue increased to 12.3% for the six months ended December 31, 2011, from 7.8% for the nine months ended December 31, 2010. The increase was primarily due to our acquisitions of DBA and Isla which added costs associated with the new company-owned operations in Newark, Los Angeles and Laredo, combined with non-recurring legal expenses incurred in connection with Isla and other transactions in process.

Transition costs associated with the DBA acquisition were $0.6 million for the six months ended December 31, 2011. Transition costs consist of personnel costs related to employees whose positions will be eliminated with the integration of DBA into Radiant. There were no such costs during the comparable prior period. As a percentage of net transportation revenue, non-recurring transition costs were 1.4% for the six months ended December 31, 2011.

Depreciation and amortization costs for the six months ended December 31, 2011, were $1.0 million, an increase of 51.8% from $0.7 million for the six months ended December 31, 2010. Depreciation and amortization as a percentage of net transportation revenue increased to 2.4% for the six months ended December 31, 2011, from 2.3% for the comparable prior year period. The increase is primarily due to additional amortization costs associated with the DBA acquisition completed in the fourth quarter of the prior year.

Income from operations was $2.2 million for the six months ended December 31, 2011, a 15.9% decrease of $0.4 million as compared to income from operations of $2.6 million for the six months ended December 31, 2010.

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Other expense was $0.2 million for the six months ended December 31, 2011, compared to $0.1 million (including the loss on litigation settlement) for the six months ended December 31, 2010.

Net income was $1.1 million for the six months ended December 31, 2011, a 28.4% decrease of $0.4 million as compared to net income of $1.5 million for the six months ended December 31, 2010.

Supplemental Pro forma Information

The following table provides a reconciliation of December 31, 2011 (pro forma and unaudited) and December 31, 2010 (pro forma and unaudited) adjusted EBITDA to net income, the most directly comparable GAAP measure in accordance with SEC Regulation G (in thousands):

	Six months ended December 31,				Change
	2011		2010		Amount			Percent
Net income	$	2,210	$	3,037	$	(827	)		(27.2	%)
Income tax expense		1,588		1,628		(40	)		(2.5	%)
Net interest expense		294		73		221			302.7	%
Depreciation and amortization		1,008		770		238			30.9	%
EBITDA	$	5,100	$	5,508	$	(377	)		(10.4	%)
Share based compensation and other non-cash costs		66		88		(22	)		(25.0	%)
Expenses specifically attributable to acquisition of DBA and Isla		269		—		269			NM
Loss on litigation settlement		—		150		(150	)		(100.0	%)
Adjusted EBITDA	$	5,435	$	5,746	$	(311	)		(5.4	%)

The following table summarizes December 31, 2011 (pro forma and unaudited) and December 31, 2010 (pro forma and unaudited) transportation revenue, cost of transportation and net transportation revenue (in thousands):

	Six months ended December 31,						Change
	2011			2010			Amount			Percent
Transportation revenue	$	157,383		$	153,410		$	3,973			2.6	%
Cost of transportation		112,391			105,483			6,908			6.5	%
Net transportation revenue	$	44,992		$	47,927		$	(2,935	)		(6.1	%)
Net transportation margins		28.6	%		31.2	%

Pro forma transportation revenue was $157.4 million for the six months ended December 31, 2011, an increase of 2.6% over pro forma transportation revenue of $153.4 million for the six months ended December 31, 2010.

Pro forma cost of transportation was $112.4 million for the six months ended December 31, 2011, an increase of 6.5% over pro forma cost of transportation of $105.5 million for the six months ended December 31, 2010.

Pro forma net transportation margins decreased to 28.6% for the six months ended December 31, 2011, compared to pro forma net transportation margins of 31.2% for the six months ended December 31, 2010.

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The following table compares certain condensed consolidated statements of income data as a percentage of our net transportation revenue (in thousands) for the six months ended December 31, 2011 (pro forma and unaudited) and December 31, 2010 (pro forma and unaudited): 

	Six months ended December 31,
	2011					2010					Change
		Amount		Percent			Amount		Percent			Amount		Percent
Net transportation revenue	$	44,992		100.0	%	$	47,927		100.0	%	$	(2,935	)	(6.1	%)
Agent commissions		26,645		59.2	%		29,915		62.4	%		(3,270	)	(10.9	%)
Personnel costs		6,692		14.9	%		7,430		15.5	%		(738	)	(9.9	%)
Selling, general and administrative		6,023		13.4	%		4,883		10.2	%		1,140		23.3	%
Transition costs		563		1.3	%		-		0.0	%		563		NM
Depreciation and amortization		1,008		2.2	%		770		1.6	%		238		30.9	%
Total operating expenses		40,931		91.0	%		42,998		89.7	%		(2,067	)	(4.8	%)
Income from operations		4,061		9.0	%		4,929		10.3	%		(868	)	(17.6	%)
Loss on litigation settlement		-		0.0	%		(150	)	(0.3	%)		150		(100.0	%)
Other income (expense)		(174	)	(0.4	%)		(21	)	(0.1	%)		(153	)	728.6	%
Income before income taxes and non-controlling interest		3,887		8.6	%		4,758		9.9	%		(871	)	(18.3	%)
Income tax expense		(1,588	)	(3.5	%)		(1,628	)	(3.4	%)		40		(2.5	%)
Income before non-controlling interest		2,299		5.1	%		3,130		6.5	%		(831	)	(26.5	%)
Non-controlling interest		(89	)	(0.2	%)		(93	)	(0.2	%)		4		(4.3	%)
Net income	$	2,210		4.9	%	$	3,037		6.3	%	$	(827	)	(27.2	%)

Pro forma agent commissions were $26.6 million for the six months ended December 31, 2011, a decrease of 10.9% from $29.9 million for the pro forma six months ended December 31, 2010. Pro forma agent commissions as a percentage of net transportation revenue decreased to 59.2% of net transportation revenue the for six months ended December 31, 2011, compared to 62.4% for pro forma six months ended December 31, 2010.

Pro forma personnel costs were $6.7 million for the six months ended December 31, 2011, a decrease of 9.9% from $7.4 million for the pro forma six months ended December 31, 2010. Pro forma personnel costs as a percentage of net transportation revenue decreased to 14.9% of net transportation revenue for six months ended December 31, 2011, compared to 15.5% for pro forma six months ended December 31, 2010.

Pro forma selling, general and administrative costs were $6.0 million for the six months ended December 31, 2011, an increase of 23.3% from $4.9 million for the pro forma six months ended December 31, 2010. As a percentage of net transportation revenue, pro forma selling, general and administrative costs increased to 13.4% for six months ended December 31, 2011, from 10.2% pro forma six months ended December 31, 2010.

Transition costs associated with the DBA acquisition were $0.6 million for the six months ended December 31, 2011. There were no such costs during the comparable prior period. As a percentage of net transportation revenue, non-recurring transition costs were 1.3% for the six months ended December 31, 2011.

Pro forma depreciation and amortization costs were $1.0 million for the six months ended December 31, 2011, an increase of 30.9% from $0.8 million for the pro forma six months ended December 31, 2010. As a percentage of net transportation revenue, pro forma depreciation and amortization costs increased to 2.2% for six months ended December 31, 2011, from 1.6% pro forma six months ended December 31, 2010.

Pro forma income from operations was $4.1 million for the six months ended December 31, 2011, compared to $4.9 million for the pro forma six months ended December 31, 2010.

Pro forma other expense was $0.2 million for the six months ended December 31, 2011, compared to other expense of $0.2 million (including the loss on litigation settlement) for the pro forma six months ended December 31, 2010.

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Pro forma net income was $2.2 million for the six months ended December 31, 2011, compared to net income of $3.0 million for the pro forma six months ended December 31, 2010. 

Liquidity and Capital Resources

Net cash provided by operating activities was $4.0 million for the six months ended December 31, 2011, compared to $1.8 million for the six months ended December 31, 2010. The change was principally driven by growth in transportation revenues as well as decreases in prepaid services, increases in accounts payable and accrued transportation costs partially offset by increases in outstanding receivables and income tax deposit.

Net cash used in investing activities was $8.5 million for the six months ended December 31, 2011, compared to $0.5 million for the six months ended December 31, 2010. Use of cash for the six months ended December 31, 2011, consisted of $7.7 million related to the acquisition of Isla, the purchase of $0.3 million of fixed assets and payments made to former shareholders of acquired operations totaling $0.5 million. Use of cash for the six months ended December 31, 2010, consisted of the purchase of $0.2 million in fixed assets and payments made to the former shareholders of acquired operations totaling $0.3 million.

Net cash provided by financing activities was $6.2 million for the six months ended December 31, 2011, compared to net cash used of $1.9 million for the six months ended December 31, 2010. The cash provided by financing activities for the six months ended December 31, 2011, consisted primarily of net proceeds from the issuance of debt to Caltius of $9.4 million, offset by net repayments of our credit facility of $2.9 million, repayments of notes payable to former shareholders of acquired operations of $0.1 million and distributions to the non-controlling interest of a subsidiary of $0.1 million. The cash used in financing activities for the six months ended December 31, 2010, consisted of net repayments of our credit facility of $1.3 million, distributions to the non-controlling interest of a subsidiary of $0.1 million and $0.5 million of treasury stock purchases.

Acquisitions

Below are descriptions of material acquisitions, including a breakdown of consideration paid at closing and future potential earn-out payments. We define "material acquisitions" as those with aggregate potential consideration of $1.0 million or more.

Adcom Express 

Effective September 1, 2008, we acquired all of the outstanding stock of Adcom Express, Inc. The transaction was valued at up to $11.05 million, consisting of: (i) $4.75 million in cash paid at the closing; (ii) $0.25 million in cash payable shortly after the closing, subject to adjustment, based upon the working capital of Adcom as of August 31, 2008; (iii) up to $2.8 million in four "Tier-1 Earn-Out Payments" of up to $0.7 million each, covering the four year earn-out period through 2012, based upon Adcom achieving certain levels of "Gross Profit Contribution" (as defined in the stock purchase agreement), payable 50% in cash and 50% in shares of our common stock (valued at delivery date); (iv) a "Tier-2 Earn-Out Payment" of up to a maximum of $2.0 million, equal to 20% of the amount by which the Adcom cumulative Gross Profit Contribution exceeds $16.56 million during the four year earn-out period; and (v) an "Integration Payment" of $1.25 million, payable (a) on the earlier of the date certain integration targets are achieved or 18 months after the closing, and (b) payable 50% in cash and 50% in our shares of our common stock (valued at delivery date).

As of December 31, 2011, we owe Mr. Friedman $33,708 in cash.

Assuming minimum targeted earnings levels are achieved, the following table summarizes our contingent base earn-out payments related to the acquisition of Adcom, for the fiscal years indicated based on achieving Gross Profit Contributions (in thousands):

Estimated payment anticipated for fiscal year(1):	2013
Earn-out period:	7/1/2011 – 6/30/2012
Earn-out payments:
Cash	$	350
Equity		350
Total potential earn-out payments	$	700
Total gross margin targets	$	4,320

(1) Earn-out payments are paid October 1 following each fiscal year end in a combination of cash and common stock. 

No Tier II payments have been paid and management does not believe Tier II payments will be earned for the year ending June 30, 2012.

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Distribution By Air

On April 6, 2011, we closed on an Agreement and Plan of Merger pursuant to which we acquired all of the outstanding capital stock of DBA in a transaction valued at $12.0 million.   The shares of DBA were acquired via a merger transaction pursuant to which DBA was merged into a newly-formed subsidiary of the Company.  

The $12.0 million transaction consisted of $5.4 million paid at closing, the delivery of $4.8 million in seller notes (payable in principle installments of $1.6 million on the anniversary date over the next three years plus interest at a rate of 6.5% per annum), and $1.8 million payable upon the achievement of certain integration milestones within 18 months after closing.  A conversion feature was included in the notes, and in May 2011, the Company elected to satisfy $2.4 million of the seller notes through the issuance of shares of the Company’s common stock.  The remaining seller notes may be subject to acceleration upon occurrence of a "Corporate Transaction" (as defined in the Agreement), which includes a future sale of DBA or the Company or certain changes in corporate control. The cash component of the transaction was financed through a combination of our existing funds and funds available under our revolving credit facility.

In connection with the acquisition of DBA, we entered into a sixth modification to amend our secured credit facility (the "Facility") with Bank of America N.A. ("BofA"), extending the maturity to March 31, 2013. The Facility is in the principal amount of $20 million (including availability for letters of credit), and provides for advances of up to 80% of the Company's eligible accounts receivable. Advances under the facility are available to fund future acquisitions, capital expenditures or for other corporate purposes.

Isla International

On December 1, 2011, through our wholly-owned subsidiary, RGL, the Company closed on an Asset Purchase Agreement dated November 15, 2011 (the "APA") to acquire the business of Laredo, Texas based Isla International, Ltd. ("Isla"). Pursuant to the transaction, , a privately-held company providing a full range of cross-border transportation and logistics services between the United States and Mexico. Pursuant to the APA, we acquired the historic operations, employee base, operating methods and systems, customer relationships and goodwill of Isla. We did not, however, acquire any accounts receivable and we did not assume accounts payable and other certain obligations.

The transaction is valued at up to approximately $15.0 million, consisting of: (i) cash of $7,656,582 paid at closing, (ii) $1.325 million payable in shares of our restricted stock on the three-month anniversary of the closing (to be valued based upon a 30-day volume weighted average price to be calculated preceding the delivery of the shares); (iii) up to $3.975 million in aggregate "Tier-1 Earn-Out Payments" covering the four-year earn-out period immediately following closing, based upon the acquired Isla business unit generating a "Modified Gross Profit Contribution" (as defined within the Asset Purchase Agreement) of $6,927,644 for each twelve month earn-out period following closing; and (iv) a "Tier-2 Earn-Out Payment" after the fourth anniversary of the closing, equal to 20% of the amount by which the aggregate "Modified Gross Profit Contribution" of the acquired Isla business unit during the four-year earn-out period exceeds $27,710,576, with such payment not to exceed $2.0 million.  The various Tier-1 Earn-Out Payments and the Tier-2 Earn-Out Payment shall be made in a combination of cash and our common stock, as we may, at our sole option (and provided we remain current in our periodic reports filed under the Securities Exchange Act of 1934, and maintain the listing of our common shares on an exchange or automated quotation system), elect to satisfy up to 25% of each of the earn-out payments through the issuance of our common stock valued based upon a 30-day volume weighted average price to be calculated preceding the delivery of the shares.  During the earn-out period, RGL has agreed to a number of operational covenants regarding the post-closing operation of the acquired Isla business unit, including, among others, affirmative covenants: (i) to account for and operate the acquired Isla International business as a separate profit center; and (ii) to permit the former owner and President of Isla to operate the acquired Isla business unit in the manner historically operated; and negative covenants which prohibit: (i) the sale of the assets of the Isla business unit; and (ii) terminating, without cause, the employment of certain key operating personnel of the Isla business unit.

The transaction was financed through the net proceeds made available through the issuance of $10.0 million in subordinated debt. As well, in connection with the transaction, we entered into an amended and restated revolving credit facility (the "Senior Facility") with our senior lender, BofA, extending the maturity to November 30, 2013.

