UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-KSB/A
                                (Amendment No. 1)

|_|   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
      ACT OF 1934

For the fiscal year ended:

|X|   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
      EXCHANGE ACT OF 1934

      For the transition period from January 1, 2006 to March 31, 2006

                        Commission File Number 000-50908

                              RAND LOGISTICS, INC.
                 (Name of Small Business Issuer in Its Charter)

        Delaware                                        20-1195343
(State of Incorporation)                    (I.R.S. Employer Identification No.)

       450 Park Avenue, 10th Floor                        10022
           New York, New York                           (Zip Code)
(Address of Principal Executive Offices)

                                  212-644-3450
                (Issuer's Telephone Number, Including Area Code)

           Securities registered pursuant to Section 12(b) of the Act:
                                      None

           Securities registered 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, $.0001 par value per share
                   Warrants to purchase shares of Common Stock

Check whether the Issuer is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act. |_|

Check whether the Issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirement for the past 90 days. Yes |X| No |_|

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. |_|

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

Issuer's revenues for the fiscal year ended March 31, 2006 were $1,730,402.

As of July 13, 2006, the aggregate market value of the common stock held by
non-affiliates of the Registrant was approximately $24,655,196.

As of July 13, 2006, there were 5,600,000 shares of Common Stock, $.0001 par
value per share, outstanding. Transitional Small Business Disclosure Format
(check one): Yes |_| No |X|

<PAGE>

Explanatory Note:

This Form 10-KSB/A is being filed to correct inadvertent errors made during the
Edgarization of Rand Logistics, Inc.'s Form 10-KSB for the transition period
from January 1, 2006 to March 31, 2006 as well as typographical and other
clerical errors contained therein. These corrections consist of the following:

Consolidated Statements of Stockholders' Equity and Comprehensive Income (Loss)
- We have corrected the Comprehensive loss line item.

Consolidated Statements of Cash Flows - We have deleted the line item for
Non-cash investing and financing transactions not included in cash flows
previously provided under Supplemental Cash Flow disclosure.

Notes to the Consolidated Financial Statements - Note 7 - We have corrected the
Total deferred tax asset line item and added the heading Total Deferred Tax
Asset to the totals line.

Notes to the Consolidated Financial Statements - Note 25 - We have corrected
line items for Weighted avg. warrants (total o/s / avg price) and Weighted
average common shares for diluted EPS and added an explanatory note.

Notes to the Consolidated Financial Statements - Note 28 - We have corrected the
Net loss per share - basic and diluted line item and added an explanatory note.

Exhibit 23.1 - We have provided a corrected consent for Grant Thornton LLP.

Exhibit 23.2 - We have provided a corrected consent for Goldstein Golub Kessler
               LLP.

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

      Rand Logistics, Inc. (formerly Rand Acquisition Corporation) was
incorporated in the State of Delaware on June 2, 2004 as a blank check company
to effect a merger, capital stock exchange, asset acquisition or other similar
business combination with an operating business. On November 2, 2004, we closed
our initial public offering of 4,000,000 units with each unit consisting of one
share of our common stock and two warrants, each to purchase one share of our
common stock at an exercise price of $5.00 per share. The units were sold at an
offering price of $6.00 per unit, generating gross proceeds of $24,000,000. On
November 3, 2004, we sold an additional 600,000 units pursuant to the
underwriters' over-allotment option raising additional gross proceeds of
$3,600,000. After deducting the underwriting discounts and commissions and the
offering expenses, the total net proceeds to us from the offering were
approximately $24,605,000.

      On March 3, 2006, we acquired all of the outstanding shares of capital
stock of Lower Lakes Towing Ltd., a Canadian corporation which, with its
subsidiary Lower Lakes Transportation Company, provides bulk freight shipping
services throughout the Great Lakes region. As part of the acquisition of Lower
Lakes, we also acquired Lower Lakes' affiliate, Grand River Navigation Company,
Inc. Prior to the acquisition, we did not conduct, or have any investment in,
any operating business. In this discussion of Rand's business, unless the
context otherwise requires, references to Rand include Rand and its direct and
indirect subsidiaries, and references to Lower Lakes' business or the business
of Lower Lakes mean the combined businesses of Lower Lakes, Lower Lakes
Transportation and Grand River.

      Rand's shipping business is operated in Canada by Lower Lakes and in the
United States by Lower Lakes Transportation. Lower Lakes was organized in March
1994 under the laws of Canada to provide marine transportation services to dry
bulk goods suppliers and purchasers operating in ports in the Great Lakes that
were restricted in their ability to receive larger vessels. Lower Lakes has
grown from its origin as a small tug and barge operator to a full service
shipping company with a fleet of eight cargo-carrying vessels. From its
exclusively Canadian beginnings, Lower Lakes has also grown to offer domestic
services to both Canadian and U.S. customers as well as cross-border routes.
Lower Lakes services the construction, electric utility and integrated steel
industries through the transportation of limestone, coal, iron ore, salt, grain
and other dry bulk commodities.

      We believe that Lower Lakes is the only company providing significant
domestic port-to-port services to both Canada and the United States in the Great
Lakes region. Lower Lakes maintains this operating flexibility by operating both
U.S. and Canadian flagged vessels in compliance with the Shipping Act, 1916, and
the Merchant Marine Act, 1920, commonly referred to as the Jones Act, in the
U.S. and the Coasting Trade Act (Canada) in Canada.

      Lower Lakes' fleet consists of four self-unloading bulk carriers in Canada
and three self-unloading bulk carriers as well as a tug and a self-unloading
barge in the U.S. Lower Lakes owns three of the four Canadian vessels and its
wholly-owned subsidiary, Port Dover Steamship Company Inc., owns the fourth and
charters it to Lower Lakes. Lower Lakes Transportation time charters the five
vessels in the U.S. from Grand River, which owns three of the U.S. flagged
vessels and charters the fourth and the barge from a third party under long term
charter arrangements.

      Lower Lakes is a leader in the provision of River Class bulk freight
shipping services throughout the Great Lakes, operating more than one-third of
all River Class vessels servicing the Great Lakes and the majority of
boom-forward equipped vessels in this category. Boom forward self-unloading
vessels - those with their booms located in front of the cargo holds - offer
greater accessibility for delivery of cargo to locations where only forward
access is possible. Seven of the vessels used in Lower Lakes' operations are
boom forward self-unloaders and one vessel is a boom aft self-unloader. River
Class vessels - which represent the smaller end of Great Lakes vessels with
maximum dimensions of approximately 650 feet in length and 72 feet in beam and

<PAGE>

carrying capacities of 15,000 to 20,000 tons - are ideal for customers seeking
to move significant quantities of dry bulk product to ports which restrict
non-River Class vessels due to size and capacity constraints. Of the 37 Canadian
self-unloading vessels currently in operation, seven are River Class, each of
which is boom forward. Lower Lakes operates three of these vessels. The U.S.
Great Lakes fleet includes 12 River Class vessels, four boom forward, eight boom
aft. Lower Lakes Transportation operates four of the boom forward vessels, one
of which is the barge.

Customers

      Lower Lakes services approximately 50 customers in a diverse array of end
markets by shipping dry bulk commodities such as construction aggregates, coal,
grain, iron ore and salt. Lower Lakes' top ten customers accounted for
approximately 74% of its revenue during the twelve months ended March 31, 2006.
Lower Lakes is the sole-source shipping provider to several of its customers.
Many of Lower Lakes' customers are under long-term contracts with Lower Lakes,
which typically average three to five years in duration and provide for minimum
and maximum tonnage, annual price escalation features, and fuel surcharges.

Competition

      Lower Lakes faces competition from other marine and land-based
transporters of dry bulk commodities in and around the Great Lakes area. In the
River Class market segment, Lower Lakes generally faces three primary
competitors: Seaway Marine Transport, American Steamship Company and Oglebay
Norton Marine Services. Seaway Marine Transport is a Canadian traffic and
marketing partnership, which owns 22 self-unloading vessels, four of which are
River Class boom forward vessels. American Steamship Company operates in the
U.S. and maintains a fleet of 19 vessels, four of which are River Class and
Oglebay Norton operates a fleet of three river class vessels. We believe that
industry participants compete on the basis of customer relationships, price, and
service, and that the ability to meet a customer's schedule and offer shipping
flexibility is a key competitive factor. Moreover, we believe that customers are
generally willing to continue to use the same carrier assuming such carrier
provides satisfactory service with competitive pricing.

Employees

      As of March 31, 2006, Lower Lakes had approximately 230 full-time
employees, 18 of whom were management and 212 were operational. Approximately
42% of Lower Lakes' employees (all U.S. based Grand River Navigation crew) are
unionized with the International Organization of Masters, Mates and Pilots,
AFL-CIO. Lower Lakes has never experienced a work stoppage as a result of labor
issues, and we believe that our employee relations are good. Our executive
officers are Laurence S. Levy, who serves as our chairman of the board and chief
executive officer; Edward Levy, who serves as our president; and Joseph W.
McHugh, Jr., who serves as our chief financial officer. Carol Zelinski is
Secretary of Rand. Rand does not at present have any other employees.

Additional Information

      Additional information relating to Rand's and Lower Lakes' business is
included in Exhibit 99.1 to this Form 10-KSB, which is incorporated herein by
reference.

ITEM 2. DESCRIPTION OF PROPERTY

      Rand maintains its executive 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 chief executive
officer. We pay ProChannel Management a monthly fee of $7,500 which is for


                                       2
<PAGE>

general and administrative services including office space, utilities and
secretarial support. We believe, based on rents and fees for similar services in
the New York City metropolitan area, that the fee charged by ProChannel
Management is at least as favorable as we could have obtained from an
unaffiliated person. ProChannel is not obligated to continue to provide such
office space and services to us, and there can be no assurance as to whether, or
for how long, ProChannel will continue to make such office space available.

      Lower Lakes' currently leases the following properties:

      o     Lower Lakes Towing has leased approximately 4,500 square feet of
            warehouse space at 207 Greenock Street, Port Dover, Ontario under a
            lease that expires October 2007.

      o     Lower Lakes Towing has leased approximately 3,075 square feet of
            office space at 517 Main Street, Port Dover, Ontario that expires
            March 2013.

      o     Lower Lakes Transportation has leased approximately 100 square feet
            of office space at 1207 Delaware Avenue, Suite 217, Buffalo, New
            York under a lease that expires March 31, 2007.

      o     Grand River Navigation has leased approximately 1,000 square feet of
            space at 515 Moore Road, Suite 2, Avon Lake, Ohio under a lease that
            expires July 31, 2008.

      We consider our current office space adequate for our current operations.

ITEM 3. LEGAL PROCEEDINGS

      Rand is not involved in any legal proceedings which may have a significant
effect on its business, financial position, results of operations or liquidity,
nor are we aware of any proceedings that are pending or threatened which may
have a significant effect on our business, financial position, results of
operations or liquidity. From time to time, Lower Lakes may be subject to legal
proceedings and claims in the ordinary course of business, involving principally
commercial charter party disputes. It is expected that these claims would be
covered by insurance if they involve liabilities such as arise from collision,
other marine casualty, damage to cargoes, oil pollution, death or personal
injuries to crew, subject to customary deductibles. Those claims, even if
lacking merit, could result in the expenditure of significant financial and
managerial resources.

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

None.

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

      Our units, common stock and warrants are traded on the Over-the-Counter
Bulletin Board under the symbols RAQCU, RAQC and RAQCW, respectively. The
following table sets forth the range of high and low closing bid prices for the
units, common stock and warrants for the periods indicated since the units
commenced public trading on October 28, 2004 and since the common stock and
warrants commenced public trading on November 10, 2004. The over-the-counter
market quotations reflect inter-dealer prices, without retail mark-up, mark-down
or commission and may not necessarily reflect actual transactions.


                                       3
<PAGE>

                                Common Stock         Warrants          Units
                              ----------------   ---------------   -------------
Quarter Ended                  High       Low     High      Low     High    Low
                              -----      -----   -----     -----   -----   -----
December 31, 2004             $5.50      $4.50   $0.85     $0.60   $6.70   $5.95
March 31, 2005                $5.70      $5.07   $1.03     $0.69   $7.36   $6.50
June 30, 2005                 $5.43      $5.10   $0.85     $0.68   $6.90   $6.32
September 30, 2005            $5.70      $5.55   $1.10     $1.05   $7.65   $7.65
December 31, 2005             $5.90      $5.39   $1.22     $0.85   $7.90   $7.05
March 31, 2006                $5.65      $5.05   $1.30     $0.80   $7.40   $6.50

Holders

      As of July 14, 2006, there was one holder of record of our units, five
holders of record of our common stock and one holder of record of our warrants.

Dividends

      We have not paid any dividends on our common stock to date and do not
intend to pay dividends on our common stock in the near future. The payment of
dividends in the future will be contingent upon our revenues, earnings, capital
requirements and general financial condition. The payment of dividends is within
the discretion of our board of directors. Other than dividends which our board
of directors may determine to pay on our preferred stock, it is the present
intention of our board of directors to retain all earnings for future investment
and use in our business operations. Accordingly, our board of directors does not
anticipate declaring any dividends in the foreseeable future on our common
stock. In addition, no dividends may be declared or paid on our common stock
unless all accrued dividends on our preferred stock have been paid.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

      Plan of Operation. The following presentation of the plan of operation of
Rand has been prepared by internal management and should be read in conjunction
with the financial statements and notes thereto included in, or referred to, in
this report. Some of the statements below discuss "forward-looking" information.
Those statements include statements regarding the intent, belief or current
expectations of Rand and its management team. You are cautioned that any such
forward-looking statements are not guarantees of future performance and involve
risks and uncertainties. These risks and uncertainties include but are not
limited to, those risks and uncertainties discussed in Exhibit 99.1 to this Form
10-KSB which is incorporated herein by reference. In light of the significant
risks and uncertainties inherent in the forward-looking statements included in
this report, the inclusion of such statements should not be regarded as a
representation by us or any other person that our objectives and plans will be
achieved.

