SECURITIESAND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-KSB

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| /X/  | Annual Report Pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934 |

For the fiscal year ended:December 31, 2004

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| / /  | Transition Report Pursuant toSection 13 or 15(d) of the Securities Exchange Act of 1934 |

Forthe transition period from______________to______________

Commission File Number 000-50908

RAND ACQUISITIONCORPORATION

(Name of Small BusinessIssuer in Its Charter)

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| **Delaware**                                    |  | **20-1195343**                                    |
| (Stateof Incorporation)                         |  | (Small Business IssuerI.R.S. EmployerI.D. Number) |
| **450 ParkAvenue, 10th FloorNew York, NewYork** |  | **10022**                                         |
| (Address of principal executive offices)        |  | (zipcode)                                         |
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212-644-3450

(Issuer's Telephone Number, IncludingArea Code)

Securities registered pursuant to Section 12(b) ofthe Act:

None

Securitiesregistered pursuant to Section 12(g) of the Act:

Units consisting of one share of Common Stock,par value $.0001 per share, and two Warrants Common Stock, $.0001par value per share Warrants to purchase shares of Common Stock

Check whether the Issuer (1) has filed all reports requiredto be filed by Section 13 or 15(d) of the Exchange Act during the past12 months (or for such shorter period that the registrant was requiredto file such reports), and (2) has been subject to such filingrequirement for the past 90 days. Yes      No 

Check if there is no disclosure of delinquent filers inresponse to Item 405 of Regulation S-B contained in this form, and nodisclosure will be contained, to the best of the registrant'sknowledge, in definitive proxy or information statements incorporatedby reference in Part III of this Form 10-KSB or any amendment to thisForm 10-KSB. 

Issuer's revenues for thefiscal year ended December 31, 2004 were $0.

As of March24, 2005, the aggregate market value of the common stock held bynon-affiliates of the Registrant was approximately $22,823,941.

As of March 30, 2005, there were 5,600,000 shares of CommonStock, $.0001 par value per share, outstanding.

Transitional Small Business Disclosure Format (check one):Yes      No 

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PART I

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| ITEM 1.   | DESCRIPTION OF BUSINESS |

RandAcquisition Corporation is a blank check company formed on June 2, 2004to effect a merger, capital stock exchange, asset acquisition or othersimilar business combination with an operating business.

OnNovember 2, 2004, we closed our initial public offering of 4,000,000units with each unit consisting of one share of our common stock andtwo warrants, each to purchase one share of our common stock at anexercise price of $5.00 per share. The units were sold at an offeringprice of $6.00 per unit, generating gross proceeds of $24,000,000. OnNovember 3, 2004, we sold an additional 600,000 units pursuant to theunderwriters' over-allotment option raising additional grossproceeds of $3,600,000. After deducting the underwriting discounts andcommissions and the offering expenses, the total net proceeds to usfrom the offering were approximately $24,605,000, of which $23,736,000was deposited into a trust fund and the remaining proceeds ($869,000)are available to be used to provide for business, legal and accountingdue diligence on prospective business combinations and continuinggeneral and administrative expenses. Through December 31, 2004, we haveused approximately $91,000 of the net proceeds that were not depositedinto the trust fund to pay general and administrative expenses. The netproceeds deposited into the trust fund remain on deposit in the trustfund earning interest. As of December 31, 2004, there was $23,804,261held in the trust fund.

We are not presently engaged in, and wewill not engage in, any substantive commercial business until weconsummate a business combination. We intend to utilize our cash,including the funds held in the trust fund, capital stock, debt or acombination of the foregoing in effecting a business combination. Abusiness combination may involve the acquisition of, or merger with, acompany which does not need substantial additional capital but whichdesires to establish a public trading market for its shares, whileavoiding what it may deem to be adverse consequences of undertaking apublic offering itself. These include time delays, significant expense,loss of voting control and compliance with various Federal and statesecurities laws. In the alternative, we may seek to consummate abusiness combination with a company that may be financially unstable orin its early stages of development or growth.

Our efforts inidentifying a prospective target business will not be limited to aparticular industry. Instead, we are focusing on various industriesincluding logistics and distribution, infrastructure and manufacturing.We are concentrating on businesses that we believe are financiallystable, are not likely to be subject to  foreign competition orrapid technological change and have the opportunity for long-termgrowth.

Selection of a target business and structuring of abusiness combination

We anticipate that target businesscandidates will be brought to our attention from various unaffiliatedsources, including investment bankers, venture capital funds, privateequity funds, leveraged buyout funds, management buyout funds and othermembers of the financial community, who may present solicited orunsolicited proposals. Our officers, directors and special advisor, aswell as their affiliates may also bring to our attention targetbusiness candidates. While we do not currently have any agreements orplans to engage professional firms that specialize in businessacquisitions to assist us in our search for a target business, we maydo so in the future. If we do, we may be required to pay such firm afinder's fee or other compensation. In no event, however, will wepay any of our initial officers, directors or stockholders(collectively, our "Founders") or any entitywith which they are affiliated any finder's fee or othercompensation for services rendered to us prior to or in connection withthe consummation of a business combination.

Our management hasvirtually unrestricted flexibility in identifying and selecting aprospective target business. In evaluating a prospective targetbusiness, our management considers, among other factors, thefollowing:

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|  | •  | financialcondition and results of operation; |

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|  | •  | cashflowpotential; |

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|  | •  | experienceand skill of management and availability of additionalpersonnel; |

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|  | •  | capitalrequirements; |

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|  | •  | competitiveposition; |

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|  | •  | barriers toentry bycompetitors; |

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|  | •  | stage ofdevelopment of the products, processes orservices; |

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|  | •  | degree ofcurrent or potential market acceptance of the products, processes orservices; |

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|  | •  | proprietaryfeatures and degree of intellectual property or other protection of theproducts, processes orservices; |

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|  | •  | regulatoryenvironment of the industry;and |

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|  | •  | costs associatedwith effecting the business combination. |

These criteria are notintended to be exhaustive. Any evaluation relating to the merits of aparticular business combination will be based, to the extent relevant,on the above factors as well as other considerations deemed relevant byour management in effecting a business combination consistent with ourbusiness objective. In evaluating a prospective target business, weconduct extensive due diligence reviews which encompass, among otherthings, meetings with incumbent management and inspection offacilities, as well as review of financial and other information whichwill be made available to us.

Fair Market Value of TargetBusiness

The initial target business that we acquire must havea fair market value equal to at least 80% of our net assets atthe time of such acquisition. The fair market value of such businesswill be determined by our board of directors based upon standardsgenerally accepted by the financial community, such as actual andpotential sales, earnings and cash flow and book value. If our board isnot able to independently determine that the target business has asufficient fair market value, we will obtain an opinion from anunaffiliated, independent investment banking firm with respect to thesatisfaction of such criteria. We will not be required to obtain anopinion from an investment banking firm as to the fair market value ifour board of directors independently determines that the targetbusiness has sufficient fair market value.

Opportunity forstockholder approval of business combination

Prior to thecompletion of a business combination, we will submit the transaction toour stockholders for approval, even if the nature of the acquisition issuch as would not ordinarily require stockholder approval underapplicable state law. In connection with seeking stockholder approvalof a business combination, we will furnish our stockholders with proxysolicitation materials prepared in accordance with the SecuritiesExchange Act of 1934, which, among other matters, will include adescription of the operations of the target business and auditedhistorical financial statements of the business.

In connectionwith the vote required for any business combination, our Founders haveagreed to vote their respective shares of common stock owned by themimmediately prior to our initial public offering ("FounderShares") in accordance with the vote of the majority ofthe shares of our common stock sold in such offering ("IPOShares"). This voting arrangement shall not apply to anyshares included in units purchased by our Founders in our initialpublic offering or purchased by them after such offering in the openmarket. We will proceed with the business combination only if amajority of the IPO Shares are voted in favor of the businesscombination and stockholders holding less than 20% of the IPOShares exercise their conversion rights.

Conversion rights

At the time we seek stockholder approval of any businesscombination, we will offer the holders of IPO Shares the right to havesuch shares converted to cash if the stockholder votes against the

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business combination and the businesscombination is approved and completed. The actual per-share conversionprice will be equal to the amount in the trust fund, inclusive of anyinterest, as of the record date for determination of stockholdersentitled to vote on the business combination, divided by the totalnumber of IPO Shares. As of December 31, 2004, the per-share conversionprice would have been approximately $5.17. An eligible stockholder mayrequest conversion at any time after the mailing to our stockholders ofthe proxy statement and prior to the vote taken with respect to aproposed business combination at a meeting held for that purpose, butthe request will not be granted unless the stockholder votes againstthe business combination and the business combination is approved andcompleted. Any request for conversion, once made, may be withdrawn atany time up to the date of the meeting. It is anticipated that thefunds to be distributed to stockholders entitled to convert theirshares who elect conversion will be distributed promptly aftercompletion of a business combination. We will not complete any businesscombination if stockholders owning 20% or more of the IPO Sharesexercise their conversion rights. Holders of IPO Shares who converttheir stock into their share of the trust fund still have the right toexercise any warrants they continue to hold that they purchased as partof the units.

Liquidation if no business combination

Ifwe do not complete a business combination by April 27, 2006, or byOctober 27, 2006 if the extension criteria described below have beensatisfied, we will be dissolved and will distribute to all holders ofIPO Shares, in proportion to the number of IPO Shares held by them, anaggregate sum equal to the amount in the trust fund, inclusive of anyinterest, plus any remaining net assets. The Founders have waived theirrights to participate in any liquidation distribution with respect totheir Founder Shares. There will be no distribution from the trust fundwith respect to our warrants.

If we enter into either a letterof intent, an agreement in principle or a definitive agreement tocomplete a business combination prior to April 27, 2006 but are unableto complete the business combination prior to this date, then we willhave an additional six months in which to complete the businesscombination contemplated by the letter of intent, agreement inprinciple or definitive agreement. If we are unable to do so by October27, 2006, we will then liquidate. Upon notice from us, the trustee ofthe trust fund will commence liquidating the investments constitutingthe trust fund and will turn over the proceeds to our transfer agentfor distribution to our stockholders. We anticipate that ourinstruction to the trustee would be given promptly after the expirationof the applicable time periods.

If we were to expend all of thenet proceeds of our initial public offering, other than the proceedsdeposited in the trust fund, the per-share liquidation price as ofDecember 31, 2004 would have been approximately $5.17. However, theproceeds deposited in the trust fund could become subject to the claimsof our creditors which could be prior to the claims of our publicstockholders. Our directors have agreed that, if we liquidate prior tothe consummation of a business combination, they will be personallyliable to pay debts and obligations to vendors or other entities thatare owed money by us for services rendered or products sold to us, orto any target business, in excess of the net proceeds of our initialpublic offering not held in the trust account.