Credit Facility

In December 2011, in connection with the acquisition of Isla, the Senior Facility, including a $1.0 million sublimit to support letters of credit, was extended to a maturity date of November 30, 2013. The Senior Facility is collateralized by accounts receivable and other assets of us and our subsidiaries. Advances under the Senior Facility are available to fund future acquisitions, capital expenditures or for other corporate purposes, including the repurchase of our stock. Borrowings under the facility bear interest, at our option, at the bank’s prime rate minus 0.75% to plus 0.50% or LIBOR plus 1.75% to 3.00%, and can be adjusted up or down during the term of the Senior Facility based on the our performance relative to certain financial covenants. The Senior Facility is collateralized by accounts receivable and other assets of us and our subsidiaries, and provides for advances of up to 80% of eligible domestic accounts receivable and for advances of up to 60% of eligible foreign accounts receivable.

The terms of the Senior Facility are subject to certain financial and operational covenants which may limit the amount otherwise available under the Senior Facility. The first financial covenant limits our ratio of "Funded Debt" (as defined therein) to consolidated EBITDA (as adjusted) and measured on a rolling four quarter basis to 4.00 to 1, reducing to 3.75 to 1 at December 31, 2012, reducing to 3.5 to 1 at December 31, 2013, and reducing to 3.25 to 1 at December 31, 2014. The second financial covenant limits our ratio of Senior Debt (defined as amounts borrowed from the Bank) to consolidated EBITDA (as adjusted) and measured on a rolling four quarter basis to 2.50 to 1 and reducing to 2.25 to 1 on December 31, 2012. The third financial covenant requires us to maintain a basic fixed charge coverage ratio of at least 1.25 to 1.0. The fourth financial covenant is a minimum profitability standard which requires us not to incur a net loss before taxes, amortization of acquired intangibles and extraordinary items in any two consecutive quarterly accounting periods.

Under the terms of the Senior Facility, we are permitted to make additional acquisitions without the consent of BofA only if certain conditions are satisfied. The conditions imposed by the Senior Facility include the following: (i) the absence of an event of default under the Senior Facility; (ii) the company to be acquired must be in the transportation and logistics industry; (iii) the purchase price to be paid must be consistent with the our historical business and acquisition model; (iv) after giving effect for the funding of the acquisition, we must have undrawn availability of at least $4.0 million under the Senior Facility; (v) BofA must be reasonably satisfied with projected financial statements we provide covering a twelve month period following the acquisition; (vi) the acquisition documents must be provided to the Lender and must be consistent with the description of the transaction provided to BofA; and (vii) the number of permitted acquisitions is limited to three per fiscal year and the aggregate cash consideration payable at closing shall not exceed $7.5 million for any single transaction and $12.5 million in the aggregate, provided however, that the foregoing limitation shall exclude cash consideration derived from the proceeds of sales of our newly issued equity interests during the nine month period prior to the closing of any such transaction and the aggregate consideration at closing is not more than $25.0 million. In the event we are unable to satisfy the conditions of the Senior Facility in connection with a proposed acquisition, we must either forego the acquisition, obtain the BofA's consent, or retire the Senior Facility.

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The co-borrowers of the Senior Facility include us, RGL, Adcom, DBA, Radiant Transportation Services ("RTS"), Radiant Container Services and RLP. RLP has been certified as a minority business enterprise, and focuses on corporate and government accounts with diversity initiatives. As a co-borrower under the Senior Facility, the accounts receivable of RLP are eligible for inclusion within our overall borrowing base and all borrowers will be responsible for repayment of the debt associated with advances under the Senior Facility, including those advanced to RLP. At December 31, 2011, we were in compliance with all of our covenants.

Mezzanine Financing

In connection with our acquisition of Isla, effective as of December 1, 2011, we entered into an Investment Agreement with Caltius Partners IV, LP and Caltius Partners Executive IV, LP (collectively, "Caltius"). Under the Investment Agreement, Caltius provided us with $10.0 million evidenced by the issuance of senior subordinated notes (the "Senior Subordinated Notes"), the net proceeds of which were primarily used to finance the cash payments due at closing of the Isla transaction. The Senior Subordinated Notes accrue interest at the rate of 13.5% per annum (the "Accrual Rate"), and must be paid currently in cash on a quarterly basis at a rate of 11.75% per annum (the "Pay Rate"). The outstanding principal balance of the Senior Subordinated Notes will be increased by an amount (the "PIK Amount") equal to the difference between interest accrued at the Accrual Rate and Interest Accrued at the Pay Rate unless the Company makes an election to pay the PIK Amount in cash. The Senior Subordinated Notes are non-amortizing, with all principal due upon maturity at December 1, 2016.

The Senior Subordinated Notes are unsecured, and pursuant to the terms of the Subordination Agreement dated December 1, 2011 among BofA, Caltius, us and the co-borrowers under the Investment Agreement (the "Subordination Agreement"), are subordinated to the Senior Facility. The Subordination Agreement provides that, in general, we and the co-borrowers may not make, and Caltius may not receive, any payment with respect to the Senior Subordinated Notes or other subordinated debt if, at the time of such payment: (i) a payment default exists under the Senior Facility and such default has not been cured or waived; or (ii) we, our co-borrowers and Caltius shall have received a notice from BofA stating that a financial covenant default exists under the Senior Facility and the sum of the unrestricted cash of us and our co-borrowers and the aggregate availability (without regard to any default) under the Senior Facility is less than $5.0 million. The Subordination Agreement also places restrictions on the ability of us and our co-borrowers to prepay the Senior Subordinated Notes and amend any documents associated with the Senior Subordinated Notes.

The Senior Subordinated Notes may not be prepaid during the first two years, except in conjunction with a sale of all or substantially all of the assets of us and our co-borrowers taken as a whole, or a merger or consolidation of us or any of our co-borrowers and with a prepayment premium of 5% of any principal repaid during the first two years. During the third year of the financing, the Senior Subordinated Notes may be prepaid with a prepayment premium of 2% of any principal repaid during the third year. Thereafter, the Senior Subordinated Notes may be prepaid without penalty.

Upon a Change of Control (as defined in the Investment Agreement), the holders of the Senior Subordinated Notes have the right (but not the obligation) to require us to (i) prepay all or any portion of the Senior Subordinated Notes, all accrued but unpaid interest thereon, and all applicable repayment charges, and (ii) pay in full all of the other obligations then owed to such holders.

Under the Investment Agreement, we also issued 500,000 restricted shares of our common stock to Caltius. We agreed to issue an additional 100,000 restricted shares of our common stock to Caltius (all shares issued to Caltius are sometimes referred to herein collectively as the "Caltius Shares") if within the first twelve months of the financing, our shares are not traded on the New York Stock Exchange Amex Equities ("AMEX"). The Company agreed to provide certain limited registration rights covering the Caltius Shares as more fully described below. Also, under the Investment Agreement, we agreed to provide Caltius with the right to designate one representative to attend and observe meetings of our Board of Directors, and to maintain key man life insurance covering our CEO, Bohn Crain.

The terms of the Investment Agreement are subject to certain customary affirmative and negative covenants. These include, but are not limited to, restrictions on: (i) types and amounts of indebtedness that can be incurred; (ii) dividends that can be paid; (iii) distributions that can be made; (iv) certain asset sales, lease commitments, capital expenditures, acquisitions and investments. In addition, the Investment Agreement prohibits us from incurring any earn-out obligations or seller notes in connection with any future acquisitions, unless explicitly subordinated to the Senior Subordinated Notes, or, in general, any indebtedness that is subordinated to the Senior Facility, unless such indebtedness is also subordinated to the Senior Subordinated Notes.

The Investment Agreement contains financial covenants including, but not limited to, funded leverage ratio covenants, senior funded leverage ratio covenants and fixed charges ratio covenants. The first financial covenant limits our ratio of "Funded Debt" (as defined therein) to consolidated EBITDA (as adjusted) and measured on a rolling four quarter basis to 4.25 to 1, reducing to 4.00 to 1 at March 31, 2013, reducing to 3.75 to 1 at March 31, 2014 and reducing to 3.50 to 1 at March 31, 2015. The second financial covenant limits our ratio of Senior Debt (defined as amounts borrowed from the Bank and the Senior Subordinated Notes) to consolidated EBITDA (as adjusted) and measured on a rolling four quarter basis to 3.75 to 1, reducing to 3.50 to 1 on March 31, 2013, reducing to 3.25 to 1 on March 31, 2014 and reducing to 3.00 to 1 on March 31, 2015. The third financial covenant requires that we maintain a basic fixed charge coverage ratio of at least 1.05 to 1.0.

Under the Investment Agreement, we are permitted to make additional acquisitions only if certain conditions are satisfied, including the following: (i) the acquisition constitutes a business reasonably related to our then current business; (ii) no default or event of default shall exist prior to or will be caused as a result of such acquisition; (iii) Caltius has been provided with prior written notice of such acquisition, such notice to include (a) a description of the property or equity interests to be purchased, (b) the price and terms of such acquisition, (c) a certificate of a financial officer, certifying as to certain information requested in the Investment Agreement, and (d) such other information with respect thereto as is reasonably requested by Caltius; (iv) in the event of an acquisition of equity interests of a company, such company shall become a wholly-owned subsidiary; (v) the target company shall have as of the last day of the most recent fiscal quarter of such company ending on or immediately prior to the date of such acquisition actual (or pro forma to the extent approved in writing by Caltius) EBITDA and net income greater than $1, in each case for the 12 month period ending on such date; (vi) the aggregate cash consideration payable at the closing of the acquisition shall not exceed $7.5 million for any single transaction and $12.5 million in the aggregate in any fiscal year or such other amount approved in writing by the Caltius; provided, however, that (a) the foregoing limitation shall exclude cash consideration derived from the proceeds of sales of equity interests issued by us during the nine-month period prior to the closing of such acquisition to the extent we notify Caltius in writing of the use of such cash consideration from sales of such equity interests in such transaction or transactions and (b) the written consent of Caltius shall be required if the aggregate cash consideration payable at the closing of such transaction is equal to or greater than $25.0 million; (vii) the post-closing availability under the Senior Facility is at least $4.0 million on a pro forma basis; (viii) the number of permitted acquisitions that we and our co-borrowers have completed in such fiscal year does not exceed three; and (ix) we shall have provided to Caltius certain deliverables for such acquisition.

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The Senior Subordinated Notes may not be prepaid during the first two years, except in conjunction with a sale of all or substantially all of the assets of us and our co-borrowers taken as a whole, or a merger or consolidation of us or any of our co-borrowers and with a prepayment premium of 5% of any principal repaid during the first two years. During the third year of the financing, the Senior Subordinated Notes may be prepaid with a prepayment premium of 2% of any principal repaid during the third year. Thereafter, the Senior Subordinated Notes may be prepaid without penalty.

Upon a Change of Control (as defined in the Investment Agreement), the holders of the Senior Subordinated Notes have the right (but not the obligation) to require us to (i) prepay all or any portion of the Senior Subordinated Notes, all accrued but unpaid interest thereon, and all applicable repayment charges, and (ii) pay in full all of the other obligations then owed to such holders.

Under the Investment Agreement, we also issued 500,000 restricted shares of our common stock to Caltius. We agreed to issue an additional 100,000 restricted shares of our common stock to Caltius (all shares issued to Caltius are sometimes referred to herein collectively as the "Caltius Shares") if within the first twelve months of the financing, our shares are not traded on the New York Stock Exchange Amex Equities ("AMEX"). The Company agreed to provide certain limited registration rights covering the Caltius Shares as more fully described below. Also, under the Investment Agreement, we agreed to provide Caltius with the right to designate one representative to attend and observe meetings of our Board of Directors, and to maintain key man life insurance covering our CEO, Bohn Crain.

The terms of the Investment Agreement are subject to certain customary affirmative and negative covenants. These include, but are not limited to, restrictions on: (i) types and amounts of indebtedness that can be incurred; (ii) dividends that can be paid; (iii) distributions that can be made; (iv) certain asset sales, lease commitments, capital expenditures, acquisitions and investments. In addition, the Investment Agreement prohibits us from incurring any earn-out obligations or seller notes in connection with any future acquisitions, unless explicitly subordinated to the Senior Subordinated Notes, or, in general, any indebtedness that is subordinated to the Senior Facility, unless such indebtedness is also subordinated to the Senior Subordinated Notes.

The Investment Agreement contains financial covenants including, but not limited to, funded leverage ratio covenants, senior funded leverage ratio covenants and fixed charges ratio covenants. The first financial covenant limits our ratio of "Funded Debt" (as defined therein) to consolidated EBITDA (as adjusted) and measured on a rolling four quarter basis to 4.25 to 1, reducing to 4.00 to 1 at March 31, 2013, reducing to 3.75 to 1 at March 31, 2014 and reducing to 3.50 to 1 at March 31, 2015. The second financial covenant limits our ratio of Senior Debt (defined as amounts borrowed from the Bank and the Senior Subordinated Notes) to consolidated EBITDA (as adjusted) and measured on a rolling four quarter basis to 3.75 to 1, reducing to 3.50 to 1 on March 31, 2013, reducing to 3.25 to 1 on March 31, 2014 and reducing to 3.00 to 1 on March 31, 2015. The third financial covenant requires that we maintain a basic fixed charge coverage ratio of at least 1.05 to 1.0.

Under the Investment Agreement, we are permitted to make additional acquisitions only if certain conditions are satisfied, including the following: (i) the acquisition constitutes a business reasonably related to our then current business; (ii) no default or event of default shall exist prior to or will be caused as a result of such acquisition; (iii) Caltius has been provided with prior written notice of such acquisition, such notice to include (a) a description of the property or equity interests to be purchased, (b) the price and terms of such acquisition, (c) a certificate of a financial officer, certifying as to certain information requested in the Investment Agreement, and (d) such other information with respect thereto as is reasonably requested by Caltius; (iv) in the event of an acquisition of equity interests of a company, such company shall become a wholly-owned subsidiary; (v) the target company shall have as of the last day of the most recent fiscal quarter of such company ending on or immediately prior to the date of such acquisition actual (or pro forma to the extent approved in writing by Caltius) EBITDA and net income greater than $1, in each case for the 12 month period ending on such date; (vi) the aggregate cash consideration payable at the closing of the acquisition shall not exceed $7.5 million for any single transaction and $12.5 million in the aggregate in any fiscal year or such other amount approved in writing by the Caltius; provided, however, that (a) the foregoing limitation shall exclude cash consideration derived from the proceeds of sales of equity interests issued by us during the nine-month period prior to the closing of such acquisition to the extent we notify Caltius in writing of the use of such cash consideration from sales of such equity interests in such transaction or transactions and (b) the written consent of Caltius shall be required if the aggregate cash consideration payable at the closing of such transaction is equal to or greater than $25.0 million; (vii) the post-closing availability under the Senior Facility is at least $4.0 million on a pro forma basis; (viii) the number of permitted acquisitions that we and our co-borrowers have completed in such fiscal year does not exceed three; and (ix) we shall have provided to Caltius certain deliverables for such acquisition.

The Investment Agreement contains a number of events of default, certain of which are typical for transactions of this type, including, without limitation, the following events: (i) failure to pay amounts due under the Senior Subordinated Notes; (ii) a breach of any representation or warranty contained in the Investment Agreement or related documents; (iii) failure to comply with or perform certain covenants under the Investment Agreement; (iv) any material default under any of our indebtedness or that of the co-borrowers, including unsatisfied judgments, in excess of agreed upon per item and aggregate amounts; (v) the bankruptcy, insolvency or the appointment of a receiver; (vi) the dissolution, liquidation, winding-up or termination of the Company or any of the co-borrowers; (vii) we or any co-borrower suspends or is enjoined, restrained or in any way prevented by the order of any governmental authority from conducting all or any material part of its business for more than 30 calendar days; or (viii) Bohn Crain ceases to serve as our Chief Executive Officer and we do not appoint a successor acceptable to Caltius within 30 days after the date on which Bohn Crain is no longer serving as our Chief Executive Officer.