      Rand was formed on June 2, 2004 to serve as a vehicle to effect an
acquisition, merger, capital stock exchange, asset acquisition or other similar
business combination with an unidentified operating business. On November 2,
2004, we closed our initial public offering of 4,000,000 units with each unit
consisting of one share of our common stock and two warrants, each to purchase
one share of our common stock at an exercise price of $5.00 per share. The units
were sold at an offering price of $6.00 per unit, generating gross proceeds of


                                       4
<PAGE>

$24,000,000. On November 3, 2004, we sold an additional 600,000 units pursuant
to the underwriters' over-allotment option raising additional gross proceeds of
$3,600,000. After deducting the underwriting discounts and commissions and the
offering expenses, the total net proceeds to us from the offering were
approximately $24,605,000.

      In connection with our initial public offering, we issued to the
representative of the underwriters, for $100, an option to purchase up to a
total of 300,000 units, with each unit consisting of one share of common stock
and two warrants. The units issuable upon exercise of the option are identical
to those issued in our initial public offering except that the warrants included
in the units underlying the option have an exercise price of $6.25 per share.
The option will be exercisable by the holder at $9.90 per unit commencing upon
our consummation of a business combination and will expire on October 26, 2009.
We accounted for the fair value of the option, inclusive of the receipt of the
$100 cash payment, as an expense of our initial public offering resulting in a
charge directly to stockholders' equity. We estimate that the fair value of this
option is approximately $558,000 ($1.86 per Unit) using a Black-Scholes
option-pricing model. The fair value of the option has been estimated as of the
date of grant using the following assumptions: (1) expected volatility of
47.79%, (2) risk-free interest rate of 3.34% and (3) expected life of 5 years.
The option may be exercised by the holder for cash or on a "cashless" basis, at
the holder's option, such that the holder may use the appreciated value of the
option (the difference between the exercise prices of the option and the
underlying warrants and the market price of the units and underlying securities)
to exercise the option without the payment of any cash.

      On March 3, 2006, Rand, through its wholly-owned subsidiary, LL
Acquisition Corp., acquired all of the outstanding shares of capital stock of
Lower Lakes Towing in accordance with the terms of the Stock Purchase Agreement,
dated September 2, 2005, by and among Rand, LL Acquisition Corp. and the
stockholders of Lower Lakes, as amended. Immediately following completion of the
acquisition, and in conjunction therewith, LL Acquisition Corp. and Lower Lakes
were amalgamated under Canadian law and the shares of capital stock of Grand
River and Lower Lakes Transportation owned by Lower Lakes at the time of the
amalgamation were transferred to Rand's wholly-owned subsidiary, Rand LL
Holdings Corp. Upon completion of such transfer, the outstanding shares of Grand
River not owned by Rand LL Holdings Corp. were redeemed in accordance with the
terms of the Redemption Agreement, dated September 2, 2006, between Grand River
and GR Holdings, Inc. Following completion of the foregoing transactions, as of
March 3, 2006, each of Lower Lakes, Grand River and Lower Lakes Transportation
became indirect, wholly-owned subsidiaries of Rand. In conjunction with the
foregoing transactions, as of March 3, 2006, Rand changed its name to Rand
Logistics, Inc.

      In accordance with the terms of the Stock Purchase Agreement and
Redemption Agreement, respectively, Rand paid US$9,843,748 to the selling
shareholders of Lower Lakes and US$750,000 to GR Holdings, Inc., and arranged
for the repayment of the acquisition closing date indebtedness of such entities
of Cdn$43,732,749 and US$5,156,945, respectively. The amount paid to the Lower
Lakes selling shareholders reflects certain adjustments made on the acquisition
closing date in accordance with the Stock Purchase Agreement and such amount is
subject to further adjustment after the acquisition closing based Rand's
determination of the net working capital of Lower Lakes and its affiliates as of
January 15, 2006. Rand funded the acquisition closing date payments with the
approximately US$24,646,000 of proceeds of its initial public offering held in
trust, US$15,000,000 of proceeds of the acquisition closing date issuance of
Rand's newly created series A convertible preferred stock, and proceeds of the
new senior loan facility entered into on the acquisition closing date by Lower
Lakes, Grand River and Lower Lakes Transportation.

      The shares of series A convertible preferred stock were issued pursuant to
the terms of the Preferred Stock Purchase Agreement, dated September 2, 2005, by
and among Rand and Knott Partners LP and certain of its affiliates, and Bay
Resource Partners L.P. and certain of its affiliates. In accordance with the
terms of the Preferred Stock Purchase Agreement, Rand issued 300,000 shares on
the acquisition closing date for $50 per share or an aggregate purchase price of
$15,000,000. The shares of series A convertible preferred stock were not
registered under the Securities Act of 1933, but the series A preferred
stockholders have the right to require the filing of a registration statement
with respect to shares of Rand common stock issuable upon conversion of the
shares of series A convertible preferred stock. The series A preferred


                                       5
<PAGE>

stockholders are prohibited from selling any shares of such common stock under a
registration statement prior to the six month anniversary of the acquisition
closing date or more than one half of all such shares of common stock held by
them as a group prior to the twelve month anniversary of the acquisition closing
date. The shares of series A convertible preferred stock: rank senior to Rand's
common stock with respect to liquidation and dividends; are entitled to receive
a cash dividend at the annual rate of 7.75% (based on the $50 per share issue
price), payable quarterly (subject to increases of 0.5% for each six month
period in respect of which the dividend is not timely paid, up to a maximum of
12%, subject to reversion to 7.75% upon payment of all accrued and unpaid
dividends); are convertible into shares of Rand common stock at any time at the
option of the series A preferred stockholder at a conversion price of $6.20 per
share (based on the $50 per share issue price and subject to adjustment) or
8.065 shares of common stock for each Series A Preferred Share (subject to
adjustment); are convertible into shares of Rand common stock (based on a
conversion price of $6.20 per share, subject to adjustment) at the option of
Rand if, after the third anniversary of the acquisition, the trading price of
Rand's common stock for 20 trading days within any 30 trading day period equals
or exceeds $8.50 per share (subject to adjustment); may be redeemed by Rand in
connection with certain change of control or acquisition transactions; will vote
on an as-converted basis with Rand's common stock; and have a separate vote over
certain material transactions or changes involving Rand.

      Rand's Certificate of Incorporation was amended and restated on the
acquisition closing date to, among other things, increase the number of shares
of common stock that Rand is authorized to issue from 20,000,000 shares to
50,000,000 shares, and to adopt certain amendments designed to ensure Rand's
compliance with the citizenship requirements of U.S. maritime laws, including
the Shipping Act, 1916, and the Merchant Marine Act, 1920, commonly referred to
as the Jones Act, after completion of the acquisition. The maritime law-related
amendments limit the aggregate percentage ownership of Rand's capital stock,
including common stock, by non-U.S. citizens to 23% of the outstanding shares of
Rand's capital stock and no more than 23% of the voting power of Rand. In
addition, these amendments give Rand's Board of Directors the authority to make
such determinations as may reasonably be necessary to ascertain such ownership
and to implement such limitations, including limiting transfers of shares and
redeeming shares held by anyone whose ownership of such shares would cause Rand
to be in violation of U.S. maritime laws.

      Rand intends to continue to pursue acquisition opportunities in an effort
to diversify its investments. Rand's strategy and business model as it relates
to Lower Lakes includes the following:

      o     Selected acquisitions. Since October 1999, Lower Lakes has added
            seven cargo-carrying vessels to its fleet, making Lower Lakes one of
            the most acquisitive shipping companies in the Great Lakes region.
            Rand's management believes that the acquisition of additional
            vessels would provide it with a larger share of the available River
            Class capacity, provide additional operating flexibility and extend
            the longevity of its fleet. Rand is actively pursuing acquisition
            opportunities but is not committed to any acquisitions at the
            present time;

      o     New customer relationships and long-term contracts. Rand believes
            that opportunities exists to enter into additional long-term
            contracts with new customers. Rand believes that Lower Lakes has
            historically built strong relationships with its customers, who Rand
            believes view Lower Lakes as a strategic supplier offering lower
            costs and greater flexibility than the larger shipping companies;
            and

      o     Expand existing customer relationships. In addition to gaining new
            customers, Rand believes opportunities exist for Rand to increase
            its business with existing customers.


                                       6
<PAGE>

      Lower Lakes' vessels require general maintenance and capital upgrades each
year to ensure the fleet operates efficiently during the shipping season and to
minimize downtime during the operating season. This work is completed during
January, February, and March each year when the vessels are not active. The age
of the vessels, combined with the prohibitive replacement cost of a vessel,
increases the importance of having an appropriate maintenance program.
Historically, the cost of winter work averages approximately $500,000 per
vessel. Between 40% and 60% of the winter work projects have been expensed as
maintenance expenditures, with the balance of winter work expenditures
capitalized. Capitalized winter work expenditures include items such as steel
replacement and engine overhauls.

      Every vessel on the Great Lakes must be dry docked, inspected, and
certified every four years in Canada and five years in the U.S., although
one-year extensions are frequently granted. This certification in the U.S. is
known as the five-year survey. Dry docking certification entails the visual
inspection and measurement of all parts of the vessel that are located
underwater. Certification also requires the inspection of the internal structure
of the vessel, all fuel tanks, the main deck, cargo holds, and several other
parts of the vessel. Any required repairs are made at this time. In addition, it
is normal to paint the underwater portion of the vessel's hull and make repairs
as required to any bow or stern thrusters during the certification process. Dry
docking expenses are capitalized when incurred and amortized over the benefit
period, which is either four to five years for Canadian vessels or five to six
years for U.S. vessels. Historically, the cost of the certification process for
each vessel has averaged approximately $625,000. Such costs could be
dramatically higher in the future depending on the nature of repairs required.

      Rand believes that its current cash on hand together with cash flows from
operations of Lower Lakes will be sufficient to satisfy Lower Lakes' and Rand's
cash requirements for the foreseeable future; provided, however, that there can
be no assurance that Rand will have sufficient cash to pay current dividends on
the series A preferred stock, in which case such dividends would accrue in
accordance with the terms of the series A preferred stock.

      Neither Rand nor Lower Lakes has any specific current plans to increase or
decrease the number of its employees or to purchase or sell any significant
equipment. However, implementation of Rand's acquisition strategy could result
in a future increase in the number of its employees or future acquisitions of
equipment.

      Off-Balance Sheet Arrangements. Options and warrants issued in conjunction
with our initial public offering are equity linked derivatives and accordingly
represent off-balance sheet arrangements. The options and warrants meet the
scope exception in paragraph 11(a) of FAS 133 and are accordingly not accounted
for as derivatives for purposes of FAS 133, but instead are accounted for as
equity. See the notes to the March 31, 2006 financial statements for a
discussion of outstanding options and warrants.

      Rand changed its fiscal year end from December 31 to March 31, effective
March 3, 2006. Information in this Transition Report on Form 10-KSB for the
current year is representative of the three month transition period from January
1, 2006 though March 31, 2006.

ITEM 7. FINANCIAL STATEMENTS

      This information appears following Item 14 of this Report and is
incorporated herein by reference.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

None.

ITEM 8A. CONTROL AND PROCEDURES

      An evaluation of the effectiveness of our disclosure controls and
procedures as of March 31, 2006 was made under the supervision and with the
participation of our management, including our chief executive officer. Based on
that evaluation, we concluded that our disclosure controls and procedures are
effective as of the end of the period covered by this report to ensure that
information required to be disclosed by us in reports that we file or submit
under the Securities Exchange Act of 1934, as amended, is recorded, processed,
summarized and reported within the time periods specified in Securities and
Exchange Commission rules and forms.

      Since our inception through March 31, 2006, there were no significant
changes in our internal controls over financial reporting that has materially
affected, or is reasonably likely to material affect our internal controls over
financial reporting. The Company's independent registered chartered accounting
firm, Grant Thornton LLP, has notified our audit committee that it has
identified material weaknesses and significant deficiencies in the Company's
internal control systems, which were identified as part of the financial
statement audit.

      The auditors identified the following material weaknesses in the Company's
internal controls:

      o     the lack of an established audit committee as of March 31, 2006;


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<PAGE>

      o     the lack of sufficient accounting personnel within its financial
            reporting division; and

      o     three significant deficiencies that cumulatively represent a
            material weakness: 1) a lack of segregation of duties regarding
            incompatible processes and controls; 2) a lack of documented
            accounting policies and procedures; and 3) a lack of documented
            controls.

      The auditors identified the following significant deficiencies in the
Company's internal controls:

      o     the Company does not have any written and tested disaster recovery
            plan in place; and

      o     the Company does not have a process in place to receive, evaluate,
            and retain complaints regarding accounting and financial reporting
            issues.

      The Company established an audit committee on June 16, 2006, to increase
its oversight of the disclosure and reporting processes. The audit committee
intends to evaluate the above matters, as well as possible changes to the
Company's internal controls to address such matters.

ITEM 8B. OTHER INFORMATION

None.

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT.