Competition

In identifying, evaluating and selecting a target business, weexpect to encounter intense competition from other entities having abusiness objective similar to ours. Many of these entities are wellestablished and have extensive experience identifying and effectingbusiness combinations directly or through affiliates. Many of thesecompetitors possess greater technical, human and other resources thanus and our financial resources will be relatively limited whencontrasted with those of many of these competitors. While we believethere are numerous potential target businesses that we could acquire,our ability to compete in acquiring certain sizable target businesseswill be limited by our available financial resources. This inherentcompetitive limitation gives others an advantage in pursuing theacquisition of a target business.Further:

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|  | •  | ourobligation to seek stockholder approval of a business combination maydelay the completion of a transaction; |

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|  | •  | ourobligation to convert into cash shares of common stock held by ourpublic stockholders in certain instances may reduce the resourcesavailable to us for a business combination; and |

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|  | •  | our outstanding warrantsand options, and the future dilution they potentially represent, maynot be viewed favorably by certain target businesses. |

Any ofthese factors may place us at a competitive disadvantage insuccessfully negotiating a business combination. Our managementbelieves, however, that our status as a public entity and potentialaccess to the United States public equity markets may give us acompetitive advantage over privately-held entities having a similarbusiness objective as us in acquiring a target business withsignificant growth potential on favorable terms.

If we succeedin effecting a business combination, there will be, in all likelihood,intense competition from competitors of the target business. We cannotassure you that, subsequent to a business combination, we will have theresources or ability to compete effectively.

Employees

Laurence S. Levy, our chairman of the board and chief executiveofficer, is our only executive officer. Mr. Levy is not obligated tocontribute any specific number of hours to our matters and intends todevote only as much time as he deems necessary to our affairs. Theamount of time they devote in any time period will vary based on theavailability of suitable target businesses to investigate. We do notintend to have any full time employees prior to the consummation of abusiness combination.

Risks associated with ourbusiness

In addition to other information included in thisreport, the following factors should be considered in evaluating ourbusiness and future prospects.

We are adevelopment stage company with no operating history and very limitedresources.

We are a recently incorporated development stagecompany with no operating results to date. Since we do not have anoperating history, you will have no basis upon which to evaluate ourability to achieve our business objective, which is to acquire anoperating business. We will not generate any revenues until, at theearliest, after the consummation of a business combination.

If third parties bring claims against us, theproceeds held in trust could be reduced and the per-share liquidationprice received by stockholders will be less than $5.17 per share.

Our placing of funds in trust may not protect those funds from thirdparty claims against us. The proceeds held in trust could be subject toclaims which could take priority over the claims of our publicstockholders. We cannot assure you that the per-share liquidation pricewill not be less than the $5.17 per share held in trust as of December31, 2004 due to claims of creditors. If we liquidate before thecompletion of a business combination, our directors will be personallyliable under certain circumstances to ensure that the proceeds in thetrust fund are not reduced by the claims of various vendors or otherentities that are owed money by us for services rendered or productssold to us. However, we cannot assure you that they will be able tosatisfy those obligations.

Since we havenot currently selected a particular target industry or target businesswith which to complete a business combination, we are unable tocurrently ascertain the merits or risks of the business'operations.

Since we have not yet identified a particularindustry or prospective target business, there is no basis forinvestors to evaluate the possible merits or risks of the particularindustry in which we may ultimately operate or the target businesswhich we may ultimately acquire. To the extent we complete a businesscombination with a financially unstable company or an entity in itsdevelopment stage, we may be affected by numerous risks inherent in thebusiness operations of those entities. Although our management willendeavor to evaluate the risks inherent in a particular industry ortarget business, we 

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cannot assure you that we will properlyascertain or assess all of the significant risk factors. We also cannotassure you that an investment in our securities will not ultimatelyprove to be less favorable than a direct investment, if an opportunitywere available, in a target business.

Wemay issue shares of our common stock and preferred stock to complete abusiness combination, which would reduce the equity interest of ourstockholders and likely cause a change in control of ourownership.

Our certificate of incorporation authorizes theissuance of up to 20,000,000 shares of common stock, par value $.0001per share, and 1,000,000 shares of preferred stock, par value $.0001per share. We currently have 4,300,000 authorized but unissued sharesof our common stock available for issuance (after appropriatereservation for the issuance of shares upon full exercise of ouroutstanding warrants and options) and all of the 1,000,000 shares ofpreferred stock available for issuance. Although we currently have nocommitments to issue our securities, we will, in all likelihood, issuea substantial number of additional shares of our common stock orpreferred stock, or a combination of common and preferred stock, tocomplete a business combination. The issuance of additional shares ofour common stock or any number of shares of our preferredstock:

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|  | •  | maysignificantly reduce the equity interest ofstockholders; |

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|  | •  | willlikely cause a change in control if a substantial number of our sharesof common stock are issued, which may affect, among other things, ourability to use our net operating loss carry forwards, if any, and mostlikely also result in the resignation or removal of our presentofficers and directors;and |

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|  | •  | may adverselyaffect prevailing market prices for our common stock. |

Similarly, if we issue debt securities, it could resultin:

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|  | •  | default andforeclosure on our assets if our operating revenues after a businesscombination were insufficient to pay our debtobligations; |

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|  | •  | accelerationof our obligations to repay the indebtedness even if we have made allprincipal and interest payments when due if the debt security containscovenants that require the maintenance of certain financial ratios orreserves and any such covenant is breached without a waiver orrenegotiation of thatcovenant; |

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|  | •  | ourimmediate payment of all principal and accrued interest, if any, if thedebt security is payable on demand;and |

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|  | •  | our inability toobtain additional financing, if necessary, if the debt securitycontains covenants restricting our ability to obtain additionalfinancing while such security is outstanding. |

It is likely that our current officers anddirectors will resign upon consummation of a business combination andwe will have only limited ability to evaluate the management of thetarget business.

Our ability to successfully effect a businesscombination will be totally dependent upon the efforts of our keypersonnel. The future role of our key personnel in the target business,however, cannot presently be ascertained. Although it is possible thatsome of our key personnel will remain associated in various capacitieswith the target business following a business combination, it is likelythat the management of the target business at the time of the businesscombination will remain in place. Although we intend to closelyscrutinize the management of a prospective target business inconnection with evaluating the desirability of effecting a businesscombination, we cannot assure you that our assessment of managementwill prove to be correct.

Our officers anddirectors may allocate their time to other businesses thereby causingconflicts of interest in their determination as to how much time todevote to our affairs. This could have a negative impact on our abilityto consummate a business combination.

Our officers anddirectors are not required to commit their full time to our affairs,which may result in a conflict of interest in allocating their timebetween our operations and other businesses. We 

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do not intend to have any full time employeesprior to the consummation of a business combination. Laurence S. Levy,our sole executive officer, is engaged in several other businessendeavors and is not obligated to contribute any specific number ofhours per week to our affairs. If Mr. Levy's other businessaffairs require him to devote more substantial amounts of time to suchaffairs, it could limit his ability to devote time to our affairs andcould have a negative impact on our ability to consummate a businesscombination.

Some of our officers anddirectors are now, and may in the future become, affiliated withentities engaged in business activities similar to those intended to beconducted by us and, accordingly, may have conflicts of interest indetermining which entity a particular business opportunity should bepresented to.

Some of our officers and directors are now, andmay in the future become, affiliated with entities, including other"blank check" companies, engaged in businessactivities similar to those intended to be conducted by us.Additionally, our officers and directors may become aware of businessopportunities which may be appropriate for presentation to us as wellas the other entities with which they are or may be affiliated. Each ofLaurence S. Levy, our chairman of the board and chief executiveofficer, and Isaac Kier, one of our directors, has contractualobligations that require them to present appropriate businessopportunities to other entities prior to presenting them to us for ourconsideration. Additionally, due to our officers and directors existingaffiliations with other entities, they may have fiduciary obligationsto present potential business opportunities to those entities inaddition to presenting them to us which could cause additionalconflicts of interest. Accordingly, they may have conflicts of interestin determining to which entity a particular business opportunity shouldbe presented. For example, Mr. Levy has a pre-existing contractual andfiduciary obligation to Ozburn-Hessey Logistics, LLC, of which he is adirector and consultant. Mr. Levy's contractual obligationsinclude limiting his ability to present to us potential businesscombination partners in certain industries that we intend to focus on.Mr. Kier has a pre-existing contractual and fiduciary obligation toTremisis Energy Acquisition Corporation, a blank check company similarto us, seeking to acquire an operating business in either the energy orenvironmental industries and their related infrastructures, as he isthe secretary, treasurer and a member of the board of directors ofTremisis.

All of our officers anddirectors own shares of our common stock which will not participate inliquidation distributions and therefore they may have a conflict ofinterest in determining whether a particular target business isappropriate for a business combination.

All of our officers anddirectors own stock in our company, but have waived their right toreceive distributions upon our liquidation. The shares and warrantsowned by our directors and officers will be worthless if we do notconsummate a business combination. The personal and financial interestsof our directors and officers may influence their motivation inidentifying and selecting a target business and completing a businesscombination timely. Consequently, our directors' andofficers' discretion in identifying and selecting a suitabletarget business may result in a conflict of interest when determiningwhether the terms, conditions and timing of a particular businesscombination are appropriate and in our stockholders' bestinterest.

It is probable that we will onlybe able to complete one business combination, which will cause us to besolely dependent on a single business and a limited number of productsor services.

As of December 31, 2004, we had $23,804,261 ondeposit in a trust fund that we may use to complete a businesscombination. Our initial business combination must be with a businesswith a fair market value of at least 80% of our net assets atthe time of such acquisition. Consequently, it is probable that we willconsummate a business combination with a single operating business.Accordingly, the prospects for our success may be:

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|  | •  | solely dependent uponthe performance of a single business,or |

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|  | •  | dependent upon thedevelopment or market acceptance of a single or limited number ofproducts, processes or services. |

In this case, we will not beable to diversify our operations or benefit from the possible spreadingof risks or offsetting of losses, unlike other entities which may havethe resources to complete several business combinations in differentindustries or different areas of a single industry.

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Because of ourlimited resources and the significant competition for businesscombination opportunities, we may not be able to consummate anattractive business combination.