The co-borrowers under the Investment Agreement include us, RGL, Adcom, DBA, RTS, Radiant Customs Services, Inc. ("RCS") and RLP.

In connection with the Caltius financing and effective as of December 1, 2011, we also entered into an Investor Rights Agreement with Caltius under which we agreed to provide limited registration rights covering the Caltius Shares and agreed to certain contingent redemption rights regarding the Caltius Shares. Under the Investor Rights Agreement, Caltius has the right to cause us to redeem the Caltius Shares at their then appraised fair market value if (subject to certain notice and cure periods): (a) our shares of common stock are no longer listed and registered, quoted or eligible for quotation, on an exchange or automated quotation system; (b) we have been unable to timely file all periodic reports required by the Securities Exchange Act of 1934, as amended (the “Exchange Act”); and (c) we have otherwise been unable to satisfy our registration rights requirements regarding the Caltius Shares.

Under the Investor Rights Agreement, we agreed to provide demand registration rights covering the Caltius Shares through the end of the first anniversary of the closing in the limited instances that we are either no longer current in our periodic reports required by the Exchange Act, or we are otherwise unable to maintain the listing of our shares on the exchange or automated quotation system upon which they currently trade. We also agreed to provide "piggyback" registration rights on customary and standard terms until the earlier of: (i) such time that Caltius no longer owns any of the Caltius Shares; or (ii) the tenth anniversary of the date of the Investor Rights Agreement. We have agreed to provide Caltius with customary rights of indemnification and to cover certain of the expenses associated with the registration of the Caltius Shares. The demand and piggyback registration rights granted are subject to standard and customary rights of deferral, underwriter cut-back, and black-out periods. 

Off Balance Sheet Arrangements

As of December 31, 2011, 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.

Critical Accounting Policies

Accounting policies, methods and estimates are an integral part of the consolidated financial statements prepared by management and are based upon management’s current judgments. Those judgments are normally based on knowledge and experience with regard to past and current events and assumptions about future events. Certain accounting policies, methods and estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ from management’s current judgments. While there are a number of accounting policies, methods and estimates which affect our financial statements, the areas of particular significance include the assessment of the recoverability of long-lived assets (including acquired intangibles), recoverability of goodwill, and revenue recognition.  

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We perform an annual impairment test for goodwill. The first step of the impairment test requires that we determine the fair value of each reporting unit, and compare the fair value to the reporting unit’s carrying amount. To the extent a reporting unit’s carrying amount exceeds its fair value, an indication exists that the reporting unit’s goodwill may be impaired and we must perform a second more detailed impairment assessment. The second impairment assessment involves allocating the reporting unit’s fair value to all of its recognized and unrecognized assets and liabilities in order to determine the implied fair value of the reporting unit’s goodwill as of the assessment date. The implied fair value of the reporting unit’s goodwill is then compared to the carrying amount of goodwill to quantify an impairment charge as of the assessment date. We typically perform our annual impairment test effective as of April 1 of each year, unless events or circumstances indicate, an impairment may have occurred before that time. 

Acquired intangibles consist of customer related intangibles and covenants not to compete ("CNTC") agreements arising from our acquisitions. Customer related intangibles will be amortized using accelerated methods over approximately 5 years and CNTC agreements will be amortized using the straight line method over the term of the underlying agreement.

We review long-lived assets to be held-and-used for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. If the sum of the undiscounted expected future cash flows over the remaining useful life of a long-lived asset is less than its carrying amount, the asset is considered to be impaired. Impairment losses are measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset. When fair values are not available, we estimate fair value using the expected future cash flows discounted at a rate commensurate with the risks associated with the recovery of the asset. Assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell.

As a non-asset based carrier, we do not own transportation assets. We generate the major portion of our air and ocean freight revenues by purchasing transportation services from direct (asset-based) carriers and reselling those services to our customers. Based upon the terms in the contract of carriage, revenues related to shipments where we issue a House Airway Bill ("HAWB") or a House Ocean Bill of Lading ("HOBL") are recognized at the time the freight is tendered to the direct carrier at origin. Costs related to the shipments are also recognized at this same time based upon anticipated margins, contractual arrangements with direct carriers, and other known factors. The estimates are routinely monitored and compared to actual invoiced costs. The estimates are adjusted as deemed necessary by us to reflect differences between the original accruals and actual costs of purchased transportation.

This method generally results in recognition of revenues and purchased transportation costs earlier than the preferred methods under GAAP which do not recognize revenue until a proof of delivery is received or which recognize revenue as progress on the transit is made. Our method of revenue and cost recognition does not result in a material difference from amounts which would be reported under such other methods.

Item 4. Controls and Procedures.

An evaluation of the effectiveness of our "disclosure controls and procedures" (as such term is defined in Rules 13a-15(e) or 15d-15(e) of the Exchange Act as of December 31, 2011, was carried out by our management under the supervision and with the participation of our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"). Based upon that evaluation, our CEO and CFO concluded that, as of December 31, 2011, our disclosure controls and procedures were effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding disclosure.

There have not been any changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended December 31, 2011, which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1A. Risk Factors

Set forth below are risk factors that have materially changed since our annual report on Form 10-K, or risk factors which were not included in such report.

Risks Related to our Acquisition Strategy

Our credit facility places certain limits on the type and number of acquisitions we may make.

We currently maintain a $20.0 million revolving credit facility with BofA, including a $1.0 million sublimit to support letters of credit. Under the terms of the credit facility, we are subject to a number of financial and operational covenants, including covenants relating to the ratio of amounts borrowed from BofA, to consolidated EBITDA, which may limit the amount available under the facility. In addition, we may be required to obtain BofA’s consent prior to making any additional acquisitions. In the event that we are not able to satisfy the conditions of the credit facility in connection with a proposed acquisition, we would have to forego the acquisition unless we either obtained the BofA’s consent or retired the credit facility. This may prevent us from completing acquisitions which we determine are desirable from a business perspective and limit or slow our ability to achieve the critical mass we need to achieve our strategic objectives.

We currently have a $10.0 million mezzanine financing facility which requires us to meet certain financial covenants and subjects us to restrictions on future financings.

In connection with our acquisition of Isla, we entered into an Investment Agreement with Caltius pursuant to which we borrowed $10.0 million in exchange for a series of Senior Subordinated Notes (the "Caltius Financing"). Under the Caltius Financing, we are subject to certain financial covenants, including funded leverage ratio covenants, senior funded leverage ratio covenants and fixed charges ratio covenants. In addition, we are subject to significant restrictions upon prepayment and penalties if we prepay the outstanding indebtedness during the three year period after the Caltius Financing. Further, Caltius has the right, under certain circumstances, to require us to redeem all shares of our common stock issued to Caltius in connection with the Caltius Financing at the then fair market value of such shares. The Caltius Financing also places restrictions on our ability to enter into future financings and acquisition. If we are unable to satisfy our obligations under the Caltius Financing, we may be required to, among other things, immediately repay all outstanding principal and interest under the Caltius Financing, redeem all shares issued to Caltius in connection with the Caltius Financing, and forego future financing and acquisition opportunities. This may have a material adverse effect on our financial condition and results of operations.

Risks Related to our Common Stock

The influx of additional shares of our common stock onto the market may create downward pressure on the trading price of our common stock.

We recently completed several acquisitions in which we issued approximately 1,705,904 unregistered shares of our common stock over the past 12 months as part of the purchase price, or associated with the financing of a transaction. In addition, we may issue additional shares in connection with such acquisitions upon the achievement of certain earn-out thresholds. The availability of those shares for sale to the public under Rule 144 of the Securities Act, and sale of such shares in public markets could have an adverse effect on the market price of our common stock. Such an adverse effect on the market price would make it more difficult for us to sell our equity securities in the future at prices which we deem appropriate or to use our shares as currency for future acquisitions which will make it more difficult to execute our acquisition strategy.

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The issuance of additional shares may result in additional dilution to our existing stockholders.

We have issued, and may be required to issue, additional shares of common stock or common stock equivalents in payment of the purchase price of companies we have acquired. This will have the effect of further increasing the number of shares outstanding. In connection with future acquisitions, we may undertake the issuance of more shares of common stock without notice to our then existing stockholders. We may also issue additional shares in order to, among other things, compensate employees or consultants or for other valid business reasons in the discretion of our Board of Directors, and could result in diluting the interests of our existing stockholders.

The exercise or conversion of our outstanding options, warrants or other convertible securities or any derivative securities we issue in the future will result in the dilution of the ownership interests of our existing stockholders and may create downward pressure on the trading price of our common stock. We are currently authorized to issue 50 million shares of common stock. As of February 10, 2012, we had 32,310,913 outstanding shares of common stock. We may in the future issue up to 4,529,735 additional shares of our common stock upon exercise of existing options.

Ineffective internal controls could impact our business and operating results.

Our internal control over financial reporting may not prevent or detect misstatements because of its inherent limitations, including the possibility of human error, the circumvention or overriding of controls, or fraud. Even effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements. If we fail to maintain the adequacy of our internal controls, including any failure to implement required new or improved controls, or if we experience difficulties in their implementation, our business and operating results could be harmed and we could fail to meet our financial reporting obligations.

DBA Claims Notice and Related Matters

In January 2012, we asserted certain claims for indemnification against the former shareholders of DBA under under the Agreement and Plan of Merger dated March 29, 2011, relating to, among others, the failure to identify certain purchased transportation charges, the failure to identify certain related party transactions, and the breach of certain non-competition and non-solicitation covenants by one of the selling shareholders and an affiliate of such selling shareholder. In the absence of a resolution of the matter, we intend to file a formal arbitration action against the former DBA shareholders asserting these claims.

 Although the arbitration and ultimate resolution of this dispute will not likely occur within the short-term, the Company believes that these breaches will not have any meaningful long term adverse effect on its overall results of operations given the Company's: (i)  termination of the previously undisclosed related party transactions, (ii) efforts to retain existing customers, (iii)  efforts through the arbitration proceeding to assert legal remedies as a result of the breaches; and (iv) efforts through a concurrent civil proceeding to assert legal remedies against a former Company employee and affiliate of a selling shareholder who we believe breached certain non-competition and non-solicitation obligations to the Company. Nevertheless, near-term earnings could be negatively impacted as a result of any legal expenses incurred in connection with matter, although such amounts may be recoverable as an off-set to future amounts otherwise due the former shareholders of DBA under the Agreement and Plan of Merger.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the quarter ended December 31, 2011, we issued to our directors, officers and employees options to purchase an aggregate of 664,493 shares of our common stock. The options have a term of ten years and vest in three equal annual installments after the date of grant. The exercise price for each option is the closing price of our common stock on the date in which such option was granted.

The foregoing securities were issued in a private placement transaction pursuant to the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended, without engaging in any advertising or general solicitation of any kind and without payment of underwriting discounts or commissions to any person.

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Item 6. Exhibits

Exhibit No.	Exhibit	Method of Filing
2.1	Asset Purchase Agreement by and among Radiant Global Logistics, Inc., and Isla International, Ltd. (incorporated by reference to Exhibit 2.1 to the current report on Form 8-K, filed with the SEC on November 17, 2011)
4.1	Investor Rights Agreement dated December 1, 2011 among Radiant Logistics, Inc., Caltius Partners IV, LP, and Caltius Partners Executive IV, LP (incorporated by reference to Exhibit 2.1 to the current report on Form 8-K, filed with the SEC on December 7, 2011)
10.1	Employment Agreement between Jonathan Fuller and Radiant Global Logistics, Inc. (incorporated by reference to Exhibit 10.1 to the current report on Form 8-K, filed with the SEC on December 7, 2011)
10.2	Loan Agreement dated December 1, 2011 among Bank of America, N.A., Radiant Logistics, Inc., Radiant Global Logistics, Inc., Radiant Logistics Partners, LLC, Radiant Transportation Services, Inc., Adcom Express, Inc., DBA Distribution Services, Inc., and Radiant Customs Services, Inc. (incorporated by reference to Exhibit 10.2 to the current report on Form 8-K, filed with the SEC on December 7, 2011)
10.3	Subordination Agreement dated December 1, 2011 among Caltius Partners IV, LP, Caltius Partners Executive IV, LP, Radiant Logistics, Inc., Radiant Global Logistics, Inc., Radiant Logistics Partners, LLC, Radiant Transportation Services, Inc., Adcom Express, Inc., DBA Distribution Services, Inc., Radiant Customs Services, Inc., a Washington corporation and Bank of America, N.A. (incorporated by reference to Exhibit 10.3 to the current report on Form 8-K, filed with the SEC on December 7, 2011)
10.4	Investment Agreement dated December 1, 2011 among Radiant Logistics, Inc., Radiant Global Logistics, Inc., Radiant Logistics Partners, LLC, Radiant Customs Services, Inc., Radiant Transportation Services, Inc., Adcom Express, Inc., DBA Distribution Services, Inc., Caltius Partners IV, LP, and Caltius Partners Executive IV, LP (incorporated by reference to Exhibit 10.4 to the current report on Form 8-K, filed with the SEC on December 7, 2011)
10.5	Senior Subordinated Note payable to the order of Caltius Partners Executive IV, LP dated December 1, 2011 in the amount of $85,820.17 (incorporated by reference to Exhibit 10.5 to the current report on Form 8-K, filed with the SEC on December 7, 2011)
10.6	Senior Subordinated Note payable to the order of Caltius Partners IV, LP dated December 1, 2011 in the amount of $9,914,179.83 (incorporated by reference to Exhibit 10.6 to the current report on Form 8-K, filed with the SEC on December 7, 2011)
31.1	Certification by Principal Executive Officer pursuant to  Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
31.2	Certification by Principal Financial Officer pursuant to  Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted 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
99.1	Press Release dated February 13, 2012	Filed herewith

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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.

	RADIANT LOGISTICS, INC.
Date: February 13, 2012	/s/ Bohn H. Crain
	Bohn H. Crain
	Chief Executive Officer
Date: February 13, 2012	/s/ Todd E. Macomber
	Todd E. Macomber
	Senior Vice President and Chief Financial Officer

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EXHIBIT INDEX

Exhibit No.	Exhibit
31.1	Certification by Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification by Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certifications by 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
99.1	Press Release dated February 13, 2012	Filed herewith

44

EX-31.1

Exhibit 31.1

Certification

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Bohn H. Crain, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Radiant Logistics, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. As a certifying officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

DATE:	February 13, 2012
BY:	/s/ Bohn H. Crain
	Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Todd E. Macomber, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Radiant Logistics, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. As a certifying officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

DATE:	February 13, 2012
BY:	/s/ Todd E. Macomber
	Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(18 U.S.C. Section 1350)

Pursuant to 18 U.S.C. Section 1350, the undersigned officers of Radiant Logistics, Inc. (the "Company") hereby certifies that the Company's Quarterly Report on Form 10-Q for the period ended December 31, 2011 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

DATE: February 13, 2012

BY:	/s/ Bohn H. Crain
Chief Executive Officer
BY:	/s/ Todd E. Macomber
Chief Financial Officer

This certification is made solely for purposes of 18 U.S.C. Section 1350, subject to the knowledge standard set forth therein, and not for any other purpose. It is not being filed as part of the Report or as a separate disclosure document.