Directors and Executive Officers

Our current directors and executive officers are as follows:

Name                          Age                 Position
--------------------------------------------------------------------------------
Laurence S. Levy              50        Chairman of the Board and Chief
                                        Executive Officer, Rand; Director and
                                        Vice President, Lower Lakes, Lower Lakes
                                        Transportation and Grand River

Edward Levy                   42        President, Rand

Joseph W. McHugh, Jr.         51        Chief Financial Officer, Rand

Scott Bravener                42        President, Lower Lakes and Lower Lakes
                                        Transportation; Director, Rand and Lower
                                        Lakes

James Siddall                 42        Vice President - Marine Operations,
                                        Lower Lakes and Lower Lakes
                                        Transportation

Jeffrey Botham                40        Chief Financial Officer, Lower Lakes and
                                        Lower Lakes Transportation

Mark Rohn                     49        President, Grand River

Isaac Kier                    53        Director, Rand

H. Cabot Lodge, III           50        Director, Rand

Jonathan Brodie               50        Director, Rand


      Laurence S. Levy has been Chairman of our Board of Directors and our Chief
Executive Officer since our inception. Mr. Levy founded the predecessor to Hyde
Park Holdings, LLC in July 1986 and has since served as its Chairman. Hyde Park
Holdings, LLC is an investor in middle market businesses. Mr. Levy serves as an
officer or director of many companies in which Hyde Park Holdings, LLC or its
affiliates invests. Presently, these companies include: Ozburn-Hessey Logistics
LLC, a national logistics services company, of which Mr. Levy is a director;
Derby Industries LLC, a sub-assembly business to the appliance, food and


                                       8
<PAGE>

transportation industries, of which Mr. Levy is Chairman; PFI Resource
Management LP, an investor in the Private Funding Initiative program in the
United Kingdom, of which Mr. Levy is general partner; Parking Company of America
Airports LLC, an owner and operator of airport parking garages, of which Mr.
Levy is a director; Regency Affiliates, Inc., a diversified publicly listed
company, of which Mr. Levy is Chairman, Chief Executive Officer and President;
Warehouse Associates L.P., a provider of warehouse and logistics services, of
which Mr. Levy is Chairman. In addition, from March 1997 to January 2001, Mr.
Levy served as Chairman of Detroit and Canada Tunnel Corporation, a company
which operates the toll tunnel between Detroit, Michigan and Windsor, Ontario,
and from August 1993 until May 1999, Mr. Levy served as Chief Executive Officer
of High Voltage Engineering Corporation, a diversified industrial and
manufacturing company. Mr. Levy received a Bachelor of Commerce degree and a
Bachelor of Accountancy degree from the University of Witwatersrand in
Johannesburg, South Africa. He is qualified as a Chartered Accountant (South
Africa). Mr. Levy received a Master of Business Administration degree from
Harvard University and graduated as a Baker Scholar.

      Edward Levy was a managing director of CIBC World Markets Corp. from
August 1995 through December 2004, and was co-head of CIBC World Markets Corp.'s
Leveraged Finance Group from June 2001 until December 2004. From February 1990
to August 1995, Mr. Levy was a managing director of Argosy Group L.P., a private
investment banking firm. Since June 1998, Mr. Levy has been a member of the
board of managers of Norcross Safety Products LLC, a reporting company under the
Securities Exchange Act of 1934, as amended, engaged in the design, manufacture
and marketing of branded products in the fragmented personal protection
equipment industry. From July 1999 until March 2005, he was also a director of
Booth Creek Ski Holdings, Inc., a reporting company under the Securities
Exchange Act of 1934 that owns and operates six ski resort complexes
encompassing nine separate resorts. Mr. Levy is a member of the board of
directors of a number of privately-held companies. Mr. Levy received a B.A. from
Connecticut College. Mr. Levy is not related to Laurence S. Levy, our Chairman
and Chief Executive Officer.

      Joseph W. McHugh, Jr. has served as a financial consultant to the
bankruptcy trustee of High Voltage Engineering Corporation ("HVEC"), a
diversified group of industrial and technology based manufacturing and services
businesses since January 1, 2006. HVEC filed a voluntary petition for relief
under Chapter 11 of the U.S. Bankruptcy Code on March 1, 2004 and again on
February 8, 2005. Mr. McHugh served as Chief Financial Officer of HVEC from 1992
through 2004 and as its Vice President of Finance during 2005. Mr. McHugh's CFO
responsibilities included accounting, SEC and lender financial reporting,
banking, taxes, employee benefit plans, investor/lender relations, and closing
of complex financings, acquisitions and divestitures. Mr. McHugh received a B.S.
in Accounting and a M.B.A. from Bentley College, and is a Certified Management
Accountant.

      Captain Scott Bravener has served as Lower Lakes' President and Chief
Executive Officer since its inception in 1994, and until 2001 also served as the
captain of the Cuyahoga, a vessel owned by Lower Lakes. Captain Bravener has
worked in the Great Lakes shipping industry since 1982, serving in various
capacities for Canada Steamship Lines Inc. and P & H Shipping prior to the
formation of Lower Lakes. Captain Bravener is a director of the Canadian
Shipowners Mutual Assurance Association, is a certified Ships Master and is a
member of the American Bureau of Shipping. Captain Bravener is a graduate of
Marine Navigation Technology, Georgian College, Owen Sound, Ontario.

      Captain James Siddall joined Lower Lakes in 1994 and currently serves as
its Vice President of Marine Operations. Until 2001, Captain Siddall also served
as the relief captain of the Cuyahoga, a vessel owned by Lower Lakes. Captain
Siddall has worked in the Great Lakes Shipping industry since 1981, serving in
various capacities with Algoma Central Marine prior to the formation of Lower
Lakes. Captain Siddall sits on the Georgian College Marine Advisory Council. He
is a certified Ships Master as well as a graduate of Marine Navigation
Technology, Georgian College, Owen Sound, Ontario.


                                       9
<PAGE>

      Jeffrey Botham has served as the Chief Financial Officer of Lower Lakes
since 2003. Between 2002 and 2003, Mr. Botham served as Chief Financial Officer
of GolfNorth Properties, Inc., a privately held golf course consolidator. From
2000 to 2002, Mr. Botham served as Chief Financial Officer of EDJ Packaging,
Inc., an international equipment broker, based in Southwestern Ontario. During
2000, Mr. Botham served as Vice President of Finance and Chief Financial Officer
for Hip Interactive Corp., a publicly listed group of companies in the video
game distribution business. From 1995 to 2000, Mr. Botham served in roles of
increasing responsibilities including Vice President, Finance, Chief Financial
Officer and Secretary for Brick Brewing Co. Limited, a publicly listed regional
brewery. From 1989 to 1995, Mr. Botham served as Manager of Accounting and
Controller for privately held Algonquin Brewing Company. Mr. Botham earned his
B.A. at the University of Waterloo and is a Certified Management Accountant
(Canada). Mr. Botham received a Master of Business Administration degree from
Wilfrid Laurier University in Waterloo, Ontario.

      Mark Rohn has served as President of Grand River since 2001. Mr. Rohn has
worked in the Great Lakes shipping industry since 1978, serving in various
capacities with Oglebay Norton, Hanna Mining, Great Lakes Towing and N.M.
Paterson and Sons. Mr. Rohn earned a bachelor's degree in Business Management
from Cleveland State University.

      Isaac Kier has been a member of our Board of Directors since our
inception. Since February 2006 Mr. Kier has been the principal at Kier Global
LLC, a private equity and real estate investment firm. From 2000 to 2006, Mr.
Kier served as a general partner of Coqui Capital Partners L.P., a venture
capital firm. Since February 2004, he has also been the secretary and treasurer
and a member of the board of directors of Tremisis Energy Acquisition
Corporation, an OTC Bulletin Board-listed company which has signed an agreement
to purchase Ram Energy. Since June 2005, Mr. Kier has also been a director of
Paramount Acquisition Corporation, a company formed for the purpose of acquiring
an operating business in either the biotechnology or specialty pharmaceuticals
industry. Since April 2005, Mr. Kier has also been Chief Executive Officer and
director of MPLC, Inc., a publicly-traded company which currently does not have
any business operations but is pursuing business combination opportunities.
Since October 2004, Mr. Kier has served as a member of the board of directors of
Hana Biosciences Inc., (AMEX:HBX), a biopharmaceutical company. From 1987 to
1997, he served as the managing partner of the Alabama 8 market, a non-wireline
cellular licensee. From 1982 until its sale in 1995, Mr. Kier served as chairman
of the board and chief executive officer of Lida, Inc., a Nasdaq-listed company
engaged in textile production and printing. Mr. Kier received a B.A. in
Economics from Cornell University and a J.D. from George Washington University
Law School.

      H. Cabot Lodge III has been a member of our Board of Directors since June
6, 2006. Mr. Lodge founded ARC Global Partners LLC in 2006, an international
real estate merchant bank, and currently serves as its Managing Partner. From
2000 to 2005, Mr. Lodge served as an Executive Vice President of, iStar
Financial Inc., a provider of financing to private and corporate owners of real
estate and corporate net lease financing. Mr. Lodge was a founder of American
Corporate Real Estate, a corporate net lease fund which was acquired by iStar
Financial Inc. in 2000. Prior to that, Mr. Lodge was a managing director and
member of the board of directors of W.P. Carey & Co., Inc., a real estate
investment bank. Mr. Lodge graduated from Harvard College in 1978 and Harvard
Business School in 1983.

      Jonathan Brodie has been a member of our Board of Directors since June 6,
2006. Mr. Brodie is the principal of JMB Associates, a privately-owned money
management firm, and has served as a consultant to (since 2001), and a director
of (since 2005), a holding company for a global investment manager. From
1988-2000, Mr. Brodie was a portfolio manager for JMB Associates, managing
individual and institutional accounts. Prior to that, Mr. Brodie served as an
Investment Analyst and Portfolio Manager for T. Rowe Price Associates, and as an
Investment Analyst for Allan Gray Investment Council. Mr. Brodie serves on the
Board of Regents of the Hebrew University of Jerusalem and the International
Advisory Board of the Melton Centre of the Hebrew University of Jerusalem. Mr.
Brodie is a Board member of MaAfrika Tikkun, USA, on the Executive Committee for
the Partnership for Jewish Life and Learning, and is a Wexner Heritage Fellow.
Mr. Brodie graduated with a BBusSci and BA (Hons., Econ.) in 1978 and 1979,
respectively, from Cape Town University, South Africa. He received his MBA from
Stanford University in 1984, and was an Arjay Miller Scholar. Mr. Brodie is a
Chartered Financial Analyst.


                                       10
<PAGE>

      Our board of directors is divided into three classes with only one class
of directors being elected in each year and each class serving a three-year
term. The term of office of the first class of directors, consisting of Scott
Bravener, will expire at our first annual meeting of stockholders. The term of
office of the second class of directors, consisting of Isaac Kier and Jonathan
Brodie, will expire at the second annual meeting. The term of office of the
third class of directors, consisting of Laurence S. Levy and H. Cabot Lodge III,
will expire at the third annual meeting.

Section 16(a) Beneficial Ownership Reporting Compliance

      Section 16(a) of the Securities Exchange Act of 1934 requires our
officers, directors and persons who own more than ten percent of a registered
class of our equity securities to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Officers, directors and
ten percent stockholders are required by regulation to furnish us with copies of
all Section 16(a) forms they file. Based solely on copies of such forms received
or written representations from certain reporting persons that no Form 5s were
required for those persons, we believe that all filing requirements applicable
to our officers, directors and greater than ten percent beneficial owners were
complied with during the fiscal year ended March 31, 2006, with one exception:
the Form 3 for Joseph W. McHugh, Jr. was filed outside of the required reporting
period.

Code of Ethics

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

ITEM 10. EXECUTIVE COMPENSATION

      During the three month transitional period ended March 31, 2006, other
than $7,500 per-month paid by Rand to ProChannel Management, an affiliate of
Laurence S. Levy for providing Rand with office space and certain office and
secretarial services, no compensation of any kind, including finders and
consulting fees, was paid to any of our executive officers or directors, or any
of their respective affiliates, for services rendered to Rand or any of its
subsidiaries.

      On June 6, 2006, the Board of Directors appointed Edward Levy as Rand's
President. The Company has not entered into a written agreement with respect to
Mr. Levy's employment but does expect to upon final determination and approval
by our Compensation Committee of Mr. Levy's compensation and other employment
terms. The proposed terms of Mr. Levy's employment include the issuance to Mr.
Levy of warrants to purchase our common stock as an inducement to accept the
position as our President, and the issuance of additional warrants in lieu of
cash compensation for the first year of Mr. Levy's employment. The warrants
proposed to be issued to Mr. Levy would be issued pursuant to the Warrant
Compensation Program described below, subject to adoption of such program by our
Compensation Committee. Mr. Levy will not be involved in our operating
subsidiaries' day-to-day operating activities and he will not be required to
devote all of his business time and attention to his role as our President. In
that regard, Mr. Levy will not be precluded from continuing his involvement with
other business endeavors, both existing and future, subject to certain
procedures we adopt to address potential conflicts of interest that may arise as
a result of such arrangement.

      On May 1, 2006, the Board of Directors appointed Joseph W. McHugh, Jr. as
our Chief Financial Officer. We have not entered into a written agreement with
respect to Mr. McHugh's employment but have agreed that Mr. McHugh will receive
an annual base salary of $137,500 and be eligible to receive an annual bonus
targeted at 40% of his base salary based on achieving certain performance
targets to be determined in the future by our Board of Directors.


                                       11
<PAGE>

      Warrant Compensation Program

      The Board of Directors of Rand has submitted to the Compensation Committee
a proposal to adopt a Warrant Compensation Program providing for awards to
senior management of Rand and its subsidiaries, and to non-executive directors
of Rand, of warrants to purchase common stock of Rand that are identical to
those warrants included in the Units issued in the Company's initial public
offering.