We expect to encounter intensecompetition from other entities having a business objective similar toours, including venture capital funds, leveraged buyout funds andoperating businesses competing for acquisitions. Many of these entitiesare well established and have extensive experience in identifying andeffecting business combinations directly or through affiliates. Many ofthese competitors possess greater technical, human and other resourcesthan we do and our financial resources will be relatively limited whencontrasted with those of many of these competitors. While we believethat there are numerous potential target businesses that we couldacquire, our ability to compete in acquiring certain sizable targetbusinesses will be limited by our available financial resources. Thisinherent competitive limitation gives others an advantage in pursuingthe acquisition of certain target businesses. Further, the obligationwe have to seek stockholder approval of a business combination maydelay the consummation of a transaction, and our obligation to convertinto cash the shares of common stock held by public stockholders incertain instances may reduce the resources available for a businesscombination. Additionally, our outstanding warrants, and the futuredilution they potentially represent, may not be viewed favorably bycertain target businesses. Any of these obligations may place us at acompetitive disadvantage in successfully negotiating a businesscombination.

We may be unable to obtainadditional financing, if required, to complete a business combinationor to fund the operations and growth of the target business, whichcould compel us to restructure the transaction or abandon a particularbusiness combination.

Although we believe our current assetswill be sufficient to allow us to consummate a business combination, inas much as we have not yet identified any prospective target business,we cannot ascertain the capital requirements for any particulartransaction. If we require further funds, either because of the size ofthe business combination or the depletion of our available cash insearch of a target business, or because we become obligated to convertinto cash a significant number of shares from dissenting stockholders,we will be required to seek additional financing. We cannot assure youthat such financing would be available on acceptable terms, if at all.To the extent that additional financing proves to be unavailable whenneeded to consummate a particular business combination, we would becompelled to restructure the transaction or abandon that particularbusiness combination and seek an alternative target business candidate.In addition, if we consummate a business combination, we may requireadditional financing to fund the operations or growth of the targetbusiness. The failure to secure additional financing could have amaterial adverse effect on the continued development or growth of thetarget business. None of our officers, directors or stockholders isrequired to provide any financing to us in connection with or after abusiness combination.

Our existingstockholders, including our officers and directors, control asubstantial interest in us and thus may influence certain actionsrequiring stockholder vote.

Our board of directors is dividedinto three classes, each of which will generally serve for a term oftwo years with only one class of directors being elected in each year.It is unlikely that there will be an annual meeting of stockholders toelect new directors prior to the consummation of a businesscombination, in which case all of the current directors will continuein office at least until the consummation of the business combination.If there is an annual meeting, as a consequence of our"staggered" board of directors, only aminority of the board of directors will be considered for election andour existing stockholders, because of their ownership position, willhave considerable influence regarding the outcome. Accordingly, ourexisting stockholders will continue to exert control at least until theconsummation of a business combination.

Our outstanding warrants may have an adverseeffect on the market price of common stock and make it more difficultto effect a business combination.

We currently have outstandingwarrants to purchase 9,200,000 shares of common stock and an option topurchase 300,000 shares of common stock and warrants to purchase anadditional 600,000 

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shares of common stock. To the extent we issueshares of common stock to effect a business combination, the potentialfor the issuance of substantial numbers of additional shares uponexercise of these warrants and options could make us a less attractiveacquisition vehicle in the eyes of a target business as suchsecurities, when exercised, will increase the number of issued andoutstanding shares of our common stock and reduce the value of theshares issued to complete the business combination. Accordingly, ourwarrants and options may make it more difficult to effectuate abusiness combination or increase the cost of the target business.Additionally, the sale, or even the possibility of sale, of the sharesunderlying the warrants and options could have an adverse effect on themarket price for our securities or on our ability to obtain futurepublic financing. If and to the extent these warrants and options areexercised, you may experience dilution to your holdings.

If we are unable to effect a businesscombination and are forced to liquidate, our warrants will expireworthless.

If we do not complete a business combination byApril 27, 2006, or by October 27, 2006 if certain criteria have beensatisfied, we will be dissolved and will distribute to all holders ofIPO Shares, in proportion to the number of IPO Shares held by them, anaggregate sum equal to the amount in the trust fund, inclusive of anyinterest, plus any remaining net assets. In such event, there will beno distribution with respect to our outstanding warrants. Accordingly,the warrants will expire worthless.

If ourFounders exercise their registration rights, it may have an adverseeffect on the market price our common stock and the existence of theserights may make it more difficult to effect a businesscombination.

Our Founders are entitled to demand that weregister the resale of their shares of common stock at any time afterthe date on which their shares are released from escrow. If ourFounders exercise their registration rights with respect to all oftheir shares of common stock, then there will be an additional1,000,000 shares of common stock eligible for trading in the publicmarket. The presence of this additional number of shares of commonstock eligible for trading in the public market may have an adverseeffect on the market price of our common stock. In addition, theexistence of these rights may make it more difficult to effectuate abusiness combination or increase the cost of the target business, asthe stockholders of the target business may be discouraged fromentering into a business combination with us or will request a higherprice for their securities as a result of these registration rights andthe potential future effect their exercise may have on the tradingmarket for our common stock.

Oursecurities are quoted on the OTC Bulletin Board, which limits theliquidity and price of our securities. 

Our securities aretraded on the OTC Bulletin Board, an NASD-sponsored and operatedinter-dealer automated quotation system for equity securities notincluded on The Nasdaq Stock Market. Quotation of our securities on theOTC Bulletin Board limits the liquidity and price of our securitiesmore than if our securities were quoted or listed on The Nasdaq StockMarket or a national exchange.

If we aredeemed to be an investment company, we may be required to instituteburdensome compliance requirements and our activities may berestricted, which may make it difficult for us to complete a businesscombination.

If we are deemed to be an investment company underthe Investment Company Act of 1940, our activities may be restricted,including:

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|  | •  | restrictionson the nature of our investments;and |

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|  | •  | restrictions onthe issuance of securities, |

which may make it difficult for usto complete a business combination.

In addition, we may haveimposed upon us burdensome requirements,including:

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|  | •  | registrationas an investment company;' |

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|  | •  | adoptionof a specific form of corporate structure;and |

|  |              |                                                                                                     |
|--|--------------|-----------------------------------------------------------------------------------------------------|
|  | •  | reporting, recordkeeping, voting, proxy and disclosure requirements and other rules andregulations. |

We do not believe that our anticipated principalactivities will subject us to the Investment Company Act of 1940. Tothis end, the proceeds held in trust may only be invested by the trustagent in "government securities" withspecific maturity dates. By restricting the investment of the proceedsto these instruments, we intend to meet the requirements for theexemption provided in Rule 3a-1 promulgated under the InvestmentCompany Act of 1940. If we were deemed to be subject to the act,compliance with these additional regulatory burdens would requireadditional expense that we have not allotted for.

|              |                         |
|--------------|-------------------------|
| ITEM2.  | DESCRIPTION OF PROPERTY |

We maintain ourexecutive offices at 450 Park Avenue, 10th Floor, New York,New York 10022 pursuant to an agreement with ProChannel Management LLC,an affiliate of Laurence S. Levy, our chairman of the board and chiefexecutive officer. We pay ProChannel Management a monthly fee of $7,500which is for general and administrative services including officespace, utilities and secretarial support. We believe, based on rentsand fees for similar services in the New York City metropolitan area,that the fee charged by ProChannel Management is at least as favorableas we could have obtained from an unaffiliated person. We consider ourcurrent office space adequate for our current operations.

|              |                   |
|--------------|-------------------|
| ITEM3.  | LEGAL PROCEEDINGS |

None.

|              |                                                    |
|--------------|----------------------------------------------------|
| ITEM4.  | SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS |

None.

9

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PART II

ITEM 5.    MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDERMATTERS

Market Information

Our units, commonstock and warrants are traded on the Over-the-Counter Bulletin Boardunder the symbols RAQCU, RAQC and RAQCW, respectively. The followingtable sets forth the range of high and low closing bid prices for theunits, common stock and warrants for the periods indicated since theunits commenced public trading on October 28, 2004 and since the commonstock and warrants commenced public trading on November 10, 2004. Theover-the-counter market quotations reflect inter-dealer prices, withoutretail mark-up, mark-down or commission and may not necessarily reflectactual transactions.

|               |  |        |      |             |  |          |      |        |  |        |      |        |  |        |      |        |  |        |      |        |  |        |      |        |  |  |
|---------------|--|--------|------|-------------|--|----------|------|--------|--|--------|------|--------|--|--------|------|--------|--|--------|------|--------|--|--------|------|--------|--|--|
|          |  | Units  |      | CommonStock |  | Warrants |
|          |  | High   |      | Low         |  | High     |      | Low    |  | High   |      | Low    |
| 2005:         |  |
| FirstQuarter* |  |   | 7.36 |        |  |     | 6.50 |   |  |   | 5.70 |   |  |   | 5.07 |   |  |   | 1.03 |   |  |   | 0.69 |   |
| 2004:         |  |
| FourthQuarter |  |   | 6.70 |        |  |     | 5.95 |   |  |   | 5.50 |   |  |   | 4.50 |   |  |   | 0.85 |   |  |   | 0.60 |   |
|               |

|  |                         |
|--|-------------------------|
|  | *Through March 24, 2005 |

Holders

As of March 30,2005, there was one holder of record of our units, five holders ofrecord of our common stock and one holder of record of ourwarrants.

Dividends

We have not paid any dividends onour common stock to date and do not intend to pay dividends prior tothe completion of a business combination. The payment of dividends inthe future will be contingent upon our revenues and earnings, if any,capital requirements and general financial condition subsequent tocompletion of a business combination. The payment of any dividendssubsequent to a business combination will be within the discretion ofour then board of directors. It is the present intention of our boardof directors to retain all earnings, if any, for use in our businessoperations and, accordingly, our board does not anticipate declaringany dividends in the foreseeable future.

Recent Sales ofUnregistered Securities and Use of Proceeds

In June 2004, wesold the following shares of common stock without registration underthe Securities Act of 1933, asamended:

|                                       |  |                 |         |        |  |  |
|---------------------------------------|--|-----------------|---------|--------|--|--|
| Stockholders                          |  | Numberof Shares |
| Laurence S.Levy                       |  |            | 395,000 |   |
| NatalieLynn Levy IrrevocableTrust     |  |            | 100,000 |   |
| MichaelBenjamin Levy IrrevocableTrust |  |            | 100,000 |   |
| JessicaRose Levy IrrevocableTrust     |  |            | 100,000 |   |
| IsaacKier                             |  |            | 87,500  |   |
| FalconPartners Holdings,LLC           |  |            | 87,500  |   |
| JaneLevy                              |  |            | 5,000   |   |
|                                       |

10

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Such shares were issued in connection withour organization pursuant to the exemption from registration containedin Section 4(2) of the Securities Act as they were sold tosophisticated, wealthy individuals or entities. The shares issued tothe individuals and entities above were sold at a purchase price ofapproximately $0.029 per share. Each of Laurence S. Levy, the NatalieLynn Levy Irrevocable Trust, Michael Benjamin Levy Irrevocable Trustand Jessica Rose Levy Irrevocable Trust subsequently transferred theirshares to Rand Management LLC, an entity of which the sole member isthe Laurence Levy Irrevocable Trust, a trust established for thebenefit of Laurence Levy's three minor children. In October 2004,our board of directors authorized a stock dividend of 0.1428571 sharesof common stock for each outstanding share of common stock, effectivelylowering the purchase price to approximately $0.025 per share.