A signed original of this written statement required by Section 906 has been provided to Radiant Logistics, Inc. and will be retained by Radiant Logistics, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-99.1

Exhibit 99.1

 

For More Information, Press Only:

Stuart Hanson

(253) 677-5337

shanson@radiantdelivers.com

RADIANT LOGISTICS ANNOUNCES RESULTS FOR SECOND FISCAL QUARTER ENDED DECEMBER 31, 2011

Posts 32.8% Growth with Adjusted EBITDA of $2,221,000, Excluding Non-recurring Items

____________________________________________________________________________________

BELLEVUE, WA February 13, 2012 – Radiant Logistics, Inc. (AMEX: RLGT), a domestic and international logistics services company, today reported financial results for the three and six months ended December 31, 2011.

For the three months ended December 31, 2011, Radiant reported net income of $417,000 on $72.6 million of revenues, or $0.01 per basic and fully diluted share, including $188,000 in non-recurring transaction costs related to the Company’s acquisition of Isla International, Ltd.(“Isla”) and other transactions in process and $280,000 in non-recurring transition costs associated with the Company’s acquisition of DBA Distribution Services, Inc. (“DBA”) which are principally non-recurring personnel costs that are being eliminated from the acquired operations. For the three months ended December 31, 2010, Radiant reported net income of $716,000 on $44.5 million of revenues, or $0.02 per basic and fully diluted share.

For the six months ended December 31, 2011, Radiant reported net income of $1,073,000 on $144.4 million of revenues, or $0.03 per basic and fully diluted share, including $269,000 in non-recurring transaction costs related to the Company’s acquisition Isla and other transactions in process and $562,000 in non-recurring transition costs associated with the Company’s acquisition of DBA which are principally non-recurring personnel costs that are being eliminated from the acquired operations. For the six months ended December 31, 2010, Radiant reported net income of $1,499,000 on $90.9 million of revenues, or $0.05 per basic and fully diluted share, including a charge on litigation settlement of $150,000.

The Company reported adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $1,941,000 for the three months ended December 31, 2011, which includes $280,000 in non-recurring transition costs associated with the Company’s acquisition of DBA, compared to adjusted EBITDA of $1,672,000 for the three months ended December 31, 2010. Excluding the $280,000 in non-recurring transition costs, the Company would have reported $2,221,000 in adjusted EBITDA for the three months ended December 31, 2011, for an increase of $549,000. 

The Company also reported adjusted EBITDA (earnings before interest, taxes, depreciation amortization), of $3,581,000 for the six months ended December 31, 2011, which includes $563,000 in non-recurring transition costs associated with the Company’s acquisition of DBA and $231,000 in other non-recurring legal costs, compared to adjusted EBITDA of $3,381,000 for the comparable prior year period. Excluding the $794,000 in non-recurring costs, the Company would have reported $4,375,000 in adjusted EBITDA for the six months ended December 31, 2011, for an increase of $994,000. A reconciliation of our adjusted EBITDA to the most directly comparable GAAP measure appears later in this release.

The Company has also provided additional prior period analysis using pro forma results of operations presented as if Radiant had acquired DBA and Isla as of July 1, 2010 which will be available in the Company’s Form 10-Q for the quarter ended December 31, 2011.

“We continue to make good progress in the integration of DBA and cost reduction initiatives related to that acquisition,” said Bohn Crain, Chairman and CEO. “In addition, we are also making good progress in the integration of our most recent transaction, Laredo, Texas-based Isla International which will serve as Radiant’s Mexico Gateway. For the quarter ended December 31, 2011, we posted record revenues of $72.6 million, an improvement of $28.1 million or 63.2% over the comparable prior year period. Net transportation revenues also increased 42.8% to $20.2 million as compared to $14.2 million for the comparable prior year period. As we look at our operating costs as a function of net revenues, we saw reductions in agent commission expense (from 69.5% to 63.0%) partially offset by increases in our personnel costs (from 11.0% to 15.2%). This general dynamic is as expected with the composition of our network now including significant company owned operations in Newark, Los Angeles and Laredo. We also experienced similar increases in our selling, general and administrative expenses during the quarter which were 12.0% of net revenues for the quarter, as compared to 8.0% of net revenues for the comparable prior year period. These higher costs were driven principally by the incremental facilities costs of our three new company owned locations in Newark, Los Angles and Laredo as well as by non-recurring legal expenses of approximately $188,000 which we incurred in connection with our acquisition of Isla and other transactions in progress.”

“For the quarter ended December 31, 2011, we also reported adjusted EBITDA of $1,941,000 for the three months ended December 31, 2011, which includes $280,000 in non-recurring transition costs associated with our acquisition of DBA, compared to adjusted EBITDA of $1,672,000 for the comparable prior year period, for an increase of $269,000. Excluding the $280,000 in non-recurring transition costs associated with our acquisition of DBA, we would have reported $2,221,000 in adjusted EBITDA for the three months ended December 31, 2011, for an increase of $549,000 and 32.8% over the comparable prior year period.”

Mr. Crain continued, “We are also pleased to have completed our recent up-listing to the NYSE Amex which we believe will, over time, provide us with increased exposure to institutional investors and investment funds, as well as more transparency for the market. The up-listing is an important milestone and natural progression in the evolution of our company as we continue to leverage our status as a public company to provide our partners with an opportunity to share in the value that they help create. We believe our long-standing business strategy will continue to deliver positive results and sustain our trend of double digit growth going forward and we look forward to announcing other key milestones to our expanding investment audience in the near future."

Supplemental Pro Forma Information

We believe that supplemental disclosure of our adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization adjusted for stock-based compensation, unusual items and other non-cash costs is a useful measure for investors because it eliminates the effect of certain non-cash costs and provides an important metric for our business. A reconciliation of annual pro forma adjusted EBITDA amounts to net income, the most directly comparable GAAP measure is as follows:

(Amounts in 000’s)	THREE MONTHS ENDED DECEMBER 31,				SIX MONTHS ENDED DECEMBER 31,
	2011		2010		2011		2010
Net income	$	417	$	716	$	1,073	$	1,499
Net interest expense		206		36		294		72
Income tax expense		488		414		889		920
Depreciation and amortization		600		327		990		652
EBITDA		1,711		1,493		3,246		3,413
Share-based compensation and other non-cash charges		42		29		66		88
Transaction and severance costs		188				269
Loss on litigation settlement		—		150		—		150
Adjusted EBITDA (1)	$	1,941	$	1,672	$	3,581	$	3,381

(1) Excluding $280,000 in non-recurring transition costs associated with the Company’s acquisition of DBA, the Company’s adjusted EBITDA for the three months ended December 31, 2011 would have been $2,221,000. Excluding $563,000 in non-recurring transition costs associated with the Company’s acquisition of DBA and $231,000 in non-recurring legal costs, the Company’s adjusted EBITDA for the six months ended December 31, 2011 would have been $4,375,000.

Investor Conference Call

Radiant will host a conference call for shareholders and the investing community on Monday, February 13, 2012 at 4:00 pm, ET that will include a discussion of the contents of the release. The call can be accessed by dialing (877) 407-8031, or (201) 689-8031 for international participants, and is expected to last approximately 30 minutes. Callers are requested to dial in 5 minutes before the start of the call. An audio replay will be available for one week after the teleconference by dialing (877) 660-6853, or (201) 612-7415 for international callers, and using account number 286 and conference ID number 388384. The call will also be webcast and may be accessed via Radiant’s website at http://radiantdelivers.com or through InvestorCalendar.com.

About Radiant Logistics (AMEX : RLGT)

Radiant Logistics (www.radiantdelivers.com) is a non-asset based third-party transportation & logistics provider with complete global reach, as well as one of the largest and fastest growing networks in North America.  The company delivers world-class transportation, logistics and information solutions to its customers, as well as growth, liquidity, and ongoing support for its strategic operating partners.  Operating a network of over 100 company-owned and exclusive agent offices under the Radiant, Airgroup, Adcom Worldwide and Distribution By Air brands, the company services a diversified account base that includes manufacturers, distributors and government agencies, using a network of independent carriers and international agents positioned strategically around the world.

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding future operating performance, events, trends and plans. All statements other than statements of historical fact contained herein, including, without limitation, statements regarding our future financial position, business strategy, budgets, projected revenues and costs, and plans and objectives of management for future operations, are forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expects,” “intends,” “plans,” “projects,” “estimates,” “anticipates,” or “believes” or the negative thereof or any variation thereon or similar terminology or expressions. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are not guarantees and are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause our actual results to differ from our expectations, include but are not limited to, our ability to: use our Bellevue, Washington operations as a “platform” upon which we can build a profitable global transportation and supply chain management company; retain and build upon the relationships we have with our exclusive agency offices; continue the development of our back office infrastructure and transportation and accounting systems in a manner sufficient to service our expanding revenues and base of network operating locations; maintain and enhance the future operations of our company owned operating locations, continue growing our business and maintain historical or increased gross profit margins; locate suitable acquisition opportunities; secure the financing necessary to complete any acquisition opportunities we locate; assess and respond to competitive practices in the industries in which we compete, mitigate, to the best extent possible, our dependence on current management and certain of our larger exclusive agency locations; assess and respond to the impact of current and future laws and governmental regulations affecting the transportation industry in general and our operations in particular; as well as those risk factors disclosed in Item 1A of our Report on Form 10 K for the year ended June 30, 2011 other filings with the Securities and Exchange Commission and other public documents and press releases which can be found on our web-site (www.radiant-logistics.com). Readers are cautioned not to place undue reliance on our forward-looking statements, as they speak only as of the date made. Such statements are not guarantees of future performance or events and we undertake no obligation to disclose any revision to these forward-looking statements to reflect events or circumstances occurring after the date hereof.

# # #

RADIANT LOGISTICS, INC.

Consolidated Balance Sheets

	December 31, 2011			June 30, 2011
ASSETS
Current assets -
Cash and cash equivalents	$	2,119,199		$	434,185
Accounts receivable, net of allowance of $1,363,725 and $1,592,235 respectively		42,911,900			41,577,053
Current portion of employee loan receivable		31,211			21,401
Current portion of station and other receivables		78,485			141,372
Income tax deposit		377,761			—
Prepaid expenses and other current assets		3,279,817			1,761,273
Deferred tax asset		782,916			1,142,077
Total current assets		49,581,289			45,077,361
Furniture and equipment, net		1,643,194			1,428,063
Acquired intangibles, net		9,963,234			2,879,846
Goodwill		11,745,878			6,650,008
Employee loan receivable, net of current portion		88,775			64,494
Station and other receivables, net of current portion		97,955			116,965
Investment in real estate		40,000			40,000
Deposits and other assets		286,037			363,815
Total long term assets		22,221,879			10,115,128
Total assets	$	73,446,362		$	56,620,552
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities -
Accounts payable and accrued transportation costs	$	33,644,791		$	27,872,185
Commissions payable		2,792,216			3,570,858
Other accrued costs		2,057,595			1,992,694
Income taxes payable		—			333,999
Current portion of notes payable to former shareholders of DBA		767,092			800,000
Current portion of amounts due to former shareholders of acquired operations		3,158,708			2,657,781
Current portion of contingent consideration		269,796			—
Other current liabilities		133,531			135,927
Total current liabilities		42,823,729			37,363,444
Notes payable and other long-term debt, net of current portion and debt discount		17,065,373			11,869,268
Contingent consideration, net of current portion		3,805,204			—
Deferred rent liability		643,936			631,630
Deferred tax liability		242,644			485,907
Other long-term liabilities		88,821			120,571
Total long term liabilities		21,845,978			13,107,376
Total liabilities		64,669,707			50,470,820
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. Issued and outstanding: 32,310,913 and 31,676,438 shares at December 31, 2011 and June 30, 2011		18,685			18,051
Additional paid-in capital		12,609,024			11,060,701
Treasury stock, at cost, 4,919,239 shares at December 31, 2011 and June 30, 2011		(1,407,455	)		(1,407,455	)
Retained deficit		(2,542,798	)		(3,615,322	)
Total Radiant Logistics, Inc. stockholders’ equity		8,677,456			6,055,975
Non-controlling interest		99,199			93,757
Total stockholders’ equity		8,776,655			6,149,732
Total liabilities and stockholders’ equity	$	73,446,362		$	56,620,552

RADIANT LOGISTICS, INC.

Consolidated Statements of Income (Operations)

	THREE MONTHS ENDED DECEMBER 31,						SIX MONTHS ENDED DECEMBER 31,
	2011			2010			2011			2010
Revenue	$	72,613,729		$	44,496,820		$	144,446,773		$	90,857,877
Cost of transportation		52,365,148			30,314,763			102,959,272			62,557,124
Net revenues		20,248,581			14,182,057			41,487,501			28,300,753
Agent commissions		12,752,341			9,850,191			26,644,766			19,682,651
Personnel costs		3,078,281			1,561,268			5,972,019			3,118,428
Selling, general and administrative expenses		2,432,105			1,140,135			5,093,231			2,203,417
Transition costs associated with DBA acquisition		279,743			—			562,379			—
Depreciation and amortization		599,913			326,808			990,306			652,066
Total operating expenses		19,142,383			12,878,402			39,262,701			25,656,562
Income from operations		1,106,198			1,303,655			2,224,800			2,644,191
Other income (expense):
Interest income		5,064			5,630			9,998			11,439
Interest expense		(211,269	)		(42,179	)		(303,357	)		(84,421
Gain (loss) on litigation settlement		—			(150,000	)		—			(150,000
Other		47,231			63,407			119,960			89,693
Total other income (expense)		(158,974	)		(123,142	)		(173,399	)		(133,289
Income before income tax expense		947,224			1,180,513			2,051,401			2,510,902
Income tax expense		(487,966	)		(413,319	)		(889,435	)		(918,862
Net income		459,258			767,194			1,161,966			1,592,040
Less: Net income attributable to non-controlling interest		(41,761	)		(50,929	)		(89,442	)		(92,832
Net income attributable to Radiant Logistics, Inc.	$	417,497		$	716,265		$	1,072,524		$	1,499,208
Net income per common share – basic	$	0.01		$	0.02		$	0.03		$	0.05
Net income per common share – diluted	$	0.01		$	0.02		$	0.03		$	0.05
Weighted average shares outstanding:
Basic shares		31,954,955			30,122,700			31,815,696			30,296,880
Diluted shares		34,874,343			31,212,861			34,742,154			30,968,361

RADIANT LOGISTICS, INC.

Reconciliation of EBITDA to Net Income and Net Cash Provided By Operating Activities

(UNAUDITED)

As used in this report, adjusted EBITDA means earnings before interest, income taxes, depreciation and amortization adjusted for stock-based compensation, transaction and severance costs and other non-cash charges consistent with the financial covenants of our senior credit facility. We believe that adjusted EBITDA, as presented, represents a useful method of assessing the performance of our operating activities, as it reflects our earnings trends without the impact of certain non-cash charges and other non-recurring charges. Adjusted EBITDA is also used by our creditors in assessing debt covenant compliance. We understand that although securities analysts frequently use EBITDA in their evaluation of companies, it is not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the method of calculation. EBITDA is not intended as an alternative to cash flow provided by operating activities as a measure of liquidity, as an alternative to net income as an indicator of our operating performance, nor as an alternative to any other measure of performance in conformity with accounting principles generally accepted in the United States of America.