      The proposed program provides that, other than with respect to awards to
non-executive board members, the terms of the awards will require that, in the
event that the recipient's employment is terminated (other than as a result of
death or permanent disability) (a) prior to the three month anniversary of the
grant date, then the recipient will be required to pay to the Company an amount
equal to the greater of (i) the value of the warrants issued to the recipient on
the date of grant, (ii) the value of the warrants on the date of termination of
employment, and (iii) the value of the warrants on the date they are sold or
exercised, if sold or exercised prior to termination of employment (the greater
of (i), (ii) or (iii) being the "Payment Amount"), (b) on and after the three
month anniversary and prior to the six month anniversary of the grant date, then
the recipient will be obligated to pay to the Company an amount equal to three
quarters of the Payment Amount, (c) on and after the six month anniversary and
prior to the nine month anniversary of the grant date, then the recipient will
be obligated to pay the Registrant an amount equal to one-half of the Payment
Amount and (d) on and after the nine month anniversary and prior to the one-year
anniversary of the grant date, then the recipient will be obligated to pay to
the Company an amount equal to one-quarter of the Payment Amount. Similarly, any
award to Edward Levy as an inducement to serve as President of the Registrant,
as described above, will subject Mr. Levy to semi-annual pro-rata payment
obligations extending though October 15, 2008 in the event of termination of his
employment (other than as a result of death or permanent disability) prior to
such time. In all cases, a recipient's Payment Amount obligation may be
satisfied by delivery of securities of the Company with a market value equal to
the Payment Amount obligation.

      The proposed program currently is under consideration by the Compensation
Committee.

      Management Bonus Program

      On March 3, 2006, in connection with the closing of the acquisition of
Lower Lakes, Rand adopted a management bonus program, the participants of which
are Scott Bravener, James Siddall, Mark Rohn, Jeffrey Botham, Anthony Walker,
Robert Pierson, Frank Bravener, Dave Scruton and John Carlson, each of whom are
employed by Lower Lakes or its affiliates.

      Participants are eligible to receive awards based on a formula that
adjusts an aggregate initial plan account balance of $3,000,000 by audited
earnings before interest, taxes, depreciation and amortization for fiscal years
2007 and 2008. Awards will be settled on July 31, 2008 and may be settled in
cash and/or shares of Rand's common stock, or any combination thereof, all in
the discretion of the plan administrator, and shall be subject to a cap which
limits appreciation of the initial plan account balance to the percentage
increase in the market price of Rand's common stock between the closing date and
the award settlement date. Subject to a participant's separation from service of
Rand, on each of March 31, 2006, 2007 and 2008, each participant then employed
by Rand or one of its affiliates shall vest into one-third of such participant's
plan account balance. Rand shall grant registration rights to any participant
that is issued shares of Rand's common stock in settlement of an award under the
Management Bonus Program.

      If a participant's service with Rand or its affiliates is terminated by
Rand for cause (as defined in the Program) or by the participant voluntarily
without notice (other than for good reason, as defined in the participant's
employment agreement, if applicable), then such participant's rights to his plan
account balance, including any vested amounts, shall be forfeited, and such
participant shall no longer have any rights in or to its plan account balance or
under the Management Bonus Program.


                                       12
<PAGE>

      A participant who incurs a voluntary separation from service with Rand or
its affiliate (other than for good reason) and provides appropriate notice to
Rand of such separation, shall retain his rights in his plan account balance to
the extent such has vested as of the effective date of separation, but shall, as
of such effective date, cease to further vest in such participant's plan account
balance. Any unvested portion of a participant's plan account balance resulting
from such a separation from service shall be added to the plan account balances
of each then remaining participant in proportion to the respective plan account
balance of each such remaining participant, and with respect to each such
remaining participant, in proportion to each such participant's vested and
unvested plan account balance.

      If a participant's service with Rand or its affiliate is terminated by
Rand without cause (as defined in the Program) or by the participant for good
reason or for death or disability, then the participant is entitled to be
considered fully vested with respect to the participant's plan account balance;
and have the option to elect to freeze the amount of such participant's award as
of the date of such separation from service, but with payment of such amount not
being made until July 31, 2008.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following table sets forth information regarding the beneficial
ownership of Rand's common stock as of July 14, 2006 by:

      o     each person known by Rand to be the beneficial owner of more than 5%
            of Rand's outstanding shares of common stock;

      o     each of Rand's officers and directors; and

      o     all of Rand's officers and directors as a group.

      Unless otherwise indicated, Rand believes that all persons named in the
table have sole voting and investment power with respect to all shares of common
stock beneficially owned by them.

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


                                       13
<PAGE>

<TABLE>
<CAPTION>
                                                                   Amount and
                                                                    Nature of
                                                                   Beneficial         Percent of
Name and Address of Beneficial Owner(1)                             Ownership            Class
--------------------------------------------------------------    -------------     --------------

<S>                                                                <C>                   <C>
Laurence S. Levy                                                   1,594,286(2)          24.9%

Rand Management LLC                                                  794,286(2)          14.2%

Isaac Kier(3)                                                        957,000(4)          15.4%

Kier Family, L.P.(3)                                                 300,000(5)           5.2%

David M. Knott(6)                                                  3,487,177(7)          41.9%
Dorset Management Corporation

Hummingbird Management, LLC(8)                                       509,100(9)           9.0%

MHR Capital Partners Master Account LP(10)                         1,449,080(11)         21.9%

MHR Advisors LLC(10)                                               1,640,652(12)         24.3%
MHR Fund Management LLC
Mark H. Rachesky, M.D

Sapling, LLC(13)                                                     335,000(14)          6.0%

Amaranth Global Equities Master Fund Limited(15)                     300,000(16)          5.4%
Amaranth Advisors L.L.C
Nicholas M. Maounis

Bay Resources Partners L.P.(17)                                    1,209,677(18)         17.7%
Bay II Resources Partners L.P.
Bay Resources Partners Offshore Fund Ltd.
Thomas E. Claugus

Potomac Capital Management LLC (19)                                  296,900(20)          5.3%
Potomac Capital Management Inc.
Paul J. Solit

Scott Bravener(21)                                                        --               --%

Edward Levy                                                          100,000(22)          1.8%

Joseph W. McHugh, Jr.(23)                                                 --               --%

H. Cabot Lodge III(24)                                                    --               --%

Jonathan Brodie(25)                                                       --               --%

All directors and executive officers as a group (7 individuals)    2,651,286(26)         37.6%
</TABLE>


                                       14
<PAGE>

(1)   Unless otherwise indicated, the business address of each of the following
      is 450 Park Avenue, 10th Floor, New York, New York 10022.

(2)   Represents 794,286 shares of common stock held by Rand Management LLC of
      which the sole member is the Laurence Levy Irrevocable Trust, a trust
      established for the benefit of Mr. Levy's three minor children. Mr. Levy
      is the trustee for the trust. Includes 800,000 shares of common stock
      issuable upon exercise of warrants held by Mr. Levy. This information was
      based on a Schedule 13D filed with the Securities and Exchange Commission
      on March 30, 2006.

(3)   The business address of both Mr. Kier and Kier Family, L.P. is Coqui
      Capital Partners, L.P., 1775 Broadway, Suite 604, New York, New York
      10019.

(4)   In addition to shares held directly, includes 17,000 shares of common
      stock held by Mr. Kier's wife and 100,000 shares of common stock held
      through a Kier Family, L.P. of which Mr. Kier is the general partner. Also
      includes 607,000 shares of common stock issuable upon exercise of
      warrants. This information was based on a Schedule 13D filed with the
      Securities and Exchange Commission on March 30, 2006.

(5)   Represents 100,000 shares of common stock and 200,000 shares of common
      stock issuable upon exercise of warrants. This information was based on a
      Schedule 13D filed with the Securities and Exchange Commission on March
      30, 2006.

(6)   The business address of Mr. Knott and Dorset Management Corporation is 485
      Underhill Boulevard, Suite 205, Syosett, New York 11791.

(7)   This information is based on (i) a Schedule 13D filed with the Securities
      and Exchange Commission on March 16, 2006. Includes 1,505,000 shares of
      common stock issuable upon exercise of warrants and 1,209,677 shares of
      common stock issuable upon conversion of 150,000 shares of Series A
      convertible preferred stock.

(8)   The business address of Hummingbird Management, LLC is 460 Park Avenue,
      12th Floor, New York, New York 10022.

(9)   The foregoing information was derived from a Schedule 13D/A filed with the
      Securities and Exchange Commission on November 3, 2005.

(10)  The business address of these entities and this individual is 40 West 57th
      Street, 24th Floor, New York, New York 10019.

(11)  This information is based on (i) a Schedule 13D filed with the Securities
      and Exchange Commission on March 10, 2006. Comprised of 429,373 shares of
      Common Stock and 1,019,707 shares of Common Stock issuable upon exercise
      of warrants.

(12)  This information is based on a Schedule 13D filed with the Securities and
      Exchange Commission on March 10, 2006. Comprised of (i) 429,373 shares of
      Common Stock held for the account of MHR Capital Partners Master Account
      LP; (ii) 1,019,707 shares of common stock issuable upon exercise of
      warrants held for the account of MHR Capital Partners Master Account LP;
      (iii) 53,027 shares of Common Stock held for the account of MHR Capital
      Partners (100); and (iv) 138,545 shares of Common Stock issuable upon
      exercise of warrants held for the account of MHR Capital Partners (100).
      MHR Advisors LLC is the general partner of MHR Capital Partners Master
      Account LP and MHR Capital Partners (100). Dr. Rachesky is the managing
      member of MHR Advisors LLC. MHR Fund Management LLC is the management
      company for MHR Capital Partners Master Account LP and MHR Capital
      Partners (100).


                                       15
<PAGE>

(13)  The business address of Sapling, LLC is 535 Fifth Avenue, 31st Floor, New
      York, New York 10017.

(14)  This information was derived from a Schedule 13G filed with the Securities
      and Exchange Commission on March 31, 2005.

(15)  The business address of these entities and individuals is c/o Amaranth
      Advisors L.L.C., One American Lane, Greenwich, Connecticut 06831.

(16)  This information was derived from a Schedule 13G filed with the Securities
      and Exchange Commission on February 10, 2006.

(17)  The business address of these entities and this individual is 2100
      RiverEdge Pkwy, Suite 840, Atlanta GA 30328. This information is based on
      the number of shares of Rand's series A convertible preferred stock issued
      to such entities. Information as to the beneficial ownership of these
      shares is not available at the time of this report.

(18)  Comprised of 1,209,677 shares underlying Rand's series A convertible
      preferred stock. This information is based on the number of shares of
      Rand's series A convertible preferred stock issued to such entities.
      Information as to the beneficial ownership of these shares is not
      available at the time of this report.

(19)  The business address of these entities is 825 Third Avenue, 33rd Floor New
      York, New York 10022.

(20)  This information was derived from a Schedule 13G filed with the Securities
      and Exchange Commission on July 10, 2006

(21)  The business address for Mr. Bravener is 517 Main Street Port Dover,
      Ontario Canada NOA 1NO.

(22)  Includes 50,000 shares of common stock underlying warrants, which warrants
      became exercisable on March 3, 2006. Also includes 50,000 shares of common
      stock which Mr. Levy has agreed to acquire upon expiration of restrictions
      on transfer applicable to such shares. This information was derived from a
      Form 3 filed with the Securities and Exchange Commission on June 8, 2006.

(23)  The business address for Mr. McHugh is 5 Minuteman Drive, Chelmsford,
      Massachusetts 01824.

(24)  The business address for Mr. Lodge is 475 Fifth Avenue, Suite 1105, New
      York, New York 10017.

(25)  The business address for Mr. Brodie is 10907 Brewer House Road, Rockville,
      Maryland 20852.

(26)  Include 1,507,000 shares of common stock issuable upon exercise of
      warrants which warrants became exercisable on March 3, 2006.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      In June 2004, we issued 875,000 shares of our common stock to the
following initial stockholders of Rand for $25,000 in cash, at an average
purchase price of approximately $0.029 per share as set forth below:


                                       16
<PAGE>

Name                            Number of Shares    Relationship to Us

Laurence S. Levy                    395,000         Chairman of the Board and
                                                    Chief Executive Officer

Natalie Lynn Levy                   100,000         Stockholder
Irrevocable Trust

Michael Benjamin Levy               100,000         Stockholder
Irrevocable Trust

Jessica Rose Levy                   100,000         Stockholder
Irrevocable Trust

Isaac Kier                           87,500         Director

Falcon Partners Holdings, LLC        87,500         Affiliate of former Director

Jane Levy                             5,000         Stockholder

      Each of Laurence S. Levy, the Natalie Lynn Levy Irrevocable Trust, Michael
Benjamin Levy Irrevocable Trust and Jessica Rose Levy Irrevocable Trust
subsequently transferred their shares to Rand Management LLC, an entity of which
the sole member is the Laurence Levy Irrevocable Trust, a trust established for
the benefit of Laurence Levy's three minor children. In October 2004, Rand's
Board of Directors authorized a stock dividend of 0.1428571 shares of common
stock for each outstanding share of common stock, effectively lowering the
purchase price to approximately $0.025 per share.

      Pursuant to an escrow agreement between Rand, Rand's initial stockholders
and Continental Stock Transfer & Trust Company, all of the shares owned by
Rand's initial stockholders were placed in escrow, with Continental acting as
escrow agent, pursuant to an escrow agreement, until the earliest of:

      o     October 27, 2007;

      o     Rand's liquidation; or

      o     the consummation of a liquidation, merger, stock exchange or other
            similar transaction which results in all of Rand's stockholders
            having the right to exchange their shares of common stock for cash,
            securities or other property subsequent to Rand's consummating a
            business combination with a target business.

      During the escrow period, these shares cannot be sold, but the initial
stockholders will retain all other rights as stockholders, including, without
limitation, the right to vote their shares of common stock and the right to
receive cash dividends, if declared. If dividends are declared and payable in
shares of common stock, such dividends will also be placed in escrow. If Rand
was unable to effect a business combination and required to liquidate, none of
Rand's initial stockholders would have received any portion of the liquidation
proceeds with respect to common stock owned by them prior to Rand's initial
public offering.

      Rand also entered into a registration rights agreement with the initial
stockholders pursuant to which the holders of the majority of the initial
stockholders' shares will be entitled to make up to two demands that Rand
register these shares. The holders of the majority of these shares may elect to
exercise these registration rights at any time after the date on which these
shares of common stock are released from escrow. In addition, these stockholders
have certain "piggy-back" registration rights on registration statements filed
subsequent to the date on which these shares of common stock are released from
escrow. Rand will bear the expenses incurred in connection with the filing of
any such registration statements.