Initial Public Offering

On November 2, 2004, we closed ourinitial public offering of 4,000,000 units with each unit consisting ofone share of our common stock and two warrants, each to purchase oneshare of our common stock at an exercise price of $5.00 per share. Theunits were sold at an offering price of $6.00 per unit, generatinggross proceeds of $24,000,000. On November 3, 2004, we sold anadditional 600,000 units pursuant to the underwriters'over-allotment option raising additional gross proceeds of $3,600,000.The managing underwriter in the offering was EarlyBirdCapital, Inc. Thesecurities sold in the offering were registered under the SecuritiesAct of 1933 on a registration statement on Form S-1 (No. 333-117051).The Securities and Exchange Commission declared the registrationstatement effective on October 27, 2004.

We paid a total of$2,070,000 in underwriting discounts and commissions and approximately$925,000 for other costs and expenses related to the offering,including $480,000 for the underwriters' non-accountable expenseallowance of 2% of the gross proceeds. After deducting theunderwriting discounts and commissions and the other offering expenses,the total net proceeds to us from the offering were approximately$24,605,000, of which $23,736,000 was deposited into a trust fund andthe remaining proceeds ($869,000) became available to be used toprovide for business, legal and accounting due diligence on prospectivebusiness combinations and continuing general and administrativeexpenses. The net proceeds deposited into the trust fund remain ondeposit in the trust fund and have earned $68,261 in interest throughDecember 31, 2004.

ITEM 6.    MANAGEMENT'S DISCUSSIONAND ANALYSIS OR PLAN OF OPERATION

We were formed on June 2,2004 to serve as a vehicle to effect a merger, capital stock exchange,asset acquisition or other similar business combination with anoperating business. We intend to utilize cash derived from the proceedsof our recently completed public offering, our capital stock, debt or acombination of cash, capital stock and debt, in effecting a businesscombination.

We consummated our initial public offering onNovember 2, 2004. All activity from June 2, 2004 through November 2,2004 related to our formation and our initial public offering.

Net loss of $25,175 for the fiscal year ended December 31, 2004consisted $34,357 for franchise and capital-based taxes, $16,293 forprofessional fees, $16,209 for rent and office, $9,500 for officerliability insurance and $5,384 for other formation and operatingexpenses. Interest income on the trust fund investment for the fiscalyear ended December 31, 2004 was $56,568

$23,736,000 of the netproceeds of our initial public offering are in trust, with theremaining net proceeds of $869,000 to pay for business, legal andaccounting due diligence on prospective acquisitions and continuinggeneral and administrative expenses. We will use substantially all ofthe net proceeds of our initial public offering not held in trust toidentify and evaluate prospective acquisition candidates, select thetarget business, and structure, negotiate and consummate the businesscombination. We intend to utilize our cash, including the funds held inthe trust fund, capital stock, debt or a combination of the foregoingto effect a business combination. To the extent that our capital stockor debt securities are used in whole or in part as consideration toeffect a business combination, the proceeds held in the trust fund aswell as any other available cash will be used to 

11

----

finance the operations of the targetbusiness. At December 31, 2004, we had cash of $802,667, prepaidexpenses of $57,750 and total liabilities of $60,002. We had workingcapital of $24,604,676 or $800,415, excluding investments held in trustof $23,804,261. We believe that we have sufficient available fundsoutside of the trust fund to operate through October 27, 2006, assumingthat a business combination is not consummated during that time.However, we may need to raise additional funds through a privateoffering of debt or equity securities if such funds are required toconsummate a business combination that is presented to us. We wouldonly consummate such a financing simultaneously with the consummationof a business combination.

We are obligated to pay to ProChannelManagement LLC a monthly fee of $7,500 for general and administrativeservices. In addition, in June 2004, Laurence S. Levy advanced anaggregate of $70,000 to us, on a non-interest bearing basis, forpayment of offering expenses on our behalf. This amount was repaid inNovember 2004 out of proceeds of our initial public offering.

ITEM 7.    FINANCIAL STATEMENTS

This information appearsfollowing Item 14 of this Report and is incorporated herein byreference.

|               |                                                                                     |
|---------------|-------------------------------------------------------------------------------------|
| ITEM 8.  | CHANGES IN ANDDISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIALDISCLOSURE. |

None.

ITEM 8A.    CONTROL ANDPROCEDURES

An evaluation of the effectiveness of our disclosurecontrols and procedures as of December 31, 2004 was made under thesupervision and with the participation of our management, including ourchief executive officer. Based on that evaluation, he concluded thatour disclosure controls and procedures are effective as of the end ofthe period covered by this report to ensure that information requiredto be disclosed by us in reports that we file or submit under theSecurities Exchange Act of 1934 is recorded, processed, summarized andreported within the time periods specified in Securities and ExchangeCommission rules and forms. Since our inception through December 31,2004, there were no significant changes in our internal controls overfinancial reporting that has materially affected, or is reasonablylikely to materially affect our internal controls over financialreporting.

ITEM 8B.    OTHER INFORMATION

None.

12

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PART III

|               |                                                                                                                |
|---------------|----------------------------------------------------------------------------------------------------------------|
| ITEM 9.  | DIRECTORS, EXECUTIVE OFFICERS, PROMOTERSAND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGEACT. |

Directors and Executive Officers

Our currentdirectors and executive officers are asfollows:

|                |  |        |        |          |  |                                                 |  |  |  |  |
|----------------|--|--------|--------|----------|--|-------------------------------------------------|--|--|--|--|
| Name           |  | Age    |        | Position |
| LaurenceS.Levy |  |   | 48     |     |  | Chairmanof the Board and Chief ExecutiveOfficer |
|           |  |   |   |     |  |                                            |
| IsaacKier      |  |   | 51     |     |  | Director                                        |
|           |  |   |   |     |  |                                            |
| SandeepD.Alva  |  |   | 43     |     |  | Director                                        |
|                |

**LaurenceS. Levy** has been our chairman of the board and chief executiveofficer since our inception. In June 1986, Mr. Levy co-founded HydePark Holdings, Inc., a private investment firm specializing inleveraged buyouts, and has been its chairman of the board since thatdate. In March 1991, Mr. Levy acquired Warehouse Associates L.P., aprivate logistics provider, and has served as its chairman of the boardsince that time. In April 1999, Mr. Levy and John Hancock Financialestablished PFI Resource Management LP and Mr. Levy has served as itsmanager since that date. PFI Resource Management is an investor in thePrivate Funding Initiative program in the United Kingdom which isprivatizing state infrastructure assets. In October 1999, Mr. Levy,together with DLJ Real Estate Capital Partners II, formed a predecessorof Ozburn-Hessey Logistics, LLC. Since that time, Mr. Levy has servedas a director of, and consultant to, Ozburn-Hessey Logistics, which isan independent logistics company. In January 2000, Mr. Levy, inpartnership with John Hancock Financial, acquired Derby Industries LLC,a leading sub-assembler to the appliance industry. Since that time, Mr.Levy has served as chairman of the board of Derby Industries LLC. SinceOctober 2002, Mr. Levy has been the chairman of the board, chiefexecutive officer and president of Regency Affiliates Inc., an OTCBulletin Board-listed holding company that holds interests in realestate, a power station and other assets. In December 2002, Mr. Levy,in partnership with Macquarie Bank, acquired Parking Company of AmericaAirports LLC, an off-airport parking company. Since that time, Mr. Levyhas served as a director of Parking Company of America Airports. FromAugust 1991 until May 1999, Mr. Levy was chief executive officer ofHigh Voltage Engineering Corporation, a diversified industrial andmanufacturing company, and from March 1988 until January 2003 served asa member of its board of directors. Mr. Levy received a Bachelor ofCommerce degree and a Bachelor of Accountancy degree from theUniversity of Witwatersrand in Johannesburg, South Africa, and anM.B.A. from Harvard University where he graduated as a Baker Scholar.He is also a Chartered Accountant (South Africa).

**IsaacKier** has been a member of our board of directors since ourinception. Since February 2000, Mr. Kier has served as a generalpartner of Coqui Capital Partners L.P., a venture capital firm, whichinvests primarily in early stage companies. Since October 1997, he hasbeen a principal and managing partner of First Americas Partners, LLC,an investment partnership focusing on investments in North and SouthAmerica. Since February 2004, he has also been the secretary andtreasurer and a member of the board of directors of Tremisis EnergyAcquisition Corporation, an OTC Bulletin Board-listed company formedfor the purpose of acquiring an operating business in either the energyor environmental industry and their related infrastructures. SinceOctober 2004, Mr. Kier has served as a member of the board of directorsof Hana Biosciences Inc., an Over The Counter Bulletin Board listedbiopharmaceutical company that aims to acquire, develop andcommercialize innovative products for the treatment of important unmetmedical needs in cancer and immunological diseases. From 1987 to 1997,he served as the managing partner of the Alabama 8 Market, anon-wireline cellular licensee. From 1982 until its sale in 1995, Mr.Kier served as the chairman of the board and chief executive officer ofLida, Inc., a Nasdaq-listed company engaged in textile production andprinting. Mr. Kier received a B.A. in Economics from Cornell Universityand a J.D. from George Washington University Law School.

13

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**Sandeep D. Alva** has been a memberof our board of directors since our inception. In July 2000, Mr. Alvafounded Falcon Investment Advisors, LLC, a private equity investmentfirm providing subordinated debt and equity capital to middle marketcompanies, and has been its managing director since its formation. FromMarch 1991 to July 2000, Mr. Alva served as senior managing directorand Mezzanine and Private Equity Team Leader of the John Hancock Bond& Corporate Finance Group, an affiliate of John Hancock FinancialServices, Inc. Prior to that, he was a principal at Joseph, Littlejohn& Levy, a private equity investment firm, from December 1989 toMarch 1991. Mr. Alva received a Bachelor of Commerce degree from BombayUniversity, India, and an M.B.A. from Cornell University.

Ourboard of directors is divided into three classes with only one class ofdirectors being elected in each year and each class serving athree-year term. The term of office of the first class of directors,consisting of Sandeep D. Alva, will expire at our first annual meetingof stockholders. The term of office of the second class of directors,consisting of Isaac Kier, will expire at the second annual meeting. Theterm of office of the third class of directors, consisting of LaurenceS. Levy, will expire at the third annual meeting. These individualswill play a key role in identifying and evaluating prospectiveacquisition candidates, selecting the target business, and structuring,negotiating and consummating its acquisition.