The following is a reconciliation of adjusted EBITDA to both net income and cash flow provided by operating activities:

	THREE MONTHS ENDED DECEMBER 31,						SIX MONTHS ENDED DECEMBER 31,
	2011			2010			2011			2010
Adjusted EBITDA	$	1,940,768		$	1,671,798		$	3,579,792		$	3,380,778
Transaction and severance costs		(188,022	)		—			(268,759	)		—
Stock-based compensation and other non-cash charges		(41,165	)		(28,857	)		(65,409	)		(87,660
Refund of Business & Occupancy tax (including interest)		—			—			—			—
Loss on litigation settlement		—			(150,000	)		—			(150,000
EBITDA		1,711,581			1,492,941			3,245,624			3,143,118
Depreciation and amortization		(599,913	)		(326,808	)		(990,306	)		(652,066
Interest expense, net		(206,205	)		(36,549	)		(293,359	)		(72,982
Income tax expense		(487,966	)		(413,319	)		(889,435	)		(918,862
Net income		417,497			716,265			1,072,524			1,499,208
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
Non-cash compensation expense (stock options)		41,165			25,832			65,409			80,771
Amortization of intangibles		473,833			248,192			764,588			493,575
Deferred income tax expense		267,642			119,432			115,898			993
Depreciation and leasehold amortization		126,080			78,616			225,718			158,491
Loss on litigation settlement		—			150,000			—			150,000
Change in non-controlling interest of subsidiaries		41,761			50,929			89,442			92,832
Amortization of loan fees and original issue discount		19,361			—			19,361			—
Loss on disposal of fixed assets		—			11,931			—			11,931
Recovery of doubtful accounts		(379,096	)		(125,860	)		(228,510	)		(152,143
CHANGE IN OPERATING ASSETS AND LIABILITIES:
Accounts receivable		38,471			112,949			(1,106,337	)		(2,188,908
Employee loan receivables		13,535			4,073			(34,091	)		3,573
Income tax deposit		132,822			—			(377,761	)		—
Station and other receivables		7,714			21,688			81,897			99,576
Prepaid expenses, deposits and other assets		(70,623	)		(679,054	)		(1,440,766	)		(699,719
Accounts payable & accrued transportation costs		3,150,476			1,072,032			5,772,606			2,018,439
Commissions payable		(818,403	)		(715,507	)		(778,642	)		(153,997
Other accrued costs		169,111			23,461			64,901			145,942
Deferred rent liability		13,468			—			12,306			—
Other long term liabilities		(19,229	)		48,059			(34,146	)		96,119
Income taxes payable		—			(95,680	)		(333,999	)		136,101
Total adjustments		3,208,088			351,093			2,877,874			293,576
Net cash provided by operating activities	$	3,625,585		$	1,067,358		$	3,950,398		$	1,792,784

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SUBSEQUENT EVENT

6 Months Ended

Dec. 31, 2011

Subsequent Events [Abstract]

Subsequent Events [Text Block]

NOTE 16 – SUBSEQUENT EVENT

OPEN

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Condensed Consolidated Statements of Cash Flows [Supplemental disclosure] (USD $)	6 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Increase In Goodwill And Amount Due To Former Stockholder		$ 28,522
Stock Issued During Period, Shares, Earn Out Payments (in shares)	134,475	732,038
Stock Issued During Period, Earn Out Payments, Per Share	$ 2.29	$ 0.35
Stock Issued During Period, Value, Earn Out Payments	308,548	258,510
Increase in Common Stock Issuable, Value, Earn Out Payments		732
Increase In Additional Paid In Capital, Earn Out Payments	308,414	257,778
Stock Issued During Period, Shares, Acquisitions (in shares)	500,000
Stock Issued During Period, Acquisitions, Per Share	$ 2.35
Decrease In Other Notes Payable And Other Long Debt	1,175,000
Increase In Common Stock Issuable, Value, Acquistions	500
Increase In Additional Paid In Capital, Acquisitons	1,174,500
Increase In Common Stock Issuable, Value	$ 134

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Condensed Consolidated Statements of Cash Flows [Parenthetical] (USD $)	6 Months Ended
	Dec. 31, 2011
Debt issuance costs	$ 637,407

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Condensed Consolidated Balance Sheets (USD $)	Dec. 31, 2011	Jun. 30, 2011
ASSETS
Cash and cash equivalents	$ 2,119,199	$ 434,185
Accounts receivable, net of allowance of $1,363,725 and $1,592,235, respectively	42,911,900	41,577,053
Current portion of employee loan receivable	31,211	21,401
Current portion of station and other receivables	78,485	141,372
Income tax deposit	377,761	0
Prepaid expenses and other current assets	3,279,817	1,761,273
Deferred tax asset	782,916	1,142,077
Total current assets	49,581,289	45,077,361
Furniture and equipment, net	1,643,194	1,428,063
Acquired intangibles, net	9,963,234	2,879,846
Goodwill	11,745,878	6,650,008
Employee loan receivable, net of current portion	88,775	64,494
Station and other receivables, net of current portion	97,955	116,965
Investment in real estate	40,000	40,000
Deposits and other assets	286,037	363,815
Total long term assets	22,221,879	10,115,128
Total assets	73,446,362	56,620,552
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued transportation costs	33,644,791	27,872,185
Commissions payable	2,792,216	3,570,858
Other accrued costs	2,057,595	1,992,694
Income taxes payable	0	333,999
Current portion of notes payable to former shareholders of DBA	767,092	800,000
Current portion of amounts due to former shareholders of acquired operations	3,158,708	2,657,781
Current portion of contingent consideration	269,796	0
Other current liabilities	133,531	135,927
Total current liabilities	42,823,729	37,363,444
Notes payable and other long-term debt, net of debt discount	17,065,373	11,869,268
Contingent consideration, net of current portion	3,805,204	0
Deferred rent liability	643,936	631,630
Deferred tax liability	242,644	485,907
Other long term liabilities	88,821	120,571
Total long term liabilities	21,845,978	13,107,376
Total liabilities	64,669,707	50,470,820
Stockholders' equity:
Preferred stock, $0.001 par value, 5,000,000 shares authorized; no shares issued or outstanding	0	0
Common stock, $0.001 par value, 50,000,000 shares authorized, 32,310,913 and 31,676,438 shares issued and outstanding, respectively	18,685	18,051
Additional paid-in capital	12,609,024	11,060,701
Treasury stock, at cost, 4,919,239 shares	(1,407,455)	(1,407,455)
Retained deficit	(2,542,798)	(3,615,322)
Total Radiant Logistics, Inc. stockholders' equity	8,677,456	6,055,975
Non-controlling interest	99,199	93,757
Total stockholders' equity	8,776,655	6,149,732
Total liabilities and stockholders' equity	$ 73,446,362	$ 56,620,552

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Condensed Consolidated Statement of Stockholders' Equity [Parenthetical] (USD $)	6 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Stock Issued During Period, Earn Out Payments, Per Share	$ 2.29	$ 0.35
Stock Issued During Period, Acquisitions, Per Share	$ 2.35

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STOCKHOLDERS EQUITY

6 Months Ended

Dec. 31, 2011

Stockholders Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

NOTE 13 – STOCKHOLDERS’ EQUITY

Preferred Stock

The Company is authorized to issue 5,000,000 shares of preferred stock, par value at $.001 per share. As of December 31, 2011 and 2010, none of the shares were issued or outstanding.

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OPERATING AND GEOGRAPHIC SEGMENT INFORMATION

6 Months Ended

Dec. 31, 2011

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

NOTE 15 – OPERATING AND GEOGRAPHIC SEGMENT INFORMATION

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker, or decision-making group, in making decisions regarding allocation of resources and assessing performance. The Company's chief decision-maker is the Chief Executive Officer. The Company continues to operate in a single operating segment.

The Company’s geographic operations outside the United States include shipments to and from Canada, Central America, Europe, Africa, Asia and Australia. The following data presents the Company’s revenue generated from shipments to and from these locations for the United States and all other countries, which is determined based upon the geographic location of a shipment's initiation and destination points (in thousands):

	United States				Other Countries				Total
	2011		2010		2011		2010		2011		2010
Three months ended December 31:
Revenue	$	43,005	$	25,537	$	29,609	$	18,960	$	72,614	$	44,497
Cost of transportation		28,274		16,295		24,091		14,020		52,365		30,315
Net revenue	$	14,731	$	9,242	$	5,518	$	4,940	$	20,249	$	14,182

	United Stated				Other Countries				Total
	2011		2010		2011		2010		2011		2010
Six months ended December 31:
Revenue	$	85,320	$	49,787	$	59,127	$	41,071	$	144,447	$	90,858
Cost of transportation		55,216		30,918		47,743		31,639		102,959		62,557
Net revenue	$	30,104	$	18,869	$	11,384	$	9,432	$	41,488	$	28,301

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Condensed Consolidated Statements of Cash Flows (USD $)	6 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Net income	$ 1,072,524	$ 1,499,208
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
non-cash compensation expense (stock options)	65,409	80,771
amortization of intangibles	764,588	493,575
deferred income tax expense	115,898	993
depreciation and leasehold amortization	225,718	158,491
change in non-controlling interest	89,442	92,832
amortization of loan fees and original issue discount	19,361	0
loss on litigation settlement	0	150,000
loss on disposal of assets	0	11,931
Recovery of doubtful accounts	(228,510)	(152,143)
CHANGE IN OPERATING ASSETS AND LIABILITIES:
accounts receivable	(1,106,337)	(2,188,908)
employee loan receivable	(34,091)	3,573
station and other receivables	81,897	99,576
income tax deposit	(377,761)	0
prepaid expenses and other assets	(1,440,766)	(699,719)
accounts payable and accrued transportation costs	5,772,606	2,018,439
commissions payable	(778,642)	(153,997)
other accrued costs	64,901	145,942
income taxes payable	(333,999)	136,101
other long-term liabilities	(34,146)	96,119
deferred rent liability	12,306	0
Net cash provided by operating activities	3,950,398	1,792,784
CASH FLOWS USED FOR INVESTING ACTIVITIES:
Acquisition of Isla International, Ltd.	(7,656,582)	0
Purchase of furniture and equipment	(328,113)	(169,684)
Payments made to former shareholders of acquired operations	(515,525)	(336,509)
Net cash used for investing activities	(8,500,220)	(506,193)
CASH FLOWS PROVIDED BY (USED FOR) FINANCING ACTIVITIES:
Repayments to credit facility, net of credit fees	(2,945,032)	(1,321,392)
Repayments of notes payable to former shareholders of acquired operations	(98,725)	0
Proceeds from debt issuance to Caltius, net of debt issuance costs of $637,407	9,362,593	0
Distributions to non-controlling interest	(84,000)	(78,000)
Purchases of treasury stock	0	(471,265)
Net cash provided by (used for) financing activities	6,234,836	(1,870,657)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	1,685,014	(584,066)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	434,185	682,108
CASH AND CASH EQUIVALENTS, END OF PERIOD	2,119,199	98,042
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Income taxes paid	1,487,663	781,768
Interest paid	$ 181,899	$ 62,438

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Condensed Consolidated Balance Sheets [Parenthetical] (USD $)	Dec. 31, 2011	Jun. 30, 2011
Allowance for accounts receivable (in dollars)	$ 1,363,725	$ 1,592,235
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	31,676,438	32,310,913
Common stock, shares outstanding	31,676,438	32,310,913
Treasury stock, shares	4,919,239	4,919,239

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VARIABLE INTEREST ENTITY

6 Months Ended

Dec. 31, 2011

Variable Interest Entity [Abstract]

Variable Interest Entity Disclosure [Text Block]

NOTE 8 – VARIABLE INTEREST ENTITY

Certain entities in which equity investors do not have the characteristics of a controlling financial interest or do not have the sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties are considered "variable interest entities". RLP is 40% owned by Radiant Global Logistics ("RGL"), qualifies as a variable interest entity and is included in the Company’s condensed consolidated financial statements (see Note 9). RLP commenced operations in February 2007. Non-controlling interest recorded as an expense on the statements of operations was $89,442 and $92,832 for the six months ended December 31, 2011 and 2010, respectively.

The following table summarizes the balance sheets of RLP:

	December 31,		June 30,
	2011		2011
ASSETS
Accounts receivable	$	1997	$	2,012
Accounts receivable – Radiant Logistics		173,217		170,030
Prepaid expenses and other current assets		2,736		1,191
Total assets	$	177,950	$	173,233
LIABILITIES AND PARTNERS' CAPITAL
Other accrued costs	$	12,618	$	16,971
Total liabilities				16,971
Partners' capital		165,332		156,262
Total liabilities and partners' capital	$	177,950	$	173,233

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Document and Entity Information	6 Months Ended
	Dec. 31, 2011	Feb. 10, 2012
Entity Registrant Name	RADIANT LOGISTICS, INC
Entity Central Index Key	0001171155
Current Fiscal Year End Date	--06-30
Entity Filer Category	Smaller Reporting Company
Trading Symbol	rlgt
Entity Common Stock, Shares Outstanding		32,310,913
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Dec. 31, 2011
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2012

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RELATED PARTY

6 Months Ended

Dec. 31, 2011

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

NOTE 9 – RELATED PARTY

RLP is owned 40% by RGL and 60% by Radiant Capital Partners, LLC ("RCP"), a company for which the Chief Executive Officer of the Company is the sole member. RLP is a certified minority business enterprise which was formed for the purpose of providing the Company with a national accounts strategy to pursue corporate and government accounts with diversity initiatives. RCP’s ownership interest entitles it to a majority of the profits and distributable cash, if any, generated by RLP. The operations of RLP are intended to provide certain benefits to the Company, including expanding the scope of services offered by the Company and participating in supplier diversity programs not otherwise available to the Company. In the course of evaluating and approving the ownership structure, operations and economics emanating from RLP, a committee consisting of the independent Board member of the Company, considered, among other factors, the significant benefits provided to the Company through association with a minority business enterprises, particularly as many of the Company’s largest current and potential customers have a need for diversity offerings. In addition, the Committee concluded that the economic relationship with RLP was on terms no less favorable to the Company than terms generally available from unaffiliated third parties. RLP is consolidated in the financial statements of the Company (see Note 8).