                                       17
<PAGE>

      Each of Rand's initial stockholders also entered into a letter agreement
with Rand and EarlyBirdCapital with respect to certain matters prior to Rand's
initial business combination, including the agreement of each to vote all of his
Shares in accordance with the majority of the shares issued in Rand's initial
public offering in connection with a solicitation of stockholder approval of an
initial business combination.

      ProChannel Management LLC, an affiliate of Laurence S. Levy, Chairman of
Rand's Board and Chief Executive Officer, has agreed that, through the
acquisition of a target business, it will make available to Rand a small amount
of office space and certain office and secretarial services, as Rand may require
from time to time. Rand has agreed to pay ProChannel Management $7,500 per month
for these services. ProChannel is not obligated to continue to provide such
office space and services to us, and there can be no assurance as to whether, or
for how long, ProChannel will continue to make such office space available.

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

      Rand will reimburse its officers and directors for any reasonable
out-of-pocket business expenses incurred by them in connection with certain
activities on Rand's behalf such as identifying and investigating possible
target businesses and business combinations.

      All ongoing and future transactions between Rand and any of its officers
and directors or their respective affiliates, will be on terms believed by Rand
to be no less favorable than are available from unaffiliated third parties and
will require prior approval in each instance by a majority of the members of
Rand's Board who do not have an interest in the transaction.

ITEM 13. EXHIBITS.

The following Exhibits are filed as part of this report.

Exhibit No.       Description
-----------       -----------

   2.1            Stock Purchase Agreement, dated as of September 2, 2005, among
                  Rand Acquisition Corporation, LLP, Acquisition Corp. and the
                  stockholders of Lower Lakes Towing Ltd. (Omitted: Appendices-
                  Seller Disclosure Schedule and Purchase Seller Disclosure
                  Schedule; Exhibits - 1) Allocation among Sellers, 2)
                  Employment Agreement, 3) Escrow Agreement, 4) Release, 5)
                  Opinion of Sellers' Counsel, 6) Opinion of Rand's and
                  Purchaser's Counsel, 7) Section 116 Escrow Agreement, 8)
                  Company Indebtedness, 9) Seller's Addresses, 10) Working
                  Capital Statement, 11) Management Bonus Program, 12) Sellers
                  Several Liability Allocation, 13) Financing Commitments (filed
                  separately), 14) Bonus Program Participant Agreement and 15)
                  Redemption Agreement). (1)

   2.2            Amendment to Stock Purchase Agreement, dated December 29,
                  2005. (2)

   2.3            Amendment to Stock Purchase Agreement, dated January 27, 2006.
                  (3)

   2.4            Amendment to Stock Purchase Agreement, dated February 27,
                  2006. (4)

   3.1            Certificate of Incorporation. (5)

   3.1.1          Amended and Restated Certificate of Incorporation, filed with
                  the Secretary of State of the State of Delaware on March 3,
                  2006.(7)

   3.1.2          Certificate of Designations, filed with the Secretary of State
                  of the State of Delaware on March 3, 2006.(7)

   3.2.1          By-laws. (5)

   3.2.2          Amended By-laws.(8)

   4.1            Specimen Unit Certificate. (5)

   4.2            Specimen Common Stock Certificate. (5)


                                       18
<PAGE>

   4.3            Specimen Warrant Certificate. (5)

   4.4            Form of Unit Purchase Option granted to EarlyBirdCapital, Inc.
                  (5)

   4.5            Form of Warrant Agreement between Continental Stock Transfer &
                  Trust Company and the Registrant. (5)

   10.1           Letter Agreement among the Registrant, EarlyBirdCapital, Inc.
                  and Laurence S. Levy. (5)

   10.2           Letter Agreement among the Registrant, EarlyBirdCapital, Inc.
                  and Isaac Kier. (1)

   10.3           Letter Agreement among the Registrant, EarlyBirdCapital, Inc.
                  and Sandeep D. Alva. (5)

   10.4           Letter Agreement among the Registrant, EarlyBirdCapital, Inc.
                  and Falcon Partners Holdings, LLC. (5)

   10.5           Letter Agreement among the Registrant, EarlyBirdCapital, Inc.
                  and Natalie Lynn Levy Irrevocable Trust. (5)

   10.6           Letter Agreement among the Registrant, EarlyBirdCapital, Inc.
                  and Michael Benjamin Levy Irrevocable Trust. (5)

   10.7           Letter Agreement among the Registrant, EarlyBirdCapital, Inc.
                  and Jessica Rose Levy Irrevocable Trust. (5)

   10.8           Letter Agreement among the Registrant, EarlyBirdCapital, Inc.
                  and Jane Levy. (5)

   10.9           Form of Investment Management Trust Agreement between
                  Continental Stock Transfer & Trust Company and the Registrant.
                  (5)

   10.10          Form of Stock Escrow Agreement between the Registrant,
                  Continental Stock Transfer & Trust Company and the Founders.
                  (5)

   10.11          Form of Letter Agreement between ProChannel Management LLC and
                  Registrant regarding administrative support. (5)

   10.12          Promissory Note, dated June 10, 2004, in the principal amount
                  of $70,000 issued to Laurence S. Levy. (5)

   10.13          Registration Rights Agreement among the Registrant and the
                  Founders. (5)

   10.14          Form of Warrant Purchase Agreements among each of Laurence S.
                  Levy, Isaac Kier and Sandeep D. Alva and EarlyBirdCapital,
                  Inc. (5)

   10.15          Letter Agreement among the Registrant, EarlyBirdCapital, Inc.
                  and Rand Management LLC. (5)

   10.16          Preferred Stock Purchase Agreement, dated September 2, 2005,
                  by and between Knott Partners LP, Matterhorn Offshore Fund
                  Ltd., Anno LP, Good Steward Fund Ltd., Bay II Resources
                  Partners, Bay Resource Partners L.P., Bay Resource Partners
                  Offshore Fund Ltd., Thomas E. Claugus and Rand Acquisition
                  Corporation. (1)

   10.17          Financing Commitment, dated August 22, 2005, between GE
                  Commercial & Industrial Finance, Inc. and Rand Acquisition
                  Corporation. (1)

   10.18          Credit Agreement, dated as of March 3, 2006, among Lower Lakes
                  Towing Ltd., Lower Lakes Transportation Company, Grand River
                  Navigation Company, Inc, the other Credit Parties signatory
                  hereto, General Electric Capital Corporation as a US Lender
                  and as Agent for the Secured Parties and the other Lenders
                  signatory hereto from time to time, and GE Canada Finance
                  Holding Company, as a Canadian Lender and the other Lenders
                  signatory hereto from time to time.(7)

   10.19          Employment Agreement, dated March 3, 2006, between Scott
                  Bravener and Rand Acquisition Corporation.(7)

   10.20          Employment Agreement, dated March 3, 2006, between James
                  Siddall and Rand Acquisition Corporation.(7)

   10.21          Management Bonus Plan, dated March 3, 2006.(7)

   14             Code of Ethics. (6)

   21             Subsidiaries of Rand. (9)

   23.1           Consent of Grant Thornton LLP, independent registered
                  chartered accounting firm.

   23.2           Consent of Goldstein Golub Kessler LLP, independent registered
                  public accounting firm.

   31.1           Certification of Chief Executive Officer pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002.(9)


                                       19
<PAGE>

   31.2           Certification of Chief Financial Officer pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002.(9)

   32.1           Certification of Chief Executive Officer pursuant to Section
                  906 of the Sarbanes-Oxley Act of 2002.(9)

   32.2           Certification of Chief Financial Officer pursuant to Section
                  906 of the Sarbanes-Oxley Act of 2002.(9)

   99.1           Risk Factors to Transitional Report of Form 10-KSB for period
                  ending March 31, 2006.(9)

(1)   Incorporated by reference to the Registrant's Amended Quarterly Report on
      Form 10-QSB/A, filed with the Securities and Exchange Commission on
      January 20, 2006.

(2)   Incorporated by reference to the Registrant's Current Report on Form 8-K,
      filed with the Securities and Exchange Commission on January 3, 2006.

(3)   Incorporated by reference to the Registrant's Current Report on Form 8-K,
      filed with the Securities and Exchange Commission on January 31, 2006.

(4)   Incorporated by reference to the Registrant's Current Report on Form 8-K,
      filed with the Securities and Exchange Commission on March 1, 2006.

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

(6)   Incorporated by reference to the Registrant's Annual Report on Form
      10-KSB, filed with the Securities and Exchange Commission on March 31,
      2005.

(7)   Incorporated by reference to the Registrant's Current Report on Form 8-K,
      filed with the Securities and Exchange Commission on March 9, 2006.

(8)   Incorporated by reference to the Registrant's Current Report on Form 8-K,
      filed with the Securities and Exchange Commission on June 6, 2006.

(9)   Filed herewith.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

      Until May 22, 2006, the firm of Goldstein Golub Kessler LLP ("GGK") acted
as our principal accountant. Through September 30, 2005, GGK had a continuing
relationship with American Express Tax and Business Services Inc. (TBS), from
which it leased auditing staff who were full time, permanent employees of TBS
and through which its partners provide non-audit services. Subsequent to
September 30, 2005, this relationship ceased and the firm established a similar
relationship with RSM McGladrey, Inc. ("RSM"). GGK has no full time employees
and therefore, none of the audit services performed were provided by permanent
full-time employees of GGK. GGK manages and supervises the audit and audit
staff, and is exclusively responsible for the opinion rendered in connection
with its examination.

      Since May 25, 2006, the firm of Grant Thornton LLP has acted as our
principal accountant. The following is a summary of fees paid or to be paid to
GGK, RSM and Grant Thornton LLP for services rendered.

Audit Fees

      During the fiscal year ended December 31, 2004, we paid our principal
accountant $25,000 for the services they performed in connection with our
initial public offering, including the financial statements included in the
Current Report on Form 8-K filed with the Securities and Exchange Commission on
November 2, 2004; $2,000 in connection with the review of our Quarterly Reports
on Form 10-QSB, and $10,000 in connection with the December 31, 2004 audit and
10-KSB.

      During the fiscal year ended December 31, 2005, we paid or expect to pay
our principal accountant $22,500 for the services they performed in connection
with the December 31, 2005 audit and 10-KSB and the financial statements
included in the Current Report on Form 8-K filed with the Securities and
Exchange Commission on March 9, 2006; $19,000 in connection with the reviews of
our Quarterly Reports on Form 10-QSB, and $3,000 in connection with the December
31, 2004 10-K/A.


                                       20
<PAGE>

Audit-Related Fees

      During the three month transitional period ended March 31, 2006, our
principal accountant did not render assistance and related services reasonably
related to the performance of the audit or review of financial statements.

Tax Fees

      During the three month transitional period ended March 31, 2006, the
Company expects to pay tax fees of $10,000 for tax consulting services and
$40,000 for services rendered with respect to the Company's tax returns.

All Other Fees

      During the three month transitional period ended March 31, 2006, there
were no fees billed for products and services provided by the principal
accountant other than those set forth above.


                                       21
<PAGE>

                                   SIGNATURES

      Pursuant to the requirements of the Section 13 or 15 or 15(d) of the
Securities Exchange Act of 1934, as amended, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized
on the 11th day of September 2006.

                                           RAND LOGISTICS, INC.


                                           By: /s/ Laurence S. Levy
                                               ---------------------------------
                                               Laurence S. Levy
                                               Chairman of the Board and
                                               Chief Executive Officer
                                               (Principal Executive and
                                               Financial and Accounting Officer)

In accordance with the Securities Exchange Act of 1934, as amended, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.

Name                                      Title                        Date


/s/ Laurence S. Levy            Chairman of the Board and     September 11, 2006
---------------------------     Chief Executive Officer
Laurence S. Levy                (Principal Executive
                                Officer)


/s/ Edward Levy                 President                     September 11, 2006
---------------------------
Edward Levy


/s/ Joseph W. McHugh, Jr.       Chief Financial Officer       September 11, 2006
---------------------------     (Principal Financial and
Joseph W. McHugh, Jr.           Accouting Officer)


/s/ Isaac Kier                  Director                      September 11, 2006
---------------------------
Isaac Kier


/s/ Scott Bravener              Director                      September 11, 2006
---------------------------
Scott Bravener


/s/ H. Cabot Lodge, III         Director                      September 11, 2006
---------------------------
H. Cabot Lodge, III


/s/ Jonathan Brodie             Director                      September 11, 2006
---------------------------
Jonathan Brodie


                                       22
<PAGE>

REPORT OF INDEPENDENT REGISTERED CHARTERED ACCOUNTING FIRM

Board of Directors and
Shareholders of Rand Logistics, Inc.

We have audited the accompanying consolidated balance sheet of Rand Logistics,
Inc. (a Delaware corporation) and subsidiaries as of March 31, 2006, and the
related consolidated statements of operations, stockholders' equity and
comprehensive income (loss), and cash flows for the three month period ended
March 31, 2006. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Rand Logistics, Inc.
and subsidiaries as of March 31, 2006, and the results of its operations and its
cash flows for the three month period ended March 31, 2006 in conformity with
accounting principles generally accepted in the United States of America.


/s/ GRANT THORNTON LLP

GRANT THORNTON LLP
Hamilton, Canada

July 12, 2006


                                      F-1
<PAGE>

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
Rand Logistics, Inc. (formerly Rand Acquisition Corporation)

We have audited the accompanying consolidated balance sheets of Rand
Logistics,Inc. (formerly Rand Acquisition Corporation) and Subsidiaries (a
development stage company) as of December 31, 2005 and 2004, and the related
consolidated statements of operations, stockholders' equity and cash flows for
the year ended December 31, 2005 and the period from June 2, 2004 (date of
inception) to December 31, 2004. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Rand
Logistics, Inc. and Subsidiaries as of December 31, 2005 and 2004 and the
results of their operations and their cash flows for the year ended December 31,
2005 and the period from June 2, 2004 (inception) to December 31, 2004 in
conformity with U.S. generally accepted accounting principles.