SpecialAdvisor

**Edward Levy** has been a managing director of CIBCWorld Markets Corp. since August 1995, and co-head of CIBC WorldMarkets Corp's Leveraged Finance Group since June 2001. Mr. Levyis on the CIBC World Markets Executive Management Committee. FromFebruary 1990 to August 1995, Mr. Levy was a managing director ofArgosy Group L.P., a private investment banking firm. Mr. Levy has beena member of the board of managers of Norcross Safety Products LLC, areporting company under the Securities Exchange Act of 1934 engaged inthe design, manufacture and marketing of branded products in thefragmented personal protection equipment industry, since June 1998.Since July 1999, he has also been a director of Booth Creek SkiHoldings, Inc., a reporting company under the Securities Exchange Actof 1934 that owns and operates six ski resort complexes encompassingnine separate resorts. Mr. Levy received a B.A. from ConnecticutCollege. Mr. Levy is not related to Laurence S. Levy, our chairman andchief executive officer.

Section 16(a) Beneficial OwnershipReporting Compliance

Section 16(a) of the Securities ExchangeAct of 1934 requires our officers, directors and persons who own morethan ten percent of a registered class of our equity securities to filereports of ownership and changes in ownership with the Securities andExchange Commission. Officers, directors and ten percent stockholdersare required by regulation to furnish us with copies of all Section16(a) forms they file. Based solely on copies of such forms received orwritten representations from certain reporting persons that no Form 5swere required for those persons, we believe that, during the fiscalyear ended December 31, 2004, all filing requirements applicable to ourofficers, directors and greater than ten percent beneficial owners werecomplied with, except that Laurence S. Levy filed one Form 4 latedisclosing 12 transactions and Isaac Kier filed two Form 4s latedisclosing a total of 11 transactions. Each of these late filings wereto report the purchase of warrants by such individuals in order tosatisfy the obligations of our directors pursuant to a contractualobligation between them and EarlyBirdCapital, Inc., the representativeof the underwriters in our initial public offering, to purchase up to1,000,000 warrants following our initial public offering.

Codeof Ethics

In November 2004, our board of directors adopted acode of ethics that applies to our directors, officers and employees aswell as those of our subsidiaries. Requests for copies of our code ofethics should be sent in writing to Rand Acquisition Corporation, 450Park Avenue, 10th Floor, New York, New York 10022.

ITEM 10.    EXECUTIVE COMPENSATION

Commencing October 27,2004 and ending upon the acquisition of a target business, we will payProChannel Management, an affiliate of Laurence S. Levy, a fee of$7,500 per month for providing us 

14

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with office space and certain office andsecretarial services. Other than this $7,500 per-month fee, nocompensation of any kind, including finders and consulting fees, willbe paid to any of our Founders or any of their respective affiliates,for services rendered prior to or in connection with a businesscombination. However, our Founders will be reimbursed for anyout-of-pocket expenses incurred in connection with activities on ourbehalf such as identifying potential target businesses and performingdue diligence on suitable business combinations.

Since ourformation, we have not granted any stock options or stock appreciationrights or any awards under long-term incentive plans.

|                |                                                               |
|----------------|---------------------------------------------------------------|
| ITEM 11.  | SECURITY OWNERSHIP OF CERTAINBENEFICIAL OWNERS AND MANAGEMENT |

The following table sets forthinformation regarding the beneficial ownership of our common stock asof March 30, 2005by:

|  |              |                                                                                                            |
|--|--------------|------------------------------------------------------------------------------------------------------------|
|  | •  | each person knownby us to be the beneficial owner of more than 5% of ouroutstanding shares of commonstock; |

|  |              |                                        |
|--|--------------|----------------------------------------|
|  | •  | each of ourofficers and directors; and |

|  |              |                                           |
|--|--------------|-------------------------------------------|
|  | •  | all our officers anddirectors as a group. |

Unless otherwise indicated, we believethat all persons named in the table have sole voting and investmentpower with respect to all shares of common stock beneficially owned bythem.

|                                                               |  |                                          |           |                 |  |        |        |         |  |  |
|---------------------------------------------------------------|--|------------------------------------------|-----------|-----------------|--|--------|--------|---------|--|--|
| Nameand Address of BeneficialOwner(1)                         |  | Amount and Natureof Beneficial Ownership |           | Percent ofClass |
|                                                          |  |                                     |      |            |  |   |   |    |
| JaneLevy(2)                                                   |  |                                     | 800,000   | (3)        |  |   | 14.3   | %  |
| LaurenceS.Levy                                                |  |                                     | 794,286   | (4)        |  |   | 14.2   | %  |
| RandManagementLLC                                             |  |                                     | 794,286   | (4)        |  |   | 14.2   | %  |
| DavidM.Knott(5)                                               |  |                                     | 752,000   | (6)        |  |   | 13.4   | %  |
| HummingbirdManagement,LLC(7)                                  |  |                                     | 400,000   | (8)        |  |   | 7.1    | %  |
| IsaacKier(9)                                                  |  |                                     | 350,000   | (10)       |  |   | 6.3    | %  |
| SandeepD.Alva(11)                                             |  |                                     | 100,000   | (12)       |  |   | 1.8    | %  |
| Alldirectors and executive officers as a group (3individuals) |  |                                     | 1,244,286 | (13)       |  |   | 22.2   | %  |
|                                                               |

|  |
|--|
|  |  |
|  |

|     |                                                                                                                                  |
|-----|----------------------------------------------------------------------------------------------------------------------------------|
| (1) | Unlessotherwise indicated, the business address of each of the following is450 Park Avenue, 10th Floor, New York, New York10022. |

|     |                                                                                                                                  |
|-----|----------------------------------------------------------------------------------------------------------------------------------|
| (2) | The business address ofJane Levy is c/o Crossfields Capital Partners LLC, 4 Columbus Circle,5th Floor, New York, New York 10019. |

|     |                                                                                                                                                                                                                     |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (3) | Represents 5,714 shares of common stockheld by Ms. Levy and 794,286 shares of common stock held by RandManagement LLC of which the sole member is the Laurence LevyIrrevocable Trust, of which Ms. Levy is trustee. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (4) | Represents 794,286 shares of commonstock held by Rand Management LLC of which the sole member is theLaurence Levy Irrevocable Trust, a trust established for the benefit ofMr. Levy's three minor children. Jane Levy, Mr. Levy'ssister, is the trustee for the trust. Does not include 800,000 sharesof common stock issuable upon exercise of warrants held by Mr. Levythat are not currently exercisable and will not become exercisablewithin 60 days. |

|     |                                                                                                 |
|-----|-------------------------------------------------------------------------------------------------|
| (5) | The businessaddress of Mr. Knott is 485 Underhill Boulevard, Suite 205, Syosett,New York 11791. |

15

----

|     |                                                                                                                                                                                                                                                                                 |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (6) | Representsshares of common stock held by Knott Partners, L.P., MatterhornOffshore Limited Fund, Shoshone Partners L.P. and Mr. Knott'sspouse. The foregoing information was derived from a Schedule 13G/Afiled with the Securities and Exchange Commission on February 11,2005. |

|     |                                                                                                             |
|-----|-------------------------------------------------------------------------------------------------------------|
| (7) | The business address ofHummingbird Management, LLC is 460 Park Avenue, 12th Floor,New York, New York 10022. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (8) | Represents shares of common stock heldby The Hummingbird Value Fund, L.P., The Hummingbird Microcap ValueFund, L.P., and to The Hummingbird Concentrated Fund, L.P. Hummingbirdexercises sole investment discretion and voting authority with respectto such shares. Does not include 800,000 shares of common stockissuable upon exercise of warrants held by these entities that are notcurrently exercisable and will not become exercisable within 60 days.The foregoing information was derived from a Schedule 13D filed withthe Securities and Exchange Commission on November 9, 2004 |

|     |                                                                                                                     |
|-----|---------------------------------------------------------------------------------------------------------------------|
| (9) | The business address of Mr. Kier isCoqui Capital Partners, L.P., 1775 Broadway, Suite 604, New York, NewYork 10019. |

|      |                                                                                                                                                                                                                                                                                                               |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (10) | Includes 17,000shares of common stock held by Mr. Kier's wife and 100,000 sharesof common stock held through a family limited partnership. Does notinclude 607,000 shares of common stock issuable upon exercise ofwarrants that are currently not exercisable and will not becomeexercisable within 60 days. |

|      |                                                                                                                      |
|------|----------------------------------------------------------------------------------------------------------------------|
| (11) | The business address of Mr. Alva isFalcon Investment Advisors, LLC, 60 Kendrick Street, Needham,Massachusetts 02494. |

|      |                                                                                            |
|------|--------------------------------------------------------------------------------------------|
| (12) | Theseshares are held by Falcon Partners Holdings, LLC of which Mr. Alva ismanaging member. |

|      |                                                                                                                                                                                                         |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (13) | Does notinclude 1,407,000 shares of common stock issuable upon exercise ofwarrants held by our officers and directors that are not currentlyexercisable and will not become exercisable within 60 days. |

All of the shares of our outstanding common stock owned by ourFounders prior to our initial public offering have been placed inescrow with Continental Stock Transfer & Trust Company, as escrowagent, pursuant to an escrow agreement described below.

LaurenceS. Levy, Jane Levy, Rand Management LLC, Isaac Kier and Falcon PartnersHoldings, LLC may be deemed to be our"parents" and"promoters," as these terms are defined underthe Federal securities laws.

ITEM 12.    CERTAINRELATIONSHIPS AND RELATED TRANSACTIONS

In June 2004, we issued875,000 shares of our common stock to the following individuals for$25,000 in cash, at an average purchase price of approximately $0.029per share as set forth below:

|                                        |  |                               |  |                                                  |  |  |  |  |  |  |
|----------------------------------------|--|-------------------------------|--|--------------------------------------------------|--|--|--|--|--|--|
| Name                                   |  | Numberof Shares               |  | Relationship to Us                               |
| Laurence S.Levy                        |  | 395,000                       |  | Chairmanof the Board and Chief Executive Officer |
| NatalieLynn Levy IrrevocableTrust      |  | 100,000                       |  | Stockholder                                      |
| Michael Benjamin Levy IrrevocableTrust |  | 100,000                       |  | Stockholder                                      |
| JessicaRose Levy IrrevocableTrust      |  | 100,000                       |  | Stockholder                                      |
| IsaacKier                              |  |   87,500            |  | Director                                         |
| FalconPartners Holdings,LLC            |  |   87,500            |  | Director                                         |
| JaneLevy                               |  |     5,000 |  | Stockholder                                      |
|                                        |

16

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Each of Laurence S. Levy, the Natalie LynnLevy Irrevocable Trust, Michael Benjamin Levy Irrevocable Trust andJessica Rose Levy Irrevocable Trust subsequently transferred theirshares to Rand Management LLC, an entity of which the sole member isthe Laurence Levy Irrevocable Trust, a trust established for thebenefit of Laurence Levy's three minor children. In October 2004,our board of directors authorized a stock dividend of 0.1428571 sharesof common stock for each outstanding share of common stock, effectivelylowering the purchase price to approximately $0.025 per share.