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Condensed Consolidated Statements of Operations (USD $)	3 Months Ended		6 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2011	Dec. 31, 2010
Revenue	$ 72,613,729	$ 44,496,820	$ 144,446,773	$ 90,857,877
Cost of transportation	52,365,148	30,314,763	102,959,272	62,557,124
Net revenues	20,248,581	14,182,057	41,487,501	28,300,753
Agent commissions	12,752,341	9,850,191	26,644,766	19,682,651
Personnel costs	3,078,281	1,561,268	5,972,019	3,118,428
Selling, general and administrative expenses	2,432,105	1,140,135	5,093,231	2,203,417
Transition costs associated with DBA acquisition	279,743	0	562,379	0
Depreciation and amortization	599,913	326,808	990,306	652,066
Total operating expenses	19,142,383	12,878,402	39,262,701	25,656,562
Income from operations	1,106,198	1,303,655	2,224,800	2,644,191
Other income (expense):
Interest income	5,064	5,630	9,998	11,439
Interest expense	(211,269)	(42,179)	(303,357)	(84,421)
Other	47,231	63,407	119,960	89,693
Loss on litigation settlement	0	(150,000)	0	(150,000)
Total other expense	(158,974)	(123,142)	(173,399)	(133,289)
Income before income tax expense	947,224	1,180,513	2,051,401	2,510,902
Income tax expense	(487,966)	(413,319)	(889,435)	(918,862)
Net income	459,258	767,194	1,161,966	1,592,040
Less: Net income attributable to non-controlling interest	(41,761)	(50,929)	(89,442)	(92,832)
Net income attributable to Radiant Logistics, Inc.	$ 417,497	$ 716,265	$ 1,072,524	$ 1,499,208
Net income per common share _ basic and diluted (in dollars per share)	$ 0.01	$ 0.02	$ 0.03	$ 0.05
Weighted average shares outstanding:
Basic shares (in shares)	31,954,955	30,122,700	31,815,696	30,296,880
Diluted shares (in shares)	34,874,343	31,212,861	34,742,154	30,968,361

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RECENT ACCOUNTING PRONOUNCEMENTS

6 Months Ended

Dec. 31, 2011

Accounting Changes and Error Corrections [Abstract]

Accounting Changes and Error Corrections [Text Block]

NOTE 3 – RECENT ACCOUNTING PRONOUNCEMENTS

In September 2011, the FASB issued ASU No. 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Goodwill for Impairment. The guidance in ASU 2011-08 is intended to reduce complexity and costs by allowing an entity the option to make a qualitative evaluation about the likelihood of goodwill impairment to determine whether it should calculate the fair value of a reporting unit. The amendments also improve previous guidance by expanding upon the examples of events and circumstances that an entity should consider between annual impairment tests in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Also, the amendments improve the examples of events and circumstances that an entity having a reporting unit with a zero or negative carrying amount should consider in determining whether to measure an impairment loss, if any, under the second step of the goodwill impairment test. The amendments in this ASU are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011, if an entity’s financial statements for the most recent annual or interim period have not yet been issued. The adoption of this guidance is not expected to have a material impact on the Company’s financial position or results of operations.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Dec. 31, 2011

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) Use of Estimates

The preparation of financial statements and related disclosures in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Such estimates include revenue recognition, accruals for the cost of purchased transportation, the fair value of acquired assets and liabilities, accounting for the issuance of shares and share based compensation, the assessment of the recoverability of long-lived assets and goodwill, the establishment of an allowance for doubtful accounts and the valuation allowance for deferred tax assets. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the period that they are determined to be necessary. Actual results could differ from those estimates.

b) Fair Value Measurements

In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.

c) Fair Value of Financial Instruments

The fair values of the Company’s receivables, accounts payable and accrued transportation costs, commissions payable, other accrued costs, income tax deposit, and amounts due to former shareholders of acquired operations approximate the carrying values dues to the relatively short maturities of these instruments. The fair value of the Company’s credit facility, DBA notes payable, and other long-term liabilities would not differ significantly from the recorded amount if recalculated based on current interest rates. The fair value of the subordinated Caltius notes payable is not practicable to determine given the complex terms associated with this instrument. Contingent consideration attributable to the Company's recent acquisition of Isla has been discounted to fair value.

d) Cash and Cash Equivalents

For purposes of the statements of cash flows, cash equivalents include all highly liquid investments with original maturities of three months or less which are not securing any corporate obligations.

e) Concentrations

The Company maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts.

f) Accounts Receivable

The Company’s receivables are recorded when billed and represent claims against third parties that will be settled in cash. The carrying value of the Company’s receivables, net of the allowance for doubtful accounts, represents their estimated net realizable value. The Company evaluates the collectability of accounts receivable on a customer-by-customer basis. The Company records a reserve for bad debts against amounts due to reduce the net recognized receivable to an amount the Company believes will be reasonably collected. The reserve is a discretionary amount determined from the analysis of the aging of the accounts receivable, historical experience and knowledge of specific customers.

On occasion the Company extends credit to agent-based stations.

g) Furniture and Equipment

Technology (computer software, hardware, and communications), furniture, and equipment are stated at cost, less accumulated depreciation over the estimated useful lives of the respective assets. Depreciation is computed using five to seven year lives for vehicles, communication, office, furniture, and computer equipment using the double declining balance method. Computer software is depreciated over a three year life using the straight line method of depreciation. For leasehold improvements, the cost is depreciated over the shorter of the lease term or useful life on a straight line basis. Upon retirement or other disposition of these assets, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss, if any, is reflected in other income or expense. Expenditures for maintenance, repairs and renewals of minor items are charged to expense as incurred. Major renewals and improvements are capitalized.

h) Goodwill

The Company performs an annual impairment test for goodwill. The first step of the impairment test requires that the Company determine the fair value of its reporting unit, and compare the fair value to the reporting unit's carrying amount. The Company has only one reporting unit. To the extent the reporting unit's carrying amount exceeds its fair value, an indication exists that the reporting unit's goodwill may be impaired and the Company must perform a second more detailed impairment assessment. The second impairment assessment involves allocating the reporting unit’s fair value to all of its recognized and unrecognized assets and liabilities in order to determine the implied fair value of the reporting unit’s goodwill as of the assessment date. The implied fair value of the reporting unit’s goodwill is then compared to the carrying amount of goodwill to quantify an impairment charge as of the assessment date. The Company performs its annual impairment test effective as of April 1 of each year, unless events or circumstances indicate impairment may have occurred before that time. As of December 31, 2011, management believes there are no indications of impairment.

i) Long-Lived Assets

Acquired intangibles consist of customer-related intangibles and covenants not to compete ("CNTC") agreements arising from our acquisitions. Customer-related intangibles are amortized using accelerated methods over approximately 5 years and CNTC agreements are amortized using the straight-line method over the term of the underlying agreement (see Notes 5, 6 and 7).

The Company reviews long-lived assets to be held-and-used for impairment whenever events or changes in circumstances indicate the carrying amount of the assets may not be recoverable. If the sum of the undiscounted expected future cash flows over the remaining useful life of a long-lived asset is less than its carrying amount, the asset is considered to be impaired. Impairment losses are measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risks associated with the recovery of the asset. Assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. Management has performed a review of all long-lived assets and has determined no impairment of the respective carrying value has occurred as of December 31, 2011.

j) Commitments

The Company has operating lease commitments for equipment rentals, office space, and warehouse space under non-cancelable operating leases expiring at various dates through May 2021. As of December 31, 2011, minimum future lease payments under these non-cancelable operating leases for the next five fiscal years and thereafter are as follows:

Fiscal Year Ending June 30	Amount
2012 (remaining portion)	$	1,012,459
2013		2,025,176
2014		1,862,197
2015		1,582,709
2016		1,011,222
Thereafter		1,611,368
Total minimum lease payments	$	9,105,131

Rent expense amounted to $532,352 and $982,351 for the three and six months ended December 31, 2011. Rent expense amounted to $160,846 and $342,559 for the three and six months ended December 31, 2010.

k) 401(k) Savings Plan

The Company has employee savings plans under which the Company provides a discretionary matching contribution. During the three months ended December 31, 2011 and 2010, the Company’s contributions under the plans were $30,993 and $27,585 respectively. During the six months ended December 31, 2011 and 2010, the Company’s contributions under the plans were $58,545 and $51,818 respectively.

l) Income Taxes

Deferred income tax assets and liabilities are recognized for the expected future tax consequences of events that have been reflected in the consolidated financial statements. Deferred tax assets and liabilities are determined based on the differences between the book values and the tax bases of particular assets and liabilities. Deferred tax assets and liabilities are measured using tax rates in effect for the years in which the differences are expected to reverse. A valuation allowance is provided to offset the net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company reports a liability for unrecognized tax benefits resulting from uncertain income tax positions taken or expected to be taken in an income tax return. Estimated interest and penalties are recorded as a component of interest expense or other expense, respectively.

m) Revenue Recognition and Purchased Transportation Costs

As a non-asset based carrier, the Company does not own transportation assets. The Company generates the major portion of its air and ocean freight revenues by purchasing transportation services from direct (asset-based) carriers and reselling those services to its customers. Based upon the terms in the contract of carriage, revenues related to shipments where the Company issues a House Airway Bill ("HAWB") or a House Ocean Bill of Lading ("HOBL") are recognized at the time the freight is tendered to the direct carrier at origin. Costs related to the shipments are also recognized at this same time based upon anticipated margins, contractual arrangements with direct carriers, and other known factors. The estimates are routinely monitored and compared to actual invoiced costs. The estimates are adjusted as deemed necessary by the Company to reflect differences between the original accruals and actual costs of purchased transportation.

This method generally results in recognition of revenues and purchased transportation costs earlier than the preferred methods under generally accepted accounting principles ("GAAP") which do not recognize revenue until a proof of delivery is received or which recognize revenue as progress on the transit is made. The Company’s method of revenue and cost recognition does not result in a material difference from amounts that would be reported under such other methods.

The Mompany derives its revenue from transportation and other value added services including warehousing and fulfillment services.

All other revenue, including revenue from other value added services including warehousing and fulfillment services, is recognized upon completion of the service.

n) Share-Based Compensation

The Company accounts for share-based compensation under the fair value recognition provisions such that compensation cost is measured at the grant date based on the value of the award and is expensed ratably over the vesting period. Determining the fair value of share-based awards at the grant date requires judgment, including estimating the percentage of awards which will be forfeited, stock volatility, the expected life of the award, and other inputs. If actual forfeitures differ significantly from the estimates, share-based compensation expense and the Company's results of operations could be materially impacted.

For the three months ended December 31, 2011, the Company recorded share based compensation expense of $41,165, which, net of income taxes, resulted in a $25,523 reduction of net income. For the three months ended December 31, 2010, the Company recorded share based compensation expense of $25,833, which, net of income taxes, resulted in a $16,016 reduction of net income.

For the six months ended December 31, 2011, the Company recorded share based compensation expense of $65,409, which, net of income taxes, resulted in a $40,554 reduction of net income. For the six months ended December 31, 2010, the Company recorded share based compensation expense of $80,771, which, net of income taxes, resulted in a $50,078 reduction of net income.

o) Basic and Diluted Income per Share

Basic income per share is computed by dividing net income attributable to common stockholders by the weighted average number of common shares outstanding. Diluted income per share is computed similar to basic income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares, such as stock options, had been issued and if the additional common shares were dilutive.

For the three months ended December 31, 2011, the weighted average outstanding number of potentially dilutive common shares totaled 34,873,343, including options to purchase 4,529,735 shares of common stock at December 31, 2011, of which 214,493 were excluded as their effect would have been anti-dilutive. For the three months ended December 31, 2010, the weighted average outstanding number of potentially dilutive common shares totaled 31,212,861 including options to purchase 3,647,779 shares of common stock at December 31, 2010, of which 1,020,000 were excluded as their effect would have been anti-dilutive.

For the six months ended December 31, 2011, the weighted average outstanding number of potentially dilutive common shares totaled 34,742,154, including options to purchase 4,529,735 shares at December 31, 2011, of which 214,493 were excluded as their effect would have been anti-dilutive. For the six months ended December 31, 2010, the weighted average outstanding number of potentially dilutive common shares totaled 30,968,361, including options to purchase 3,647,779 shares at December 31, 2010, of which 1,020,000 were excluded as their effect would have been anti-dilutive.

The following table reconciles the numerator and denominator of the basic and diluted per share computations for earnings per share as follows: 

	Three months ended December 31,				Six months ended December 31,
	2011		2010		2011		2010
Weighted average basic shares outstanding		31,954,955		30,122,700		31,815,696		30,296,880
Options		2,919,388		1,090,161		2,926,458		671,481
Weighted average dilutive shares outstanding		34,874,343		31,212,861		34,742,154		30,968,361

p) Other Comprehensive Income

The Company has no components of Other Comprehensive Income and, accordingly, no Statement of Comprehensive Income has been included in the accompanying condensed consolidated financial statements.

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SHARE BASED COMPENSATION

6 Months Ended

Dec. 31, 2011

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

NOTE 14 – SHARE-BASED COMPENSATION

The Company issued options to employees to purchase 207,408 shares of common stock at an exercise price of $2.36 price per share in October 2011, options to purchase 450,000 shares of common stock at an exercise price of $2.35 per share in December 2011 and options to purchase 7,085 shares of common stock at an exercise price of $2.40 price per share in December 2011. The options vest 20% per year over a five-year period.

Share based compensation costs recognized during the six months ended December 31, 2011, include compensation costs based on the fair value estimated on the grant-date for all share based payments granted to date. No options have been exercised as of December 31, 2011.

During the six months ended December 31, 2011, the weighted average fair value per share of employee options granted in October 2011 was $1.27 and the weighted average fair value per share of employee options granted in December 2011 was $1.49. The fair value of options granted were estimated on the date of grant using the Black-Scholes option pricing model, with the following assumptions for each issuance of options:

	October 2011	December 2011
Risk-Free Interest Rate	0.47%	0.39% to 0.49%
Expected Term	6.5 years	6.5 years
Expected Volatility	58.75%	71.84%
Expected Dividend Yield	0.00%	0.00%
Forfeiture Rate	0.00%	0.00%

During the six months ended December 31, 2011 and 2010, the Company recognized stock option compensation expense of $65,409 and $80,771, respectively. The following table summarizes activity under the plan for the six months ended December 31, 2011.

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life - Years		Aggregate Intrinsic Value
Outstanding at June 30, 2010		3,865,242	$	0.58		5.57 years	$	7,049,001
Granted		664,493		2.35
Exercised		—		—
Forfeited		—		—
Expired		—		—
Outstanding at December 31, 2011		4,529,735	$	0.84		5.77 years	$	7,079,248
Exercisable at December 31, 2011		3,128,556	$	0.54		4.45 years	$	5,817,680

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FURNITURE AND EQUIPMENT

6 Months Ended

Dec. 31, 2011

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

NOTE 10 – FURNITURE AND EQUIPMENT

Furniture and equipment consists of the following:

	December 31,			June 30,
	2011			2011
Vehicles	$	33,788		$	33,788
Communication equipment		31,359			31,359
Office equipment		534,038			511,872
Furniture and fixtures		206,318			122,488
Computer equipment		750,690			733,819
Computer software		1,487,058			1,283,581
Leasehold improvements		755,697			641,188
		3,798,948			3,358,095
Less:  Accumulated depreciation and amortization		(2,155,754	)		(1,930,032	)
Furniture and equipment – net	$	1,643,194		$	1,428,063

Depreciation and amortization expense related to furniture and equipment was $225,718 and $158,491 for the six months ended December 31, 2011 and 2010, respectively.

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ACQUISITION OF ISLA INTERNATIONAL LTD.

6 Months Ended

Dec. 31, 2011

Acquisition Of ISLA International Ltd [Abstract]

Acquisition Of ISLA International Ltd [Text Block]

NOTE 6 – ACQUISITION OF ISLA INTERNATIONAL, LTD.