As described in Note 8, on March 3, 2006, Rand Logistics, Inc. acquired the
capital of Lower Lakes Towing Ltd., issued Series A preferred stock and entered
into a senior loan facility.


/s/ GOLDSTEIN GOLUB KESSLER LLP

GOLDSTEIN GOLUB KESSLER LLP
New York, New York

March 3, 2006


                                      F-2
<PAGE>

RAND LOGISTICS, INC. (formerly Rand Acquisition Corporation)
Consolidated Balance Sheets
(U.S. Dollars)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                        Unaudited        December        December
                                                                        March 31,        March 31,          31,             31,
                                                                          2006             2005            2005            2004
                                                                      ------------     ------------    ------------    ------------
<S>                                                                   <C>              <C>             <C>             <C>
ASSETS
CURRENT
    Cash and cash equivalents                                         $  2,574,325     $    726,970    $    176,945    $    802,667
    Investments held in Trust Fund (Note 4)                                     --       23,939,648      24,511,698      23,804,261
    Accounts receivable (Note 5)                                         2,107,282               --              --              --
    Prepaid expenses and other current assets (Note 6)                   1,460,267           39,667          17,815          57,750
    Deferred income taxes (Note 7)                                       1,160,651               --              --              --
-----------------------------------------------------------------------------------------------------------------------------------

Total current assets                                                     7,302,525       24,706,285      24,706,458      24,664,678
PROPERTY AND EQUIPMENT, NET (Note 8)                                    48,160,837               --              --              --
DEFERRED INCOME TAXES (Note 7)                                           9,386,020               --              --              --
DEFERRED DRYDOCK COSTS, NET (Note 9)                                     1,614,173               --              --              --
DEFERRED ACQUISITION COSTS, NET                                                 --               --       2,083,097              --
INTANGIBLE ASSETS, NET (Note 10)                                        13,942,329               --              --              --
GOODWILL (Note 10)                                                       6,362,952               --              --              --
-----------------------------------------------------------------------------------------------------------------------------------

Total assets                                                          $ 86,768,836     $ 24,706,285    $ 26,789,555    $ 24,664,678
===================================================================================================================================

LIABILITIES
CURRENT
    Accounts payable                                                  $  7,617,899     $         --    $         --    $         --
    Accrued liabilities (Note 11)                                        2,615,159           12,000       1,885,644          12,000
    Deferred Interest                                                           --           41,620         155,108          13,645
    Income taxes payable                                                    50,787           11,357          55,523          34,357
    Deferred income taxes (Note 7)                                         405,886               --              --              --
    Current portion of long-term debt  (Note 13)                         1,772,055               --              --              --
    Current portion of long-term capital lease obligation - vessel
    lease (Note 14)                                                      2,108,132               --              --              --
-----------------------------------------------------------------------------------------------------------------------------------

Total current liabilities                                               14,569,918           64,977       2,096,275          60,002
-----------------------------------------------------------------------------------------------------------------------------------

LONG-TERM DEBT  (Note 13)                                               20,378,630               --              --              --
COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION  (Note 15)                          --        4,744,826       4,744,826       4,744,826
ACQUIRED MANAGEMENT BONUS PLAN                                           3,000,000               --              --              --
DEFERRED INCOME TAXES (Note 7)                                          12,063,059               --              --              --
-----------------------------------------------------------------------------------------------------------------------------------

Total liabilities                                                       50,011,607        4,809,803       6,841,101       4,804,828
-----------------------------------------------------------------------------------------------------------------------------------

COMMITMENTS AND CONTINGENCIES (Note 16 and 17)                                  --               --              --              --

STOCKHOLDERS' EQUITY
    Preferred stock, $.0001 par value,
    Authorized 1,000,000 shares, Issued and outstanding 300,000
    shares (Note 18)                                                    14,900,000               --              --              --
    Common stock, $.0001 par value
    Authorized 50,000,000 shares, Issued and outstanding 5,600,000
    shares (Note 18)                                                           560              560             560             560
    Additional Paid-in Capital                                          24,629,291       19,884,465      19,884,465      19,884,465
    Accumulated deficit                                                 (1,426,067)          11,457          63,429         (25,175)
    Accumulated other comprehensive loss (Note 24)                      (1,346,555)              --              --              --
-----------------------------------------------------------------------------------------------------------------------------------

Total stockholders' equity                                              36,757,229       19,896,482      19,948,454      19,859,850
-----------------------------------------------------------------------------------------------------------------------------------

Total liabilities and stockholders' equity                            $ 86,768,836     $ 24,706,285    $ 26,789,555    $ 24,664,678
                                                                      =============================================================
</TABLE>

The accompanying notes are an integral part of these financial statements


                                      F-3
<PAGE>

RAND LOGISTICS, INC. (formerly Rand Acquisition Corporation)
Consolidated Statements of Operations
(U.S. Dollars)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                                                       Inception
                                                                                    Unaudited                           (June 2,
                                                                 Three months      Three months       Year ended        2004) to
                                                                  Ended March       ended March      December 31,       December
                                                                   31, 2006          31, 2005            2005           31, 2004
                                                                 ------------      ------------------------------------------------

<S>                                                              <C>               <C>               <C>               <C>
REVENUE                                                          $  1,730,402      $         --      $         --      $         --
-----------------------------------------------------------------------------------------------------------------------------------

EXPENSES

    Outside voyage charter fees (Note 19)                             531,985                --                --                --
    Vessel operating expenses                                       1,280,408                --                --                --
    Repairs and maintenance                                         1,195,960                --                --                --
    General and administrative                                      1,112,218            68,341           323,702            81,743
    Depreciation                                                      305,492                --                --                --
    Amortization of intangibles                                       120,743                --                --                --
    Gain on foreign exchange                                          (54,364)               --                --                --
-----------------------------------------------------------------------------------------------------------------------------------
                                                                    4,492,442            68,341           323,702            81,743
-----------------------------------------------------------------------------------------------------------------------------------
LOSS BEFORE OTHER INCOME AND EXPENSES AND INCOME
TAXES                                                              (2,762,040)          (68,341)         (323,702)          (81,743)
-----------------------------------------------------------------------------------------------------------------------------------

OTHER INCOME AND EXPENSES

Interest expense (Note 20)                                            151,048                --                --                --
Interest income                                                      (291,719)         (111,973)         (581,555)          (56,568)
-----------------------------------------------------------------------------------------------------------------------------------
                                                                     (140,671)         (111,973)         (581,555)          (56,568)
===================================================================================================================================

(LOSS) INCOME BEFORE INCOME TAXES                                  (2,621,369)           43,632           257,853           (25,175)

(RECOVERY OF) PROVISION FOR INCOME TAXES (Note 7)                  (1,222,290)            7,000           169,249                --
-----------------------------------------------------------------------------------------------------------------------------------

NET (LOSS) INCOME                                                $ (1,399,079)     $     36,632      $     88,604      $    (25,175)
===================================================================================================================================

PREFERRED STOCK DIVIDENDS                                        $     90,417      $         --      $         --      $         --
===================================================================================================================================

NET (LOSS) INCOME APPLICABLE TO COMMON STOCKHOLDERS              $ (1,489,496)     $     36,632      $     88,604      $    (25,175)
===================================================================================================================================

        Net (loss)earnings per share basic (Note 25)             $       (.27)     $        .01      $        .02      $       (.01)
        Net (loss) earnings per share diluted                            (.27)              .01               .02              (.01)
        Weighted average shares - Basic                             5,600,000         5,600,000         5,600,000         2,584,634
        Weighted average shares - Diluted                          16,444,263         5,600,000         5,600,000         2,584,634
        ===========================================================================================================================
</TABLE>

The accompanying notes are an integral part of these financial statements


                                      F-4
<PAGE>

RAND LOGISTICS, INC. (formerly Rand Acquisition Corporation)
Consolidated Statements of Stockholders' Equity and Comprehensive Income (Loss)
(U.S. Dollars)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                          Common Stock                   Preferred Stock
                                      Shares         Amount          Shares          Amount
                                   ------------------------------------------------------------
<S>                                  <C>          <C>                  <C>        <C>
    Shares issued to initial
    stockholders, June 2,
    2004 at $.025 per share          1,000,000    $        100              --    $         --

    Shares issued, net of
    underwriters' discount
    and offering expenses
    (includes 799,600 shares
    subject to possible
    redemption                       4,000,000             400              --              --

    Proceeds of exercise of
    overallotment option by
    underwriters                       600,000              60              --              --

    Proceeds subject to
    possible redemption of
    919,540 shares                          --              --              --              --

    Proceeds from issuance of
    option                                  --              --              --              --

    Net loss                                --              --              --              --
-----------------------------------------------------------------------------------------------

Balances, December 31, 2004          5,600,000             560              --              --
    Net income 3 months ended
    March 31, 2005                          --              --              --              --
-----------------------------------------------------------------------------------------------

Balances, March 31, 2005             5,600,000             560              --              --
    Net income 9 months ended
    December 31, 2005                       --              --              --              --
-----------------------------------------------------------------------------------------------

Balances, December 31, 2005          5,600,000             560              --              --
    Shares issued, net of
    issuance costs of $100,000              --              --         300,000      14,900,000
    Proceeds of 2004 share
    issuance no longer
    subject to possible
    redemption (Note 15)                    --              --              --              --

    Net loss                                --              --              --              --

    Preferred dividend
    issuable                                --              --              --              --
-----------------------------------------------------------------------------------------------

    Translation adjustments                 --              --              --              --
-----------------------------------------------------------------------------------------------

    Comprehensive loss                      --              --              --              --
-----------------------------------------------------------------------------------------------

Balances, March 31, 2006             5,600,000    $        560         300,000    $ 14,900,000
-----------------------------------------------------------------------------------------------

<CAPTION>
                                                                             Accumulated
                                           Additional                           Other                Total
                                             Paid-In        Accumulated     Comprehensive        Stockholders'
                                             Capital           Deficit           Loss              Deficiency
                                           -------------------------------------------------------------------
<S>                                        <C>              <C>              <C>                 <C>
    Shares issued to initial
    stockholders, June 2,
    2004 at $.025 per share                $     24,900     $         --     $         --        $     25,000

    Shares issued, net of
    underwriters' discount
    and offering expenses
    (includes 799,600 shares
    subject to possible
    redemption                               21,310,351               --               --          21,310,751

    Proceeds of exercise of
    overallotment option by
    underwriters                              3,293,940               --               --           3,294,000

    Proceeds subject to
    possible redemption of
    919,540 shares                           (4,744,826)              --               --          (4,744,826)

    Proceeds from issuance of
    option                                          100               --               --                 100

    Net loss                                         --          (25,175)              --             (25,175)
-------------------------------------------------------------------------------------------------------------

Balances, December 31, 2004                  19,884,465          (25,175)              --          19,859,850
    Net income 3 months ended
    March 31, 2005                                   --           36,632               --              36,632
-------------------------------------------------------------------------------------------------------------

Balances, March 31, 2005                     19,884,465           11,457               --          19,896,482
    Net income 9 months ended
    December 31, 2005                                --           51,972               --              51,972
-------------------------------------------------------------------------------------------------------------

Balances, December 31, 2005                  19,884,465           63,429               --          19,948,454
    Shares issued, net of
    issuance costs of $100,000                       --               --               --          14,900,000
    Proceeds of 2004 share
    issuance no longer
    subject to possible
    redemption (Note 15)                      4,744,826               --               --           4,744,826

    Net loss                                         --       (1,399,079)              --          (1,399,079)

    Preferred dividend
    issuable                                         --          (90,417)              --             (90,417)
-------------------------------------------------------------------------------------------------------------

    Translation adjustments                          --               --       (1,346,555)         (1,346,555)
-------------------------------------------------------------------------------------------------------------

    Comprehensive loss                               --               --               --           2,745,634
-------------------------------------------------------------------------------------------------------------

Balances, March 31, 2006                   $ 24,629,291     $ (1,426,067)    $ (1,346,555)       $ 36,757,229
-------------------------------------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of these financial statements


                                      F-5
<PAGE>

RAND LOGISTICS, INC. (formerly Rand Acquisition Corporation)
Consolidated Statements of Cash Flows
(U.S. Dollars)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                      Unaudited
                                                                       Three            Three
                                                                       months           months         Year ended       Year ended
                                                                     Ended March       March 31,        December         December
                                                                      31, 2006           2005           31, 2005         31, 2004
                                                                    ------------     ------------     ------------     ------------
<S>                                                                 <C>              <C>              <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Net (loss) income                                               $ (1,399,079)    $     36,632     $     88,604     $    (25,175)
    Adjustments to reconcile net income (loss) to net cash
            used by operating activities
                Depreciation                                             305,492               --               --               --
                Amortization of intangibles                              120,743               --               --               --
                Deferred income taxes, net of
                amounts acquired                                      (1,071,620)              --               --               --
            Changes in assets and liabilities, net of
            amounts acquired:
                Accounts receivable                                     (105,798)              --               --               --
                Interest accrued on Treasury Bill                             --         (135,387)        (707,436)         (68,261)
                Prepaid expenses and other current
                assets                                                   242,019           18,083           39,935          (57,750)
                Accounts payable and accrued liabilities               2,215,287               --           30,178           12,000
                Income tax payable                                       (90,799)         (23,000)          21,166           34,357
                Deferred interest                                       (155,108)          27,975          141,463           13,645
-----------------------------------------------------------------------------------------------------------------------------------
                                                                          61,137          (75,697)        (386,090)         (91,184)
-----------------------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES
    Purchase of property and equipment                                (1,691,036)              --               --               --
    Purchase price of acquired companies, net of cash
    acquired                                                         (57,230,024)              --               --               --
    Proceeds from (purchase of) investment held in
    trust fund                                                        24,511,698               --               --      (23,736,000)
    Deferred drydock costs                                            (1,628,956)              --               --               --
    Deferred acquisition costs                                         2,083,097               --         (239,632)              --
-----------------------------------------------------------------------------------------------------------------------------------
                                                                     (33,955,221)              --         (239,632)     (23,736,000)
-----------------------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
    Gross proceeds of public offering                                         --               --               --       27,600,000
    Payment of costs of public offering                                       --               --               --       (2,995,249)
    Proceeds from note payable, stockholder                                   --               --               --           70,000
    Payment of note payable, stockholder                                      --               --               --          (70,000)
    Proceeds from sale of shares of common stock                              --               --               --           25,000