Pursuant to an escrow agreement between us, the Founders andContinental Stock Transfer & Trust Company, all of the FoundersShares were placed in escrow, with Continental acting as escrow agent,pursuant to an escrow agreement, until the earliestof:

|              |                   |
|--------------|-------------------|
| •  | October 27, 2007; |

|              |                    |
|--------------|--------------------|
| •  | our liquidation;or |

|              |                                                                                                                                                                                                                                                                                                            |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | the consummation of a liquidation,merger, stock exchange or other similar transaction which results inall of our stockholders having the right to exchange their shares ofcommon stock for cash, securities or other property subsequent to ourconsummating a business combination with a target business. |

During the escrow period, these shares cannot be sold, but theFounders will retain all other rights as stockholders, including,without limitation, the right to vote their shares of common stock andthe right to receive cash dividends, if declared. If dividends aredeclared and payable in shares of common stock, such dividends willalso be placed in escrow. If we are unable to effect a businesscombination and liquidate, none of our Founders will receive anyportion of the liquidation proceeds with respect to common stock ownedby them prior to our initial public offering.

We also enteredinto a registration rights agreement with the Founders pursuant towhich the holders of the majority of the Founders Shares will beentitled to make up to two demands that we register these sharespursuant to an agreement to be signed prior to or on the date of thisprospectus. The holders of the majority of these shares may elect toexercise these registration rights at any time after the date on whichthese shares of common stock are released from escrow. In addition,these stockholders have certain "piggy-back"registration rights on registration statements filed subsequent to thedate on which these shares of common stock are released from escrow. Wewill bear the expenses incurred in connection with the filing of anysuch registration statements.

Each of our Founders also enteredinto a letter agreement with us and EarlyBirdCapital pursuant to which,among other things:

|              |                                                                                                                                                                           |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | each agreed to voteall Founder Shares owned by him in accordance with the majority of theIPO Shares if we solicit approval of our stockholders for a businesscombination; |

|              |                                                                                                                                                                                                                                                     |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | if we fail to consummate abusiness combination by April 27, 2006 (or by October 27, 2006 undercertain limited circumstances), each agreed to take all reasonableactions within his power to cause us to liquidate as soon as reasonablypracticable; |

|              |                                                                                                                                                                           |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | each waived any and allrights he may have to receive any distribution of cash, property orother assets as a result of such liquidation with respect to hisFounder Shares; |

|              |                                                                                                                                                                                                                                                                                                                                                                                       |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | each agreed to presentto us for our consideration, prior to presentation to any other personor entity, any suitable opportunity to acquire an operating business,until the earlier of our consummation of a business combination, ourliquidation or until such time as he ceases to be an officer ordirector of ours, subject to any pre-existing fiduciary obligations hemight have; |

|              |                                                                                                                                                                                                                                                                                                                                             |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | each agreed that we couldnot consummate any business combination which involves a company whichis affiliated with any of the Founders unless we obtain an opinion froman independent investment banking firm reasonably acceptable toEarlyBirdCapital that the business combination is fair to ourstockholders from a financialperspective; |

|              |                                                                                                                                                                                                 |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | each agreed that he and hisaffiliates will not be entitled to receive and will not accept anycompensation for services rendered to us prior to the consummation ofour business combination; and |

17

----

|              |                                                                                                                                                                                            |
|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | each agreed thathe and his affiliates will not be entitled to receive or accept afinder's fee or any other compensation in the event he or hisaffiliates originate a business combination. |

ProChannelManagement LLC, an affiliate of Laurence S. Levy, our chairman of theboard and chief executive officer, has agreed that, through theacquisition of a target business, it will make available to us a smallamount of office space and certain office and secretarial services, aswe may require from time to time. We have agreed to pay ProChannelManagement $7,500 per month for these services.

During 2004,Laurence S. Levy advanced $70,000 to us to cover expenses related toour initial public offering. The loan was payable without interest onthe earlier of June 10, 2005 or the consummation of our initial publicoffering. This loan was repaid in November 2004.

We willreimburse our officers and directors for any reasonable out-of-pocketbusiness expenses incurred by them in connection with certainactivities on our behalf such as identifying and investigating possibletarget businesses and business combinations.

Other than the$7,500 per-month administrative fee and reimbursable out-of-pocketexpenses payable to our officers and directors, no compensation or feesof any kind, including finders and consulting fees, will be paid to anyof our Founders or to any of their respective affiliates for servicesrendered to us prior to or with respect to the businesscombination.

All ongoing and future transactions between us andany of our officers and directors or their respective affiliates, willbe on terms believed by us to be no less favorable than are availablefrom unaffiliated third parties and will require prior approval in eachinstance by a majority of the members of our board who do not have aninterest in the transaction.

ITEM 13.    EXHIBITS, LIST ANDREPORTS ON FORM 8-K

(a) The following Exhibits are filedas part of this report.

|            |  |                                                                                                             |  |  |  |  |
|------------|--|-------------------------------------------------------------------------------------------------------------|--|--|--|--|
| ExhibitNo. |  | Description                                                                                                 |
| 3.1        |  | Certificate of Incorporation. (1)                                                                           |
| 3.2        |  | By-laws. (1)                                                                                                |
| 4.1        |  | Specimen Unit Certificate. (1)                                                                              |
| 4.2        |  | Specimen Common Stock Certificate. (1)                                                                      |
| 4.3        |  | Specimen Warrant Certificate. (1)                                                                           |
| 4.4        |  | Form of Unit Purchase Option granted toEarlyBirdCapital, Inc. (1)                                           |
| 4.5        |  | Form ofWarrant Agreement between Continental Stock Transfer & TrustCompany and the Registrant. (1)      |
| 10.1       |  | LetterAgreement among the Registrant, EarlyBirdCapital, Inc. and Laurence S.Levy (1)                        |
| 10.2       |  | Letter Agreement among theRegistrant, EarlyBirdCapital, Inc. and Isaac Kier (1)                             |
| 10.3       |  | Letter Agreement among the Registrant,EarlyBirdCapital, Inc. and Sandeep D. Alva (1)                        |
| 10.4       |  | Letter Agreement among the Registrant,EarlyBirdCapital, Inc. and Falcon Partners Holdings, LLC (1)          |
| 10.5       |  | Letter Agreement among the Registrant,EarlyBirdCapital, Inc. and Natalie Lynn Levy Irrevocable Trust(1)     |
| 10.6       |  | Letter Agreement among theRegistrant, EarlyBirdCapital, Inc. and Michael Benjamin LevyIrrevocable Trust (1) |
|            |

18

----

|            |  |                                                                                                                                 |  |  |  |  |
|------------|--|---------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|
| ExhibitNo. |  | Description                                                                                                                     |
| 10.7       |  | Letter Agreement amongthe Registrant, EarlyBirdCapital, Inc. and Jessica Rose LevyIrrevocable Trust (1)                         |
| 10.8       |  | Letter Agreementamong the Registrant, EarlyBirdCapital, Inc. and Jane Levy(1)                                                   |
| 10.9       |  | Form of Investment ManagementTrust Agreement between Continental Stock Transfer & Trust Companyand the Registrant. (1)      |
| 10.10      |  | Form of StockEscrow Agreement between the Registrant, Continental Stock Transfer& Trust Company and the Founders. (1)       |
| 10.11      |  | Form of Letter Agreement between ProChannelManagement LLC and Registrant regarding administrative support.(1)                   |
| 10.12      |  | Promissory Note, dated June 10,2004, in the principal amount of $70,000 issued to Laurence S. Levy.(1)                          |
| 10.13      |  | Registration Rights Agreementamong the Registrant and the Founders. (1)                                                         |
| 10.14      |  | Form of Warrant Purchase Agreements among eachof Laurence S. Levy, Isaac Kier and Sandeep D. Alva andEarlyBirdCapital, Inc. (1) |
| 10.15      |  | LetterAgreement among the Registrant, EarlyBirdCapital, Inc. and RandManagement LLC. (1)                                        |
| 14         |  | Code ofEthics.                                                                                                                  |
| 31         |  | Certification of Chief ExecutiveOfficer pursuant to Section 302 of the Sarbanes-Oxley Act of2002.                               |
| 32         |  | Certification of Chief ExecutiveOfficer pursuant to Section 906 of the Sarbanes-Oxley Act of2002.                               |
|            |

|            |                                                                                                          |
|------------|----------------------------------------------------------------------------------------------------------|
| (1)   | Incorporated byreference to the Registrant's Registration Statement on Form S-1(SEC File No.333-117051). |

|           |  |                    |
|-----------|--|--------------------|
| (b)  |  | Reportson Form 8-K |

None during period ended December 31,2004.

ITEM 14.    PRINCIPAL ACCOUNTING FEES ANDSERVICES.

The firm of Goldstein Golub Kessler LLP("GGK") acts as our principal accountant. GGKhas a continuing relationship with American Express Tax and BusinessServices Inc. ("TBS") from which it leasesauditing staff who are full time, permanent employees of TBS andthrough which its partners provide non-audit services. As a result ofthis arrangement, GGK has no full-time employees and therefore, none ofthe audit services performed were provided by permanent full-timeemployees of GGK. GGK manages and supervises the audit and audit staff,and is exclusively responsible for the opinion rendered in connectionwith its examination. The following is a summary of fees paid to GGKand TBS for services rendered.

Audit Fees

During thefiscal year ended December 31, 2004, we paid or expect to pay principalaccountant $25,000 for the services they performed in connection withour initial public offering, including the financial statementsincluded in the Current Report on Form 8-K filed with the Securitiesand Exchange Commission on November 2, 2004; $2,000 in connection withthe review of our Quarterly Reports on Form 10-QSB, and $10,000 inconnection with the December 31, 2004 audit and 10-KSB.

19

----

Audit-Related Fees

During 2004,our principal accountant did not render assurance and related servicesreasonably related to the performance of the audit or review offinancial statements. We have paid or expect to pay approximately$2,000 in connection with the preparation of our tax return for2004.

Tax Fees

During 2004, TBS did not render servicesto us for tax compliance, tax advice and tax planning.

AllOther Fees

During 2004, there were no fees billed for productsand services provided by the principal accountant other than those setforth above.