On December 1, 2011, through our wholly-owned subsidiary, RGL, the Company acquired Laredo, Texas based Isla International, Ltd. ("Isla"), a privately-held company providing a full range of cross-border transportation and logistics services between the United States and Mexico. The transaction, was structured as an asset purchase and valued at up to approximately $15.0 million, consisting of: (i) cash of $7,656,582 paid at closing, (ii) $1.325 million payable in shares of our restricted stock on the three-month anniversary of the closing (to be valued based upon a 30-day volume weighted average price to be calculated preceding the delivery of the shares); (iii) up to $3.975 million in aggregate "Tier-1 Earn-Out Payments" covering the four-year earn-out period immediately following closing, based upon the acquired Isla business unit generating a "Modified Gross Profit Contribution" (as defined within the Asset Purchase Agreement) of $6,927,644 for each twelve month earn-out period following closing; and (iv) a "Tier-2 Earn-Out Payment" after the fourth anniversary of the closing, equal to 20% of the amount by which the aggregate "Modified Gross Profit Contribution" of the acquired Isla business unit during the four-year earn-out period exceeds $27,710,576, with such payment not to exceed $2.0 million.  The various Tier-1 Earn-Out Payments and the Tier-2 Earn-Out Payment shall be made in a combination of cash and our common stock, as we may, at our sole discretion, elect to satisfy up to 25% of each of the earn-out payments through the issuance of our common stock valued based upon a 30-day volume weighted average price to be calculated preceding the delivery of the shares. 

The transaction was financed through the net proceeds made available through the issuance of $10.0 million in subordinated debt. As well, in connection with the transaction, the Company entered into an amended and restated revolving credit facility with the Company's senior lender, Bank of America, N.A. 

Founded in 1996, Isla provides bilingual expertise in both north and south bound cross-border transportation and logistics services to a diversified account base including manufacturers in the automotive, appliance, electronics and consumer packaged goods industries from its strategically-aligned location in Laredo, Texas and will serve as the Company’s gateway to the Mexico markets.  

The total recorded purchase price consisted of an initial cash payment of $7,656,582, $1.325 million in future payments and estimated contingent consideration associated with the Tier-1 and Tier-2 earn-outs of $4.075 million. The following table summarizes the preliminary allocation of the purchase price based on the estimated fair value of the acquired assets and liabilities at December 1, 2011:

Furniture and equipment	$	112,736
Intangibles		7,847,976
Goodwill		5,095,870
Total assets acquired	$	13,056,582

The fair values of the intangible assets were estimated using a discounted cash flow approach with Level 3 inputs. Under this method, an intangible asset's fair value is equal to the present value of the incremental after-tax cash flows (excess earnings) attributable solely to the intangible asset over its remaining useful life. To calculate fair value, the Company used risk-adjusted cash flows discounted at rates considered appropriate given the inherent risks associated with each type of asset. The Company believes the level and timing of cash flows appropriately reflect market participant assumptions.

The fair values of the contingent consideration were estimated using future projected gross margins of ISLA and the corresponding future earn-out payments. To calculate fair value, the future earn-out payments were then discounted using Level 3 inputs. The Company believes the discount rate used to discount the earn-out payments reflect market participant assumptions.

The goodwill recognized is attributable primarily to the strategic location of the Isla operation along the U.S-Mexico border, allowing Isla to serve as the Company's gateway to Mexico and a strategic differentiator in the marketplace. The goodwill recorded is expected to be deductible for income tax purposes over a period of 15 years.

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ACQUISITION OF ADCOM EXPRESS, INC.

6 Months Ended

Dec. 31, 2011

Acquisition Of Adcom Express Inc [Abstract]

Acquisition Of Adcom Express Inc [Text Block]

NOTE 4 – ACQUISITION OF ADCOM EXPRESS, INC.

On September 5, 2008, the Company entered into and closed a Stock Purchase Agreement (the "SPA") pursuant to which it acquired 100% of the issued and outstanding stock of Adcom Express, Inc., d/b/a Adcom Worldwide ("Adcom"), a privately-held Minnesota corporation. Founded in 1978, Adcom provides a full range of domestic and international freight forwarding solutions to a diversified account base including manufacturers, distributors and retailers through a combination of three company-owned and twenty-seven independent agency locations across North America.

Contingent consideration associated with the acquisition of Adcom included "Tier-1 Earn-Out Payments" of up to $700,000 annually, covering the four year earn-out period through June 30, 2012, based upon Adcom achieving certain levels of "Gross Profit Contribution" (as defined in the Agreement), payable 50% in cash and 50% in shares of Company common stock (valued at delivery date); and a "Tier-2 Earn-Out Payment" of up to $2,000,000, equal to 20% of the amount by which the Adcom cumulative Gross Profit Contribution exceeds $16,560,000 during the four year earn-out period. The Tier-1 Earn-Out Payments and certain amounts of the Tier-2 Payments may be subject to acceleration upon occurrence of a "Corporate Transaction" (as defined in the SPA), which includes a sale of Adcom or the Company, or certain changes in corporate control.

Mr. Friedman, the sole shareholder of Adcom, earned $617,095 in Tier-1 earn-out payment for the period ending June 30, 2011. This Tier-1 earn-out was paid 50% in cash and 50% paid in Company stock during the six months ending December 31, 2011.

Assuming minimum targeted earnings levels are achieved, the following table summarizes our contingent base earn-out payments related to the acquisition of Adcom, for the fiscal year indicated based on achieving gross profit contributions (in thousands):

Estimated payment anticipated for fiscal year(1):	2013
Earn-out period:	7/1/2011 – 6/30/2012
Earn-out payments:
Cash	$	350
Equity		350
Total potential earn-out payments	$	700
Total gross margin targets	$	4,320

(1) Earn-out payments are paid October 1 following each fiscal year end in a combination of cash and Company common stock.

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ACQUISITION OF DBA DISTRIBUTION SERVICES INC

6 Months Ended

Dec. 31, 2011

Acquisition Of DBA Distribution Services Inc [Abstract]

Acquisition Of DBA Distribution Services Inc [Text Block]

NOTE 5 – ACQUISITION OF DBA DISTRIBUTION SERVICES, INC.

On April 6, 2011, the Company closed on an Agreement and Plan of Merger (the "Agreement") pursuant to which the Company acquired DBA Distribution Services, Inc. ("DBA"), a privately-held New Jersey corporation. For financial accounting purposes, the transaction was deemed to be effective as of April 1, 2011. The shares of DBA were acquired by the Company via a merger transaction pursuant to which DBA was merged into a newly-formed subsidiary of the Company. The $12.0 million transaction consisted of cash of $5.4 million paid at closing, the delivery of $4.8 million in seller notes payable over the next three years and $1.8 million in connection with the achievement of certain integration milestones to be paid within 180 days after the milestones have been achieved; however, no later than the 18th month anniversary of the closing. In May 2011, the Company elected to satisfy $2.4 million of the seller notes through the issuance of shares of the Company's common stock. The remaining seller notes may be subject to acceleration upon occurrence of a “Corporate Transaction” (as defined in the Form of Note), which includes a future sale of DBA or Radiant, or certain changes in corporate control. The cash component of the transaction was financed through a combination of our existing funds and funds available under an existing revolving credit facility provided by Bank of America, N.A.

Founded in 1981, DBA services a diversified account base including manufacturers, distributors and retailers through a combination of company-owned logistics centers located in Somerset, New Jersey and Los Angeles, California and twenty-four agency offices located across North America.

The total net assets acquired were $12.0 million.  The following table summarizes the final allocation of the purchase price based on the estimated fair value of the acquired assets and liabilities at April 6, 2011:

Current assets	$	16,909,820
Furniture and equipment		562,257
Deferred tax asset		723,666
Intangibles		1,801,562
Goodwill		5,021,603
Other assets		392,562
Total assets acquired		25,411,470
Current liabilities		12,572,203
Long term deferred tax liability		684,594
Other long term liabilities		154,673
Total liabilities acquired		13,411,470
Net assets acquired	$	12,000,000

The fair value of the financial assets acquired included receivables with a fair value of $14,675,079 as of the acquisition date. The gross amount due under the contracts at the acquisition date was $15,728,582, of which $1,053,503 was expected to be uncollectible.

The fair values of the intangible assets were estimated using a discounted cash flow approach with Level 3 inputs. Under this method, an intangible asset's fair value is equal to the present value of the incremental after-tax cash flows (excess earnings) attributable solely to the intangible asset over its remaining useful life. To calculate fair value, the Company used risk-adjusted cash flows discounted at rates considered appropriate given the inherent risks associated with each type of asset. The Company believes the level and timing of cash flows appropriately reflect market participant assumptions.

The goodwill recognized is attributable primarily to the expected cost synergies associated with eliminating redundancies and migrating back office operations of DBA to the Company, in addition to an expectation of better buy rates from some carriers due to increased volumes associated with the acquisition of DBA.  The goodwill recorded is not expected to be deductible for income tax purposes.

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ACQUIRED INTANGIBLE ASSETS

6 Months Ended

Dec. 31, 2011

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets Disclosure [Text Block]

NOTE 7 – ACQUIRED INTANGIBLE ASSETS

The table below reflects acquired intangible assets related to the acquisitions of Airgroup, Automotive Services Group, Adcom, DBA and Isla:

	As of December 31, 2011				As of June 30, 2011
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortizable intangible assets:
Customer related	$	15,201,538	$	5,446,998	$	7,533,562	$	4,702,100
Covenants not to compete		300,000		91,306		120,000		71,616
Total	$	15,501,538	$	5,538,304	$	7,653,562	$	4,773,716
Aggregate amortization expense:
For six months ended December 31, 2011			$	764,588
For six months ended December 31, 2010			$	493,575
Aggregate amortization expense for the years ending June 30:
2012 – For the remainder of the year			$	1,570,842
2013				2,369,879
2014				1,546,555
2015				1,239,063
2016				2,211,061
2017				1,025,834
Total			$	9,963,234

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PROVISION FOR INCOME TAXES

6 Months Ended

Dec. 31, 2011

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

NOTE 12 –PROVISION FOR INCOME TAXES

For the three months ended December 31, 2011, the Company recognized net income tax expense of $487,966 which consisted of current income tax expense of $220,325 and deferred income tax expense of $267,641 For the three months ended December 31, 2010, the Company recognized net income tax expense of $413,319 which consisted of current income tax expense of $293,887, and deferred income tax expense of $119,432.

For the six months ended December 31, 2011, the Company recognized net income tax expense of $889,435 which consisted of current income tax expense of $773,537 and deferred income tax expense of $115,898. For the six months ended December 31, 2010, the Company recognized net income tax expense of $918,862 which consisted of current income tax expense of $917,869, and deferred income tax expense of $993.

Tax years which remain subject to examination by federal and state authorities are the years ended June 30, 2008, 2009, 2010 and 2011.

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Condensed Consolidated Statement of Stockholders' Equity (USD $)	Common Stock [Member]	Additional Paid-In Capital [Member]	Treasury Stock [Member]	Retained Deficit [Member]	Noncontrolling Interest [Member]	Total
Balance at Jun. 30, 2011	$ 18,051	$ 11,060,701	$ (1,407,455)	$ (3,615,322)	$ 93,757	$ 6,149,732
Balance (in shares) at Jun. 30, 2011	31,676,438
Issuance of common stock to the former Adcom shareholder per earn-out agreement at $2.29 per share	134	308,414				308,548
Issuance of common stock to the former Adcom shareholder per earn-out agreement at $2.29 per share (in shares)	134,475					134,475
Issuance of common stock related to funding for Isla acquisition at $2.35 per share	500	1,174,500				1,175,000
Issuance of common stock related to funding for Isla acquisition at $2.35 per share (in shares)	500,000					500,000
Share-based compensation	0	65,409	0	0	0	65,409
Distributions to non-controlling interest	0	0	0	0	(84,000)	(84,000)
Net income for the six months ended December 31, 2011	0	0	0	1,072,524	89,442	1,161,966
Balance at Dec. 31, 2011	$ 18,685	$ 12,609,024	$ (1,407,455)	$ (2,542,798)	$ 99,199	$ 8,776,655
Balance (in shares) at Dec. 31, 2011	32,310,913

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THE COMPANY AND BASIS OF PRESENTATION

6 Months Ended

Dec. 31, 2011

Accounting Policies [Abstract]

Business Description and Basis of Presentation [Text Block]

NOTE 1 – THE COMPANY AND BASIS OF PRESENTATION

The Company

Radiant Logistics, Inc. (the "Company") is a non-asset based transportation and logistics services company providing customers domestic and international freight forwarding services and an expanding array of value added supply chain management services, including order fulfillment, inventory management and warehousing. The Company is executing a strategy to expand operations through a combination of organic growth and the strategic acquisition of best-of-breed, non-asset based transportation and logistics providers.

The Company completed the first step in its business strategy through the acquisition of Airgroup Corporation ("Airgroup") effective as of January 1, 2006. Airgroup is a Bellevue, Washington based non-asset based logistics company providing domestic and international freight forwarding services through a network which includes a combination of company-owned and exclusive agent offices across North America.

The Company continues to identify a number of additional companies as suitable acquisition candidates and has completed three material acquisitions since its acquisition of Airgroup. In November 2007, the Company acquired the Automotive Services Group in Detroit, Michigan to service the automotive industry.In September 2008, the Company acquired Adcom Express, Inc. d/b/a Adcom Worldwide ("Adcom"), adding an additional 30 locations across North America and augmenting the Company’s overall domestic and international freight forwarding capabilities. In April 2011, the Company acquired DBA Distribution Services, Inc., d/b/a Distribution by Air ("DBA"), adding an additional 26 locations across North America further expanding its physical network and service capabilities. In December 2011, the Company acquired Laredo, Texas-based Isla, International Ltd, to serve as the Company’s gateway to Mexico.

In connection with the acquisition of Adcom, the Company changed the name of Airgroup Corporation to Radiant Global Logistics, Inc. ("RGL") in order to better position its centralized back-office operations to service a multi-brand network. RGL, through the Airgroup, Adcom and DBA network brands, has a diversified account base including manufacturers, distributors and retailers using a network of independent carriers and international agents positioned strategically around the world.

The Company’s growth strategy will continue to focus on both organic growth and acquisitions. From an organic perspective, the Company will focus on strengthening existing and expanding new customer relationships. One of the drivers of the Company’s organic growth will be retaining existing, and securing new exclusive agency locations. Since the Company’s acquisition of Airgroup in January 2006, the Company has focused its efforts on the build-out of its network of exclusive agency offices, as well as enhancing its back-office infrastructure, transportation and accounting systems. The Company will continue to search for targets that fit within its acquisition criteria.

Interim Disclosure

The condensed consolidated financial statements included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations. The Company’s management believes that the disclosures are adequate to make the information presented not misleading. These condensed financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2011.

The interim period information included in this Quarterly Report on Form 10-Q reflects all adjustments, consisting of normal recurring adjustments, that are, in the opinion of the Company’s management, necessary for a fair statement of the results of the respective interim periods. Results of operations for interim periods are not necessarily indicative of results to be expected for an entire year.

Basis of Presentation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries as well as a single variable interest entity, Radiant Logistics Partners LLC ("RLP"), which is 40% owned by RGL and whose accounts are included in the consolidated financial statements. All significant intercompany balances and transactions have been eliminated.