    Proceeds from long term debt                                      22,486,142               --               --               --
    Debt financing costs                                                (579,834)              --               --               --

    Proceeds from preferred stock issuance                            15,000,000               --               --               --
    Preferred stock issuance costs                                      (100,000)              --               --
    Proceeds from issuance of option                                          --               --               --              100
-----------------------------------------------------------------------------------------------------------------------------------
                                                                      36,806,308               --               --       24,629,851
-----------------------------------------------------------------------------------------------------------------------------------

EFFECT OF FOREIGN EXCHANGE RATES ON CASH                                (514,844)              --               --               --
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                   2,397,380          (75,697)        (625,722)         802,667
===================================================================================================================================

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                           176,945          802,667          802,667               --
-----------------------------------------------------------------------------------------------------------------------------------

CASH AND CASH EQUIVALENTS, END OF PERIOD                            $  2,574,325     $    726,970     $    176,945     $    802,667
===================================================================================================================================

SUPPLEMENTAL CASH FLOW DISCLOSURE
    Payments for interest                                           $    151,048     $         --     $         --               --
    Accrual of deferred acquisition costs                                     --               --        1,843,465               --
    Payments for income taxes                                            242,600           49,179          160,424               --
</TABLE>

The accompanying notes are an integral part of these financial statements


                                      F-6
<PAGE>

RAND LOGISTICS, INC. (formerly Rand Acquisition Corporation)
Notes to the Consolidated Financial Statements
(U.S. Dollars)
--------------------------------------------------------------------------------

1.    DESCRIPTION OF BUSINESS

      Rand Logistics Inc. (the "Company") is a shipping company engaged in the
      operation of bulk carriers on the Great Lakes. Rand Acquisition
      Corporation was incorporated in Delaware on June 2, 2004 as a blank check
      company whose objective was to acquire an operating business (a "Business
      Combination"). On March 3, 2006, the Company, through its wholly-owned
      subsidiary, LL Acquisition Corp., acquired all of the outstanding shares
      of capital stock of Lower Lakes from Royal Bank of Canada, through its
      operating division RBC Capital Partners, Canadian Imperial Bank of
      Commerce, Universal Insulations Holdings Limited, Norvest Mezzanine Fund
      Limited Partnership, Scott Bravener, Judy Kehoe, Mark Rohn, Victor Roskey
      and Tim Ryan, the shareholders of Lower Lakes, in accordance with the
      terms of the Stock Purchase Agreement, dated September 2, 2005, by and
      among the Company, LL Acquisition Corp. and the stockholders of Lower
      Lakes, as amended. Immediately following completion of the acquisition,
      and in conjunction therewith, LL Acquisition Corp. and Lower Lakes were
      amalgamated under Canadian law and the shares of capital stock of Grand
      River and Lower Lakes Transportation owned by Lower Lakes at the time of
      the amalgamation were transferred to the Company's wholly-owned
      subsidiary, Rand LL Holdings Corp. Upon completion of such transfer, the
      outstanding shares of Grand River not owned by Rand LL Holdings Corp. were
      redeemed in accordance with the terms of the Redemption Agreement, dated
      September 2, 2005, between Grand River and GR Holdings, Inc. Following
      completion of the foregoing transactions, as of March 3, 2006, each of
      Lower Lakes, Grand River and Lower Lakes Transportation became indirect,
      wholly-owned subsidiaries of the Company. In conjunction with the
      foregoing transactions, as of March 3, 2006, the Company, formerly known
      as Rand Acquisition Corporation, changed its name to Rand Logistics Inc.

      In accordance with the terms of the Stock Purchase Agreement and
      Redemption Agreement, respectively, the Company paid US$9,843,748 to the
      selling shareholders of Lower Lakes and US$750,000 to GR Holdings, Inc.,
      and arranged for the repayment of the acquisition closing date
      indebtedness of such entities of Cdn$43,732,749 and US$5,156,945,
      respectively, through capital contributions to Lower Lakes and the
      securing of the new senior loan facility discussed in Item 2.03. The
      amount paid to the Lower Lakes selling shareholders reflects certain
      adjustments made on the acquisition closing date in accordance with the
      Stock Purchase Agreement and such amount is subject to further adjustment
      after the acquisition closing based on the Company's determination of the
      net working capital of Lower Lakes and its affiliates as of January 15,
      2006. The Company funded the acquisition closing date payments with the
      approximately US$24,646,000 of proceeds of its initial public offering
      held in trust, US$15,000,000 of proceeds of the acquisition closing date
      issuance of the Company's newly created series A convertible preferred
      stock, and proceeds of the new senior loan facility entered into on the
      acquisition closing date by Lower Lakes, Grand River and Lower Lakes
      Transportation.

      The purchase price allocation to the fair values of assets and liabilities
      acquired after the existing long-term debt of Lower Lakes is extinguished
      is as follows:

      Purchase price                                               $ 57,730,027
                                                                   ------------

      Cash acquired                                                     500,003
      Current assets                                                  5,008,779
      Capital assets                                                 47,041,519
      Other assets                                                    9,604,923
      Goodwill                                                        6,362,952
      Other identifiable intangible assets                           13,762,868
      Deferred drydock and financing costs                                   --
      Current liabilities                                            (6,545,461)
      Long-term liabilities, including acquired management
      bonus plan                                                    (18,005,556)
                                                                   ------------
                                                                   $ 57,730,027
                                                                   ============

      The Company changed its fiscal year end from December 31 to March 31,
      effective March 3, 2006. This report includes operations for three months
      of Rand, and the activities of the acquired companies described above from
      March 3, 2006 to March 31, 2006.


                                      F-7
<PAGE>

RAND LOGISTICS, INC. (formerly Rand Acquisition Corporation)
Notes to the Consolidated Financial Statements
(U.S. Dollars)
--------------------------------------------------------------------------------

2.    SIGNIFICANT ACCOUNTING POLICIES

      Basis of presentation and consolidation

      The consolidated financial statements are prepared in accordance with
      accounting principles generally accepted in the United States of America
      and include the accounts of Rand LL Holdings Corp., a 100% subsidiary of
      Rand and the accounts Lower Lakes Towing Ltd., Lower Lakes Transportation
      Company Limited and Grand River Navigation Company, Inc., each of which is
      a 100% subsidiary of Rand LL Holdings Corp, and Port Dover Steamship
      Company Limited, a 100% wholly owned subsidiary of Lower Lakes Towing
      Limited.

      The consolidated financial statements include the accounts of the Company
      and all of its wholly-owned subsidiaries. All significant inter-company
      transactions and balances have been eliminated. The assets of the acquired
      subsidiaries have been adjusted to fair values as of the date of
      acquisition and goodwill has been recognized for the difference between
      the purchase price and fair value of the assets acquired for the acquired
      subsidiaries.

      Cash and cash equivalents

      The Company considers all highly liquid investments with an origianl
      maturity of three months or less at the date of purchase to be cash
      equivalents. Cash equivalents are stated at cost which approximates market
      value.

      Accounts receivable and concentration of credit risk

      The majority of the Company's accounts receivable are amounts due from
      customers (86%) with other accounts receivable including insurance and
      Goods and Service Tax refunds accounting for the balance of 14%. The
      majority of accounts receivable are due within 30 to 60 days and are
      stated at amounts due from customers net of an allowance for doubtful
      accounts. Accounts outstanding longer than the contractual payment terms
      are considered past due. The Company does not have an allowance for
      doubtful accounts for any of the periods presented. The company
      historically has no significant bad debts. Interest is not accrued on
      outstanding receivables.

      The Company had one major customer in 2006 and 2005 that accounted for 50%
      and nil% of net sales, respectively.

      Revenue recognition

      The Company generates revenues from freight billings under contracts of
      affreightment (voyage charters) on a rate per ton basis. Voyage charter
      revenue is recognized ratably over the period from the departure of a
      vessel from its original shipping point to its destination, the Company
      has a signed contract of affreightment, the contract price is fixed or
      determinable and collection is reasonably assured. Included in freight
      billings are other fees such as fuel surcharges and other freight
      surcharges, which represent pass-through charges to customers for toll
      fees, lockage fees and ice breaking fees paid to other parties. Fuel
      surcharges are recognized ratably over the voyage, while freight
      surcharges are recognized when the associated costs are incurred. Fuel
      surcharge revenues totaled $196,781 for the 29 days ended March 31, 2006
      (2005 - $nil). Freight surcharges are insignificant and amount to less
      than 1% of total revenues for the years presented.

      The Company subcontracts excess customer demand to other freight
      providers. Service to customers under such arrangements is transparent to
      the customer and no additional services are being provided to customers.
      Consequently, revenues recognized for customers serviced by freight
      subcontractors are recognized on the same basis as described above. In
      addition, revenues are presented on a gross basis in accordance with the
      guidance in EITF 99-19, "Reporting Revenue Gross as a Principal versus Net
      as an Agent." Costs for subcontracted freight providers, presented as
      "Outside voyage charter fees" on the statement of operations are
      recognized ratably over the voyage.

      Fuel and lubricant inventories

      Raw materials, fuel, and operating supplies, are accounted for on a
      first-in, first-out cost method (based on monthly averages). Raw materials
      are stated at the lower of actual cost (first-in, first-out method) or
      market. Operating supplies are stated at actual cost or average cost.


                                      F-8
<PAGE>

RAND LOGISTICS, INC. (formerly Rand Acquisition Corporation)
Notes to the Consolidated Financial Statements
(U.S. Dollars)
--------------------------------------------------------------------------------

2.    SIGNIFICANT ACCOUNTING POLICIES (continued)

      Intangible assets and goodwill

      The Company adopted SFAS No. 141, "Business Combinations"("SFAS 141") and
      SFAS No. 142, "Goodwill and other Intangible Assets ("SFAS 142")." SFAS
      No. 141 requires all business combinations to be accounted for using the
      purchase method of accounting and that certain intangible assets acquired
      in a business combination must be recognized as assets separate from
      goodwill. SFAS No. 142 provides that intangible assets with indefinite
      lives and goodwill will not be amortized but will be tested at least
      annually for impairment and whenever events or changes in circumstances
      indicate that the carrying value of the asset may not be recovered. If the
      asset is impaired, it will be written down to its fair value.

      Intangible assets consist primarily of goodwill, financing costs,
      trademarks, trade names, non-competition agreements and customer
      relationships and contracts and were valued in conjunction with
      establishing the March 3, 2006 purchase price. In accordance with SFAS
      142, the Company reviews goodwill for impairment at least annually using a
      two-step impairment test to first identify potential impairment and then
      to measure the amount of the impairment, if any. In 2006, these tests
      indicated that goodwill was not impaired.

           Trademarks and trade names              10 years straight-line
           Non-competition agreements               4 years straight-line
           Customer relationships and contracts    15 years straight-line

      Property and equipment

      Property and equipment are recorded at cost and have been valued as of the
      date of acquisition. Depreciation methods for capital assets are as
      follows:

            Vessels                          4 - 25 years straight-line
            Leasehold improvements           7 - 12 years straight-line
            Furniture and equipment          20% declining-balance
            Computer equipment               30% declining-balance

      Deferred charges

      Deferred charges include capitalized drydock expenditures and deferred
      financing costs. Drydock costs incurred during statutory Canadian and
      United States certification processes are capitalized and amortized on a
      straight-line basis over the benefit period, which is 60 months. Drydock
      costs include costs of work performed by third party shipyards,
      subcontractors and other direct expenses to complete the mandatory
      certification process. Deferred financing costs are amortized on a
      straight-line basis over the term of the related debt, which approximates
      the effective interest method.

      Impairment of long-lived assets

      Long-lived assets include property, intangible assets subject to
      amortization, and certain other assets. The carrying values of these
      assets are periodically reviewed for impairment or whenever events or
      changes in circumstances indicate that the carrying amounts may not be
      recoverable. We evaluate impairment by comparing the fair value of the
      intangible assets with indefinite lives and goodwill with their carrying
      values. We determine fair value of goodwill using the sum of the
      undiscounted cash flows projected to be generated by the acquired business
      giving rise to that goodwill. This requires us to make long-term forecasts
      of our future revenues and costs related to the assets subject to review.
      These forecasts require assumptions about demand for our services and
      future market conditions. Recoverability of assets to be held and used is
      measured by a comparison of the carrying amount of an asset to estimated
      undiscounted future cash flows expected to result from its use and
      eventual disposition. If the carrying amount of an asset exceeds its
      estimated future cash flows, an impairment charge is recognized for the
      amount by which the carrying value of the asset exceeds its fair value. If
      a readily determinable market price does not exist, fair value is
      estimated using undiscounted expected cash flows attributable to the
      assets.