20

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RandAcquisition Corporation (a corporation in the developmentstage)

|                                                           |  |        |                |        |  |  |
|-----------------------------------------------------------|--|--------|----------------|--------|--|--|
| **Reportof Independent Registered Public AccountingFirm** |  |   | F-2            |   |
| **FinancialStatements**                                   |  |   |           |   |
| BalanceSheet                                              |  |   | F-3            |   |
| Statement ofOperations                                    |  |   | F-4            |   |
| Statement ofStockholders' Equity                          |  |   | F-5            |   |
| Statement of Cash Flows                                   |  |   | F-6            |   |
| **Notes to FinancialStatements**                          |  |   | F-7–F-10 |   |
|                                                           |

F-1

----

Report of Independent Registered PublicAccounting Firm

To the Board ofDirectorsRand Acquisition Corporation

We haveaudited the accompanying balance sheet of Rand Acquisition Corporation(a corporation in the development stage) as of December 31, 2004, andthe related statements of operations, stockholders' equity andcash flows for the period from June 2, 2004 (inception) to December 31,2004. These financial statements are the responsibility of theCompany's management. Our responsibility is to express an opinionon these financial statements based on our audit.

We conductedour audit in accordance with the standards of the Public CompanyAccounting Oversight Board (United States). Those standards requirethat we plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting theamounts and disclosures in the financial statements. An audit alsoincludes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides areasonable basis for our opinion.

In our opinion, the financialstatements referred to above present fairly, in all material respects,the financial position of Rand Acquisition Corporation as of December31, 2004, and the results of its operations and its cash flows for theperiod from June 2, 2004 (inception) to December 31, 2004 in conformitywith United States generally accepted accountingprinciples.

Goldstein Golub Kessler LLPNewYork, New York

February 27,2005

F-2

----

Rand Acquisition Corporation(acorporation in the development stage)

BalanceSheet

|                                                                                              |  |                |            |         |  |  |
|----------------------------------------------------------------------------------------------|--|----------------|------------|---------|--|--|
|                                                                                         |  | December312004 |
| **Assets**                                                                                   |  |           |       |    |
| Currentassets:                                                                               |  |           |       |    |
| Cash and cashequivalents                                                                     |  | $              | 802,667    |    |
| Investmentsheld in Trust Fund (Note 1)                                                       |  |           | 23,804,261 |    |
| Prepaidexpenses                                                                              |  |           | 57,750     |    |
| Totalassets                                                                                  |  | $              | 24,664,678 |    |
| **Liabilities and Stockholders'Equity**                                                      |  |           |       |    |
| Currentliabilities:                                                                          |  |           |       |    |
| Accruedexpenses                                                                              |  | $              | 12,000     |    |
| Taxes Payable                                                                                |  |           | 34,357     |    |
| Deferred Interest                                                                            |  |           | 13,645     |    |
| Notes payable, stockholder (Note 3)                                                          |  |           | 0          |    |
| Total currentliabilities                                                                     |  |           | 60,002     |    |
| Commonstock, subject to possible redemption, 919,540 shares at redemptionvalue (Note1)       |  |           | 4,744,826  |    |
| Commitment(Note3)                                                                            |  |           |       |    |
| Stockholders'equity (Notes 1, 2, 4 and5)                                                     |  |           |       |    |
| Preferred stock, $.0001 parvalue, Authorized 1,000,000 shares; noneissued                    |  |           |       |    |
| Common stock, $.0001 parvalue                                                                |  |           |       |    |
| Authorized 20,000,000shares                                                                  |  |           |       |    |
| Issued and outstanding5,600,000 shares(which includes 919,540 subject to possibleredemption) |  |           | 560        |    |
| Additional paid-incapital                                                                    |  |           | 19,884,465 |    |
| Deficitaccumulated during development stage                                                  |  |           | (25,175    | )  |
| Totalstockholders' equity                                                                    |  |           | 19,859,850 |    |
| Total liabilities andstockholders' equity                                                    |  | $              | 24,664,678 |    |
|                                                                                              |

See accompanyingnotes to financial statements.

F-3

----

Rand Acquisition Corporation(acorporation in the development stage)

Statement ofOperations

|                                     |  |                                                      |           |         |  |  |
|-------------------------------------|--|------------------------------------------------------|-----------|---------|--|--|
|                                |  | PeriodfromJune 2, 2004(inception) toDecember 31,2004 |
| Income:                             |  |                                                 |      |    |
| InterestIncome                      |  | $                                                    | 56,568    |    |
| Expenses:                           |  |                                                 |      |    |
| Franchiseand capital-based taxes    |  |                                                 | 34,357    |    |
| Professional fees                   |  |                                                 | 16,293    |    |
| Rent and office                     |  |                                                 | 16,209    |    |
| Insurance                           |  |                                                 | 9,500     |    |
| Other formation and operatingcosts  |  |                                                 | 5,384     |    |
| TotalExpenses                       |  |                                                 | 81,743    |    |
| Net lossfor the period              |  | $                                                    | (25,175   | )  |
| Net loss per sharebasic and diluted |  | $                                                    | (.01      | )  |
| Weighted average sharesoutstanding  |  |                                                 | 2,584,634 |    |
|                                     |

See accompanyingnotes to financial statements.

F-4

----

Rand Acquisition Corporation(acorporation in the development stage)

Statement ofStockholders'Equity

|                                                                                                                                     |  |             |           |                          |  |                                              |         |        |  |        |            |         |  |        |         |         |  |        |            |         |  |  |
|-------------------------------------------------------------------------------------------------------------------------------------|--|-------------|-----------|--------------------------|--|----------------------------------------------|---------|--------|--|--------|------------|---------|--|--------|---------|---------|--|--------|------------|---------|--|--|
|                                                                                                                                |  | CommonStock |           | AdditionalPaid-InCapital |  | Deficitaccumulatedduring thedevelopmentstage |         | Total  |
|                                                                                                                                |  | Shares      |           | Amount                   |  |
| Sale of 1,000,000 shares of common stock to initialstockholders as of June 2, 2004 at $.025 per share                               |  |        | 1,000,000 |                     |  | $                                            | 100     |   |  | $      | 24,900     |    |  |   | — |    |  | $      | 25,000     |    |
| Sale of 4,000,000units, net of underwriters' discount and offering expenses(includes 799,600 shares subject to possible redemption) |  |        | 4,000,000 |                     |  |                                         | 400     |   |  |   | 21,310,351 |    |  |   | — |    |  |   | 21,310,751 |    |
| Proceedsof exercise of overallotment option by underwriters                                                                         |  |        | 600,000   |                     |  |                                         | 60      |   |  |   | 3,293,940  |    |  |   |    |    |  |   | 3,294,000  |    |
| Proceedssubject to possible redemption of 919,540shares                                                                             |  |        | —   |                     |  |                                         | — |   |  |   | (4,744,826 | )  |  |   | — |    |  |   | (4,744,826 | )  |
| Proceedsfrom issuance ofoption                                                                                                      |  |        | —   |                     |  |                                         | — |   |  |   | 100        |    |  |   | — |    |  |   | 100        |    |
| Netloss for theperiod                                                                                                               |  |        | —   |                     |  |                                         | — |   |  |   | —    |    |  |   | (25,175 | )  |  |   | (25,175    | )  |
| Balance,December 31, 2004                                                                                                           |  |        | 5,600,000 |                     |  | $                                            | 560     |   |  | $      | 19,884,465 |    |  | $      | (25,175 | )  |  | $      | 19,859,850 |    |
|                                                                                                                                     |

See accompanying notes tofinancial statements.

F-5

----

Rand Acquisition Corporation(acorporation in the development stage)

Statement of CashFlows

|                                                                         |  |                                            |             |         |  |  |
|-------------------------------------------------------------------------|--|--------------------------------------------|-------------|---------|--|--|
|                                                                    |  | June2, 2004(inception) toDecember 31, 2004 |
| **Cash Flows from OperatingActivities**                                 |  |                                       |        |    |
| NetLoss                                                                 |  | $                                          | (25,175     | )  |
| Adjustments toreconcile net loss to net cash used in operatingexpenses: |  |                                       |        |    |
| Interest accrued onTreasury Bill                                        |  |                                       | (68,261     | )  |
| Increase inprepaid expenses                                             |  |                                       | (57,750     | )  |
| Increasein accrued expenses                                             |  |                                       | 12,000      |    |
| Increasein income tax payable                                           |  |                                       | 34,357      |    |
| Increase in deferredinterest                                            |  |                                       | 13,645      |    |
| Net cashused in operating activities                                    |  |                                       | (91,184     | )  |
| **Cash Flows from InvestingActivities**                                 |  |                                       |        |    |
| Cash held in TrustFund                                                  |  |                                       | (23,736,000 | )  |
| **Cash Flows from FinancingActivities**                                 |  |                                       |        |    |
| Gross proceeds                                                          |  |                                       | 27,600,000  |    |
| Proceeds from notes payable,stockholder                                 |  |                                       | 70,000      |    |
| Payment of notepayable,stockholder                                      |  |                                       | (70,000     | )  |
| Proceeds fromsale of shares of common stock                             |  |                                       | 25,000      |    |
| Proceeds from issuance ofoption                                         |  |                                       | 100         |    |
| Payment of costs ofpublic offering                                      |  |                                       | (2,995,249  | )  |
| Net cash providedby financingactivities                                 |  |                                       | 24,629,851  |    |
| Net increasein cash and cash at end of period                           |  | $                                          | 802,667     |    |
|                                                                         |

See accompanying notes tofinancial statements.