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NOTES PAYABLE AND OTHER LONG TERM DEBT

6 Months Ended

Dec. 31, 2011

Debt Disclosure [Abstract]

Long-term Debt [Text Block]

NOTE 11 – NOTES PAYABLE AND OTHER LONG-TERM DEBT

Notes payable and other long-term debt consist of the following;

	December 31, 2011			June 30, 2011
Notes Payable – Caltius	$	10,000,000		$	—
Less: Original Issue Discount (net)		(1,162,448	)		—
Less: Debt Issuance Costs (net)		(630,598	)		—
Total Caltius Senior Subordinated  Notes (net)		8,206,954			—
Notes Payable – DBA shareholders		2,301,275			2,400,000
Long Term Credit Facility		7,324,236			10,269,268
Total notes payable and other long-term debt	$	17,832,465		$	12,669,268
Less: Current portion		(767,092	)		(800,000	)
Total notes payable and other long-term debt	$	17,065,373		$	11,869,268

Caltius Senior Subordinated Notes

In connection with the Company’s acquisition of Isla International, Ltd., effective as of December 1, 2011, the Company entered into an Investment Agreement with Caltius Partners IV, LP and Caltius Partners Executive IV, LP (collectively, "Caltius"). Under the Investment Agreement, Caltius provided the Company with a $10.0 million aggregate principal amount evidenced by the issuance of senior subordinated notes (the "Senior Subordinated Notes"), the net proceeds of which were primarily used to finance the cash payments due at closing of the Isla transaction. The Senior Subordinated Notes accrue interest at the rate of 13.5% per annum (the "Accrual Rate"), and must be paid currently in cash on a quarterly basis at a rate of 11.75% per annum (the "Pay Rate"). The outstanding principal balance of the Senior Subordinated Notes will be increased by an amount (the "PIK Amount") equal to the difference between interest accrued at the Accrual Rate and Interest Accrued at the Pay Rate unless the Company makes an election to pay the PIK Amount in cash. The Senior Subordinated Notes are non-amortizing, with all principal due upon maturity at December 1, 2016.

The Senior Subordinated Notes are unsecured, and pursuant to the terms of the Subordination Agreement dated December 1, 2011 among Bank of America, N.A., Caltius, the Company and the co-borrowers under the Investment Agreement (the "Subordination Agreement"), are subordinated to the Company's credit facility with Bank of America, N.A. (the "Senior Facility"). The Subordination Agreement provides that, in general, the Company and the co-borrowers may not make, and Caltius may not receive, any payment with respect to the Senior Subordinated Notes or other subordinated debt if, at the time of such payment: (i) a payment default exists under the Senior Facility and such default has not been cured or waived; or (ii) the Company, its co-borrowers and Caltius shall have received a notice from Bank of America, N.A. stating that a financial covenant default exists under the Senior Facility and the sum of the unrestricted cash of the Company and the co-borrowers and the aggregate availability (without regard to any default) under the Senior Facility is less than $5.0 million. The Subordination Agreement also places restrictions on the ability of the Company and the co-borrowers to prepay the Senior Subordinated Notes and amend any documents associated with the Senior Subordinated Notes.

The Senior Subordinated Notes may not be prepaid during the first two years, except in conjunction with a sale of all or substantially all of the assets of the Company and its co-borrowers taken as a whole, or a merger or consolidation of the Company or any of its co-borrowers and with a prepayment premium of 5% of any principal repaid during the first two years. During the third year of the financing, the Senior Subordinated Notes may be prepaid with a prepayment premium of 2% of any principal repaid during the third year. Thereafter, the Senior Subordinated Notes may be prepaid with no prepayment penalty.

Upon a Change of Control (as defined in the Investment Agreement), the holders of the Senior Subordinated Notes have the right (but not the obligation) to require us to (i) prepay all or any portion of the Senior Subordinated Notes, all accrued but unpaid interest thereon, and all applicable repayment charges, and (ii) pay in full all of the other obligations then owed to such holders.

Under the Investment Agreement, the Company also issued 500,000 restricted shares of Company common stock to Caltius. The Company agreed to issue an additional 100,000 restricted shares of Company common stock to Caltius (all shares issued to Caltius are sometimes referred to herein collectively as the "Caltius Shares") if within the first twelve months of the financing, the Company's shares are not traded on the New York Stock Exchange Amex Equities ("AMEX"). The Company agreed to provide certain limited registration rights covering the Caltius Shares as more fully described below. Also, under the Investment Agreement, the Company agreed to provide Caltius board observation rights providing Caltius the right to designate one representative to attend and observe meetings of our Board of Directors, and to maintain key man life insurance covering our CEO, Bohn Crain.

The terms of the Investment Agreement are subject to certain customary affirmative and negative covenants. These include, but are not limited to, restrictions on: (i) types and amounts of indebtedness that can be incurred; (ii) dividends that can be paid; (iii) distributions that can be made; (iv) certain asset sales, lease commitments, capital expenditures, acquisitions and investments. In addition, the Investment Agreement prohibits the Company from incurring any earn-out obligations or seller notes in connection with any future acquisitions, unless explicitly subordinated to the Senior Subordinated Notes, or, in general, any indebtedness that is subordinated to the Senior Facility, unless such indebtedness is also subordinated to the Senior Subordinated Notes.

The Investment Agreement contains financial covenants including, but not limited to, funded leverage ratio covenants, senior funded leverage ratio covenants and fixed charges ratio covenants. The first financial covenant limits our ratio of "Funded Debt" (as defined therein) to consolidated EBITDA (as adjusted) and measured on a rolling four quarter basis to 4.25 to 1, reducing to 4.00 to 1 at March 31, 2013, reducing to 3.75 to 1 at March 31, 2014 and reducing to 3.50 to 1 at March 31, 2015. The second financial covenant limits the Company's ratio of Senior Debt (defined as amounts borrowed from the Bank and the Senior Subordinated Notes) to consolidated EBITDA (as adjusted) and measured on a rolling four quarter basis to 3.75 to 1, reducing to 3.50 to 1 on March 31, 2013, reducing to 3.25 to 1 on March 31, 2014 and reducing to 3.00 to 1 on March 31, 2015. The third financial covenant requires that the Company maintains a basic fixed charge coverage ratio of at least 1.05 to 1.0. 

Under the Investment Agreement, the Company is permitted to make additional acquisitions only if certain conditions are satisfied, including the following: (i) the acquisition constitutes a business reasonably related to our then current business; (ii) no default or event of default shall exist prior to or will be caused as a result of such acquisition; (iii) Caltius has been provided with prior written notice of such acquisition, such notice to include (a) a description of the property or equity interests to be purchased, (b) the price and terms of such acquisition, (c) a certificate of a financial officer, certifying as to certain information requested in the Investment Agreement, and (d) such other information with respect thereto as is reasonably requested by Caltius; (iv) in the event of an acquisition of equity interests of a company, such company shall become a wholly-owned subsidiary; (v) the target company shall have as of the last day of the most recent fiscal quarter of such company ending on or immediately prior to the date of such acquisition actual (or pro forma to the extent approved in writing by Caltius) EBITDA and net income greater than $1, in each case for the 12 month period ending on such date; (vi) the aggregate cash consideration payable at the closing of the acquisition shall not exceed $7.5 million for any single transaction and $12.5 million in the aggregate in any fiscal year or such other amount approved in writing by the Caltius; provided, however, that (a) the foregoing limitation shall exclude cash consideration derived from the proceeds of sales of equity interests issued by the Company during the nine-month period prior to the closing of such acquisition to the extent the Company notifies Caltius in writing of the use of such cash consideration from sales such equity interests in such transaction or transactions and (b) the written consent of Caltius shall be required if the aggregate cash consideration payable at the closing of such transaction is equal to or greater than $25.0 million; (vii) the post-closing availability under the Senior Facility is at least $4.0 million on a pro forma basis; (viii) the number of permitted acquisitions that the Company and its co-borrowers have completed in such fiscal year does not exceed three; and (ix) the Company shall have provided to Caltius certain deliverables for such acquisition. 

The Investment Agreement contains a number of events of default, certain of which are typical for transactions of this type, including, without limitation, the following events: (i) failure to pay amounts due under the Senior Subordinated Notes; (ii) a breach of any representation or warranty contained in the Investment Agreement or related documents; (iii) failure to comply with or perform certain covenants under the Investment Agreement; (iv) any material default under any of our indebtedness or that of the co-borrowers, including unsatisfied judgments, in excess of agreed upon per item and aggregate amounts; (v) the bankruptcy, insolvency or the appointment of a receiver; (vi) the dissolution, liquidation, winding-up or termination of the Company or any of the co-borrowers; (vii) the Company or any co-borrower suspends or is enjoined, restrained or in any way prevented by the order of any governmental authority from conducting all or any material part of its business for more than 30 calendar days; or (viii) Bohn Crain ceases to serve as the Chief Executive Officer of the Company and the Company does not appoint a successor acceptable to Caltius within 30 days after the date on which Bohn Crain is no longer serving as the Chief Executive Officer.

The co-borrowers under the Investment Agreement include Radiant Logistics, Inc., RGL (f/k/a Airgroup Corporation), Adcom (d/b/a Adcom Worldwide), DBA (d/b/a Distribution by Air), Radiant Transportation Services ("RTS", f/k/a Radiant Logistics Global Services, Inc.), Radiant Customs Services, Inc. ("RCS") and RLP.

In connection with the Caltius financing and effective as of December 1, 2011, the Company also entered into an Investor Rights Agreement with Caltius under which the Company agreed to provide limited registration rights covering the Caltius Shares and agreed to certain contingent redemption rights regarding the Caltius Shares. Under the Investor Rights Agreement, Caltius has the right to cause the Company to redeem the Caltius Shares at their then appraised fair market value if (subject to certain notice and cure periods): (a) the Company’s shares of common stock are no longer listed and registered, quoted or eligible for quotation, on an exchange or automated quotation system; (b) the Company has been unable to timely file all periodic reports required by the Securities Exchange Act of 1934; and (c) the Company has otherwise been unable to satisfy our registration rights requirements regarding the Caltius Shares.

Under the Investor Rights Agreement, the Company agreed to provide demand registration rights covering the Caltius Shares through the end of the first anniversary of the closing in the limited instances that the Company are either no longer current in our periodic reports required by the Securities Exchange Act of 1934, or the Company is otherwise unable to maintain the listing of its shares on the exchange or automated quotation system upon which they currently trade. The Company also agreed to provide "piggyback" registration rights on customary and standard terms until the earlier of: (i) such time that Caltius no longer owns any of the Caltius Shares; or (ii) the tenth anniversary of the date of the Investor Rights Agreement. The Company has agreed to provide Caltius with customary rights of indemnification and to cover certain of the expenses associated with the registration of the Caltius Shares. The demand and piggyback registration rights granted are subject to standard and customary rights of deferral, underwriter cut-back, and black-out periods.

DBA – Notes Payable

In connection with the close of Distribution by Air, the Company issued notes payable in the amount of $4.8 million payable to the former shareholders of Distribution by Air.  The seller notes payable are due annually on March 31 in three equal payments. The notes also accrue interest at 6.5%, with payments of that interest due on a quarterly basis.

The note contained an Optional Forced Conversion Right which allowed the Company at its sole discretion on or before the three month anniversary of the closing date to elect to satisfy up to $2.4 million of the notes payable by issuance of Company stock. In May 2011, the Company elected to satisfy $2.4 million of the seller notes through the issuance of shares of the Company's common stock.

Bank of America – Credit Facility

Effective December 1, 2011, the Company entered into an agreement (the "Loan Agreement") with Bank of America, N.A. (the "Lender"). Under the Loan Agreement, the Lender provided the Company with a $20.0 million senior secured credit facility, including a $1.0 million sublimit to support letters of credit (collectively, the "Senior Facility"). Advances under the Senior Facility are available to fund future acquisitions, capital expenditures or for other corporate purposes. The Senior Facility had the effect of amending and fully restating our pre-existing senior credit facility with the Lender as amended from time to time, to accommodate the subordinated debt provided by Caltius Mezzanine, as described below. Borrowings under the Senior Facility accrue interest, at the Company’s option, at the Lender's prime rate minus 0.75% to plus 0.50% or LIBOR plus 1.75% to 3.00%, and can be adjusted up or down during the term of the Senior Facility based on the Company’s performance relative to certain financial covenants. The Senior Facility has a maturity date of November 30, 2013, and is collateralized by the Company's accounts receivable and other assets of its subsidiaries. Advances under the Senior Facility of up to 80% of eligible domestic accounts receivable and up to 60% of eligible foreign accounts receivable, are available to fund future acquisitions, capital expenditures or for other corporate purposes.

The terms of the Senior Facility are subject to certain financial and operational covenants which may limit the amount otherwise available under the Senior Facility. The first financial covenant limits the Company's ratio of "Funded Debt" (as defined therein) to consolidated EBITDA (as adjusted) and measured on a rolling four quarter basis to 4.00 to 1, reducing to 3.75 to 1 at December 31, 2012, reducing to 3.5 to 1 at December 31, 2013, and reducing to 3.25 to 1 at December 31, 2014. The second financial covenant limits the Company's ratio of Senior Debt (defined as amounts borrowed from the Bank) to consolidated EBITDA (as adjusted) and measured on a rolling four quarter basis to 2.50 to 1 and reducing to 2.25 to 1 on December 31, 2012. The third financial covenant requires the Company maintain a basic fixed charge coverage ratio of at least 1.25 to 1.0. The fourth financial covenant is a minimum profitability standard which requires the Company not to incur a net loss before taxes, amortization of acquired intangibles and extraordinary items in any two consecutive quarterly accounting periods.

Under the terms of the Senior Facility, the Company is permitted to make additional acquisitions without the consent of the Lender, only if certain conditions are satisfied. The conditions imposed by the Senior Facility include the following: (i) the absence of an event of default under the Senior Facility; (ii) the company to be acquired must be in the transportation and logistics industry; (iii) the purchase price to be paid must be consistent with the Company’s historical business and acquisition model; (iv) after giving effect for the funding of the acquisition, the Company must have undrawn availability of at least $4.0 million under the Senior Facility; (v) the Lender must be reasonably satisfied with projected financial statements the Company provides covering a twelve month period following the acquisition; (vi) the acquisition documents must be provided to the Lender and must be consistent with the description of the transaction provided to the Lender; and (vii) the number of permitted acquisitions is limited to three per fiscal year and the aggregate cash consideration payable at closing shall not exceed $7.5 million for any single transaction and $12.5 million in the aggregate, provided however the foregoing limitation shall exclude cash consideration derived from the proceeds of sales of newly issued equity interests of the Company during the nine month period prior to the closing of any such transaction and the aggregate consideration at closing is not more than $25.0 million. In the event the Company is not able to satisfy the conditions of the Senior Facility in connection with a proposed acquisition, the Company must either forego the acquisition, obtain the Lender's consent, or retire the Senior Facility.

The co-borrowers of the Senior Facility include Radiant Logistics, Inc., RGL (f/k/a Airgroup Corporation), Adcom (d/b/a Adcom Worldwide), DBA (d/b/a Distribution by Air), RTS (f/k/a Radiant Logistics Global Services, Inc.), RCS and RLP. RLP has been certified as a minority business enterprise, and focuses on corporate and government accounts with diversity initiatives. As a co-borrower under the Senior Facility, the accounts receivable of RLP are eligible for inclusion within the overall borrowing base of the Company and all borrowers will be responsible for repayment of the debt associated with advances under the Senior Facility, including those advanced to RLP. At December 31, 2011, the Company was in compliance with all of its covenants.

As of December 31, 2011, the Company had $3.0 million in advances under the Senior Facility and $4,324,236 in outstanding payments which had not yet been processed by the bank. The outstanding payments have been reclassified from cash, as they will be advanced from, or against, the Senior Facility when processed by the bank.

At December 31, 2011, based on available collateral and $491,800 in outstanding letter of credit commitments, there was $16,508,200 available for borrowing under the Senior Facility based on advances outstanding.