F-6

----

RandAcquisition Corporation(a corporation in the developmentstage)    Notes to FinancialStatements

|        |                                         |  |                                                                                                                                                                      |
|--------|-----------------------------------------|--|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **1.** | **Organization and BusinessOperations** |  | Rand Acquisition Corporation (the"Company") was incorporated in Delaware onJune 2, 2004 as a blank check company whose objective is to acquire anoperating business. |
|        |                                         |  |

|  |  |                                                                                                                                                                                                                 |
|--|--|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  |  | All activity from June 2, 2004(inception) through December 31, 2004 relates to the Company'sformation and initial public offering described below. The Company hasselected December  31 as its fiscal year-end. |
|  |  |                                                                                                                                                                                                                 |

|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--|--|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  |  | Theregistration statement for the Company's initial public offering("Offering") was declared effective October27, 2004. The Company consummated the offering on November 2, 2004 andreceived net proceeds of approximately $21,311,000 (Note 2). OnNovember 3, 2004, the underwriters exercised their allotment optionresulting in further proceeds to the Company of $3,294,000. TheCompany's management has broad discretion with respect to thespecific application of the net proceeds of this Offering, althoughsubstantially all of the net proceeds of this Offering are intended tobe generally applied toward consummating a business combination with aoperating business ("Business Combination").Furthermore, there is no assurance that the Company will be able tosuccessfully effect a Business Combination. A portion of the netproceeds, originally $23,736,000, was placed in an interest-bearingtrust account ("Trust Fund") until theearlier of (i) the consummation of its first Business Combination or(ii) liquidation of the Company. Under the agreement governing theTrust Fund, funds will only be invested in United States governmentsecurities (Treasury Bills) with a maturity of 180 days or less. Thisamount has been invested in a Treasury Bill. The Treasury Bill has beenaccounted for as a trading security, which is recorded at its marketvalue of approximately $23,804,000 at December 31, 2004. The excess ofmarket value over cost, exclusive of the deferred interest describedfurther below, is included in interest income in the accompanyingstatement of operations. The remaining net proceeds may be used to payfor business, legal and accounting due diligence on prospectiveacquisitions and continuing general and administrativeexpenses. |
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--|--|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  |  | The Company, after signing a definitive agreementfor the acquisition of a target business, will submit such transactionfor stockholder approval. In the event that stockholders owning20% or more of the outstanding stock excluding, for thispurpose, those persons who were stockholders prior to the Offering,vote against the Business Combination, the Business Combination willnot be consummated. All of the Company's stockholders prior tothe Offering, including all of the officers and directors of theCompany ("Initial Stockholders"), have agreedto vote their 1,000,000 founding shares of common stock in accordancewith the vote of the majority in interest of all other stockholders ofthe Company ("Public Stockholders") withrespect to any Business Combination. After consummation of theCompany's first Business Combination, all of these votingsafeguards will no longer be applicable. |
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

F-7

----

RandAcquisition Corporation(a corporation in the developmentstage)    Notes to FinancialStatements

|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--|--|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  |  | With respect to the first BusinessCombination which is approved and consummated, any Public Stockholderwho voted against the Business Combination may demand that the Companyredeem his shares. The per share redemption price will equal the amountin the Trust Fund as of the record date for determination ofstockholders entitled to vote on the Business Combination divided bythe number of shares of common stock held by Public Stockholders at theconsummation of the Offering. Accordingly, Public Stockholders holding19.99% of the aggregate number of shares owned by all PublicStockholders may seek redemption of their shares in the event of aBusiness Combination. Such Public Stockholders are entitled to receivetheir per share interest in the Trust Fund computed without regard tothe shares held by Initial Stockholders. Accordingly, a portion of thenet proceeds from the offering (19.99% of the amount originallyheld in the Trust Fund) has been classified as common stock subject topossible redemption in the accompanying December 31, 2004 balance sheetand 19.99% of the related interest earned on the Treasury Billhas been recorded as deferred interest. |
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--|--|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  |  | The Company'sCertificate of Incorporation provides for mandatory liquidation of theCompany, without stockholder approval, in the event that the Companydoes not consummate a Business Combination within 18 months from thedate of the consummation of the Offering, or 24 months from theconsummation of the Offering if certain extension criteria have beensatisfied. In the event of liquidation, it is likely that the per sharevalue of the residual assets remaining available for distribution(including Trust Fund assets) will be less than the initial publicoffering price per share in the Offering due to costs related to theOffering and since no value would be attributed to the Warrantscontained in the Units sold (Note  2). |
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

|  |  |                                                                                                                                                                              |
|--|--|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  |  | For purposesof the statement of cash flows, the Company considers all highly liquiddebt instruments with an original maturity of three months or less tobe cash equivalents. |
|  |  |                                                                                                                                                                              |

|  |  |                                                                                                                                                                  |
|--|--|------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  |  | The Company maintains cash in bankdeposit accounts which, at times, exceed federally insured limits. TheCompany has not experienced any losses on theseaccounts. |
|  |  |                                                                                                                                                                  |

|  |  |                                                                                                                                                                                                                                                                          |
|--|--|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  |  | Deferred income taxes are provided for thedifferences between the bases of assets and liabilities for financialreporting and income tax purposes. A valuation allowance is establishedwhen necessary to reduce deferred tax assets to the amount expected tobe realized. |
|  |  |                                                                                                                                                                                                                                                                          |

|  |  |                                                                                                                                                                                        |
|--|--|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  |  | The Company recorded a deferred income taxasset for the tax effect of net operating loss carryforwards andtemporary differences, aggregating approximately $8,600 at December 31,2004. |
|  |  |                                                                                                                                                                                        |

|  |  |                                                                                                                                                                              |
|--|--|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  |  | In recognition of the uncertainty regarding theultimate amount of income tax benefits to be derived, the Company hasrecorded a full valuation allowance at December 31,2004. |
|  |  |                                                                                                                                                                              |

F-8

----

RandAcquisition Corporation(a corporation in the developmentstage)    Notes to FinancialStatements

|  |  |                                                                                                             |
|--|--|-------------------------------------------------------------------------------------------------------------|
|  |  | The effective tax rate differs from thestatutory rate of 34% due to the increase in the valuationallowance. |
|  |  |                                                                                                             |

|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--|--|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  |  | Basic loss per share is computed by dividing netloss by the weighted-average number of shares of common stockoutstanding during the period. Diluted earnings per share gives effectto dilutive options, warrants and other potential common stockoutstanding during the period. Potential common stock, amounting to10,100,000 shares, has not been included in the computation of dilutedloss per share, as the effect would be antidilutive. |
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                |

|  |  |                                                                                                                                                                                                                                                                                                                                                                                                           |
|--|--|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  |  | Thepreparation of financial statements in conformity with accountingprinciples generally accepted in the United States of America requiresmanagement to make estimates and assumptions that affect the reportedamounts of assets and liabilities at the date of the financialstatements and the reported amounts of expenses during the reportingperiod. Actual results could differ from thoseestimates. |
|  |  |                                                                                                                                                                                                                                                                                                                                                                                                           |

|  |  |                                                                                                                                                                                            |
|--|--|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  |  | Management does not believe that any recentlyissued, but not yet effective, accounting standards if currentlyadopted would have a material effect on the accompanying financialstatements. |
|  |  |                                                                                                                                                                                            |

|        |                            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|----------------------------|--|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **2.** | **Initial PublicOffering** |  | On November 2, 2004, the Company sold a totalof 4,600,000 units ("Units") in the Offeringand the underwriters' exercise of their overallotment option.Each Unit consists of one share of the Company's common stock,$.0001 par value, and two Redeemable Common Stock Purchase Warrants("Warrants"). Each Warrant will entitle theholder to purchase from the Company one share of common stock at anexercise price of $5.00 commencing the later of the completion of aBusiness Combination with a target business or one year from theeffective date of the Offering and expiring four years from the date ofthe prospectus. The Warrants will be redeemable, upon prior writtenconsent of EarlyBirdCapital, Inc., at a price of $.01 per Warrant upon30 days' notice after the Warrants become exercisable, only inthe event that the last sale price of the common stock is at least$8.50 per share for any 20 trading days within a 30 trading day periodending on the third day prior to the date on which notice of redemptionis given. In connection with this Offering, the Company issued anoption, for $100, to the representative of the underwriters to purchase300,000 Units at an exercise price of $9.90 per Unit. In addition, thewarrants underlying such Units are exercisable at $6.25 pershare. |
|        |                            |  |

|        |                                              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|----------------------------------------------|--|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **3.** | **Commitment and relatedparty transactions** |  | The Company presently occupiesoffice space provided by an affiliate of an Initial Stockholder. Suchaffiliate has agreed that, until the acquisition of a target businessby the Company, it will make such office space, as well as certainoffice and secretarial services, available to the Company, as may berequired by the Company from time to time. The Company has agreed topay such affiliate $7,500 per month for such services |
|        |                                              |  |

F-9

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RandAcquisition Corporation(a corporation in the developmentstage)    Notes to FinancialStatements

|  |  |                                                                                                                                                                |
|--|--|----------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  |  | commencing on the effective date of theOffering. The statement of operations for the period ended December 31,2004 includes $16,209 related to this agreement. |
|  |  |                                                                                                                                                                |

|  |  |                                                                                                                                                                                                                                                    |
|--|--|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  |  | During theperiod, the Company issued a $70,000 promissory note to an InitialStockholder, who is also an officer. This note was non-interest bearingand was repaid following the consummation of the Offering from the netproceeds of suchOffering. |
|  |  |                                                                                                                                                                                                                                                    |

|        |                    |  |                                                                                                                                                                                                       |
|--------|--------------------|--|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **4.** | **PreferredStock** |  | The Company is authorized to issue 1,000,000shares of preferred stock with such designations, voting and otherrights and preferences as may be determined from time to time by theBoard of Directors. |
|        |                    |  |

|        |                 |  |                                                                                                                                                                                                                                                                                                                     |
|--------|-----------------|--|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **5.** | **CommonStock** |  | On October 7, 2004, the Company's Board ofDirectors authorized a stock dividend of 0.1428571 shares of commonstock for each outstanding share of common stock. All references in theaccompanying financial statements to the number of shares of stock havebeen retroactively restated to reflect this transaction. |
|        |                 |  |

|  |  |                                                                                                                                                                 |
|--|--|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  |  | AtDecember 31, 2004, 10,100,000 shares of common stock were reserved forissuance upon exercise of redeemable warrants and theunderwriters' unit purchaseoption. |
|  |  |                                                                                                                                                                 |

F-10

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SIGNATURES

Pursuant to the requirements of the Section 13 or 15 or 15(d) of theSecurities Exchange Act of 1934, the registrant has duly caused thisreport to be signed on its behalf by the undersigned, thereunto dulyauthorized on the 30th day of March 2005.

|        |  |                                 |  |                                                                                                                           |  |  |  |  |  |  |
|--------|--|---------------------------------|--|---------------------------------------------------------------------------------------------------------------------------|--|--|--|--|--|--|
|   |  | **RANDACQUISITION CORPORATION** |
|   |  | By:                             |  | /s/Laurence S. Levy                                                                                                       |
|   |  |                            |  | Laurence S.Levy Chairman of the Board and Chief ExecutiveOfficer(Principal Executive and Financial and AccountingOfficer) |
|        |

In accordance with the SecuritiesExchange Act of 1934, this report has been signed below by thefollowing persons on behalf of the registrant and in the capacities andon the datesindicated.

|                     |  |                                                                                                               |  |               |
|---------------------|--|---------------------------------------------------------------------------------------------------------------|--|---------------|
| Name                |  | Title                                                                                                         |  | Date          |
|                     |
| /s/Laurence S. Levy |  | Chairman of the Board andChief  Executive Officer (Principal  Executive andFinancial  and Accounting Officer) |  | March 30,2005 |
|                     |
| Laurence S.Levy     |
|                     |
| /s/ Isaac Kier      |  | Director                                                                                                      |  | March 30,2005 |
|                     |
| IsaacKier           |
|                     |
| /s/ Sandeep D. Alva |  | Director                                                                                                      |  | March 30,2005 |
|                     |
| SandeepD. Alva      |
|                     |

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