                                      F-9
<PAGE>

RAND LOGISTICS, INC. (formerly Rand Acquisition Corporation)
Notes to the Consolidated Financial Statements
(U.S. Dollars)
--------------------------------------------------------------------------------

2.    SIGNIFICANT ACCOUNTING POLICIES (continued)

      Repairs and maintenance

      The Company's vessels require repairs and maintenance each year to ensure
      the fleet is operating efficiently during the shipping season. The vast
      majority of repairs and maintenance are completed in January, February and
      March of each year when the vessels are inactive. The Company expenses
      such routine repairs and maintenance costs. Significant repairs to the
      Company's vessels, whether owned or available to the Company under a time
      charter, such as major engine overhauls and hull repairs, are capitalized
      and amortized over the remaining life of the asset repaired, or remaining
      capital lease term, whether it is engine equipment, the vessel or
      leasehold improvements to a vessel leased under time charter agreement.

      Income taxes

      The Company accounts for income taxes in accordance with Statement of
      Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income
      Taxes" ("SFAS 109"). SFAS 109 requires the determination of deferred tax
      assets and liabilities based on the differences between the financial
      statement and income tax bases of tax assets and liabilities, using
      enacted tax rates in effect for the year in which the differences are
      expected to reverse. A valuation allowance is recognized, if necessary, to
      measure tax benefits to the extent that, based on available evidence, it
      is more likely than not that they will be realized.

      Foreign currency translation

      The Company uses the U.S. Dollar as its reporting currency. The functional
      currency of Lower Lakes Towing Ltd. is the Canadian dollar. The functional
      currency of the Company's U.S. subsidiaries is the U.S. Dollar. In
      accordance with Statement of Financial Accounting Standards No. 52,
      "Foreign Currency Translation" ("SFAS 52"), assets and liabilities
      denominated in foreign currencies are translated into U.S. Dollars at the
      rate of exchange at the balance sheet date, while revenue and expenses are
      translated at the weighted average rates prevailing during the respective
      periods. Components of shareholders' equity are translated at historical
      rates. Exchange gains and losses resulting from translation are reflected
      in accumulated other comprehensive loss. Lower Lakes Towing Ltd.s
      functional currency is Canadian dollars, causing the foreign exchange gain
      of $54,364 during the period ending March 31, 2006.

      Advertising costs

      The Company expenses all advertising costs as incurred. These costs are
      included in administration costs and were insignificant during the periods
      presented.

      Benefit plans

      The Company contributes to employee Registered Retirement Savings Plans in
      Canada and 401K plans in the United States. Contributions are expensed in
      operating expenses when incurred. The Company made contributions of $5,933
      in 2006 and $8,243 in 2005.

      Estimates

      The preparation of consolidated financial statements in conformity with
      accounting principles generally accepted in the United States requires
      management to make estimates and assumptions that affect the reported
      amounts of assets and liabilities and disclosure of contingent assets and
      liabilities at the date of the consolidated financial statements and the
      reported amounts of revenue and expenses during the reporting period.
      Significant estimates included in the preparation of these financial
      statements include the assumptions used in determining whether assets are
      impaired and the assumptions used in determining the valuation allowance
      for deferred income tax assets. Actual results could differ from those
      estimates.


                                      F-10
<PAGE>

RAND LOGISTICS, INC. (formerly Rand Acquisition Corporation)
Notes to the Consolidated Financial Statements
(U.S. Dollars)
--------------------------------------------------------------------------------

3.    RECENTLY ISSUED PRONOUNCEMENTS

      Stock-based compensation

      On December 16, 2004, the FASB issued amended SFAS No. 123, "Accounting
      for Share-Based Payment" ("SFAS 123R"). SFAS 123(R) requires all companies
      to use the fair-value based method of accounting for stock-based
      compensation, and is in effect for the Company for its fiscal period
      beginning on April 1, 2006. SFAS 123(R) requires that all companies adopt
      either the modified prospective transition ("MPT") or modified
      retrospective transition ("MRT") method. Stock compensation expense
      calculated using the MPT approach would be recognized on a prospective
      basis in the financial statements over the requisite service period, while
      the MRT method allows a restatement of prior periods for amounts
      previously recorded as pro forma expense. On April 14, 2005, the U.S.
      Securities and Exchange Commission announced the adoption of a rule that
      amended the compliance date of SFAS 123(R). Based on this announcement,
      FAS 123(R) will be effective for the Company's fiscal year beginning on
      April 1, 2006. The Company does not expect that the adoption of this
      standard will have a significant impact on its consolidated financial
      statements.

4.    INVESTMENTS HELD IN TRUST FUND

      Rand established a trust fund for investments held in trust in the event a
      successful transaction was not consummated pursuant to the terms and
      conditions of Rand's initial public offering. On March 3, 2006, those
      funds were utilized to complete the share purchase transaction further
      described in Note 1.

5.    ACCOUNTS RECEIVABLE

      Trade receivables are presented net of an allowance for doubtful accounts.
      The allowance was nil for all periods presented. The allowance for
      doubtful accounts reflects estimates of probable losses in trade
      receivables. The Company manages and evaluates the collectibility of its
      trade receivables as follows. Senior management reviews an aged accounts
      receivable listing on a weekly basis. Contact is made with customers that
      have extended beyond agreed upon credit terms. Senior management and
      operations are notified that when they are contacted by such customers for
      a future delivery to ensure any past due amounts are paid before any
      future cargo is booked for shipment. Customer credit risk is also managed
      by reviewing the history of payments of the customer, the size of the
      customer, the period of time within the shipping season and demand for
      future cargos.

6.    PREPAID EXPENSES AND OTHER CURRENT ASSETS

      Prepaid expenses and other current assets are comprised of the following:

                                          Unaudited
                            March 31,      March 31,  December 31,  December 31,
                              2006           2005         2005          2004
                          ------------  ------------  ------------  ------------

Prepaid insurance         $    540,699  $     33,250  $     16,898  $     47,500
Fuel and lubricants            787,461            --            --            --
Deposits and other
prepaids                       132,107         6,417           917        10,250
--------------------------------------------------------------------------------
                          $  1,460,267  $     39,667  $     17,815  $     57,750
================================================================================


                                      F-11
<PAGE>

RAND LOGISTICS, INC. (formerly Rand Acquisition Corporation)
Notes to the Consolidated Financial Statements
(U.S. Dollars)
--------------------------------------------------------------------------------

7.    INCOME TAXES

      The components of the provision for (recovery of) income taxes are as
      follows:

<TABLE>
<CAPTION>
                                             Unaudited
                         Three months       Three months       Year ended         Year ended
                            ended              ended           December 31,       December 31,
                        March 31, 2006     March 31, 2006         2005               2004
                       ---------------   -----------------   ---------------    ----------------
<S>                    <C>               <C>                 <C>               <C>
Current
  Federal              $      (149,154)  $           4,841   $       104,285   $              --
  State and Local               (1,516)              2,159            64,964                  --
Deferred:

  Federal                     (538,271)                 --                --                  --
  State and Local             (114,596)                 --                --                  --
  Foreign                     (418,753)                 --                --
------------------------------------------------------------------------------------------------
                       $    (1,222,290)  $           7,000   $       169,249   $
================================================================================================
</TABLE>

      The total provision for income taxes differs from that amount which would
      be computed by applying the U.S. Federal income tax rate to income before
      provision for income taxes as follows:

<TABLE>
<CAPTION>
                                                               Unaudited
                                          Three months        Three months       Year ended          Year ended
                                              ended              ended           December 31,        December 31,
                                         March 31, 2006      March 31, 2005         2005                2004
                                         --------------      --------------     ------------         -------------
<S>                                                <C>                 <C>              <C>                   <C>
Statutory federal income tax rate                  34.0%               34.0%            34.0%                 34.0%
State and foreign income taxes                      3.2%               15.2%            16.6%                 15.2%
Valuation allowance                                 9.5%              (33.2%)           15.0%                (49.2%)
------------------------------------------------------------------------------------------------------------------
Effective income tax rate                          46.7%               16.0%            65.6%                  0.0%
==================================================================================================================
</TABLE>


                                      F-12
<PAGE>

RAND LOGISTICS, INC. (formerly Rand Acquisition Corporation)
Notes to the Consolidated Financial Statements
(U.S. Dollars)
--------------------------------------------------------------------------------

7.    INCOME TAXES (continued)

      The significant components of current deferred tax assets and liabilities
      are as follows:

<TABLE>
<CAPTION>
                                        Three months    Three months      Year ended       Year ended
                                      ended March 31,   ended March      December 31,     December 31,
                                            2006          31, 2005           2005             2004
                                       -------------   -------------    -------------    -------------
<S>                                    <C>             <C>              <C>              <C>
Asset:
  Deferred interest income             $          --   $      20,456    $      70,400    $       6,706
  Accrued liabilities not yet
deductible for tax                         1,160,651              --               --               --
  Other                                           --              --            1,100               --
------------------------------------------------------------------------------------------------------
Total deferred tax asset               $   1,160,651   $      20,456    $      71,500    $       6,706

Liability:
  Prepaid expense                                 --          17,510            8,100               --
  Drydock tax reserve                        405,886              --               --               --
------------------------------------------------------------------------------------------------------

Total deferred tax liability           $     405,886   $      17,510    $       8,100    $          --
------------------------------------------------------------------------------------------------------
               Net deferred asset      $     754,765   $       2,946    $      63,400    $       6,706
Valuation allowance                               --          (2,946)         (63,400)          (6,706)
------------------------------------------------------------------------------------------------------
Total Deferred Tax Asset               $     754,765   $          --    $          --    $          --
======================================================================================================
</TABLE>

      The significant components of long-term deferred tax assets and
      liabilities are as follows:

<TABLE>
<CAPTION>
                                                        Unaudited
                                      Three months     Three months     Year Ended       Year Ended
                                          ended           ended         December 31,     December 31,
                                     March 31, 2006  March 31, 2005         2005            2004
                                      -------------   -------------    -------------    -------------
<S>                                   <C>             <C>              <C>              <C>
Long-term deferred tax assets
  Operating loss carry forwards       $   8,444,190   $          --    $          --    $      37,705
  Issuance costs                                             40,983           33,611           43,330
  Other                                          --              --               --          (23,346)
  Unpaid Interest                           941,830              --               --               --
-----------------------------------------------------------------------------------------------------

                                      $   9,386,020   $      40,983    $      33,611    $      57,689
Valuation allowance                              --         (40,983)         (33,611)         (57,689)
-----------------------------------------------------------------------------------------------------

Net long-term deferred tax asset      $   9,386,020   $          --    $          --    $          --
=====================================================================================================

Long-term deferred tax liabilities
  Separately identifiable
  Intangibles                         $   4,792,475   $          --    $          --    $          --
  Depreciation and drydock
  expenses                                7,270,584              --               --               --
-----------------------------------------------------------------------------------------------------

Total Deferred Tax Liability          $  12,063,059   $          --    $          --    $          --
=====================================================================================================

Net Deferred Tax Liability            $   2,677,039   $          --    $          --    $          --
=====================================================================================================
</TABLE>

      The measurement of the aggregate deferred tax assets is adjusted by a
      valuation allowance to recognize tax benefits to the extent that, based on
      available evidence, it is more likely than not that they will be realized.
      Based on the weight of evidence regarding recoverability of the Company's
      tax assets, no valuation allowance for 2006 and a valuation allowance of
      $63,400 for 2005 has been recorded to reduce the net deferred
      tax assets to the estimated amount realizable.


                                      F-13
<PAGE>

RAND LOGISTICS, INC. (formerly Rand Acquisition Corporation)
Notes to the Consolidated Financial Statements
(U.S. Dollars)
--------------------------------------------------------------------------------

7.    INCOME TAXES (continued)

      The Company has combined income tax loss carry forwards of approximately
      $23,394,398 which expire as follows:

                             ---------------------------------------------------
Expiry year                     Canada          United States           Total
                             ---------------------------------------------------
2009                         $ 2,634,902         $        --         $ 2,634,902
2013                           5,272,679                  --           5,272,679
2014                           4,576,985                  --           4,576,985
2015                           3,235,033                  --           3,235,033
2016                           2,786,520                  --           2,786,520
2021                                  --             216,632             216,632
2024                                  --             318,790             318,790
2025                                  --             891,267             891,267
2026                                  --           3,461,590           3,461,590
--------------------------------------------------------------------------------
TOTAL                        $18,506,119         $ 4,888,279         $23,394,398
================================================================================

8.    PROPERTY AND EQUIPMENT

      Property and equipment are comprised of the following:

                                                                    Unaudited
                                                March 31, 2006    March 31, 2005
                                                --------------    --------------
Cost
  Vessels                                        $  39,643,272     $          --
  Vessel under capital lease (Note 14)               7,377,827                --
  Leasehold improvements                             1,387,539                --
  Furniture and equipment                               47,712                --
  Computer equipment                                     9,979                --
--------------------------------------------------------------------------------
                                                 $  48,466,329     $          --
================================================================================
Accumulated depreciation
  Vessels                                        $     253,303     $          --
  Vessel under capital lease (Note 14)                  44,551                --
  Leasehold improvements                                 7,638                --
  Furniture and equipment                                   --                --
  Computer equipment                                        --                --
--------------------------------------------------------------------------------
                                                 $     305,492     $          --
--------------------------------------------------------------------------------
                                                 $  48,160,837     $          --
================================================================================

      The balances at December 31, 2005 and 2004 were nil.


                                      F-14
<PAGE>

RAND LOGISTICS, INC. (formerly Rand Acquisition Corporation)
Notes to the Consolidated Financial Statements
(U.S. Dollars)
--------------------------------------------------------------------------------

9.    DEFERRED DRYDOCK COSTS

      Deferred charges are comprised of the following:

                                                                   Unaudited
                                               March 31, 2006    March 31, 2005
                                              ----------------  ----------------

Drydock expenditures                          $      1,614,173  $             --
Accumulated amortization                                    --                --
                                              ----------------------------------
                                              $      1,614,173  $             --
================================================================================

      The balances at December 31, 2005 and 2004 were nil.

10.   INTANGIBLE ASSETS AND GOODWILL

      Intangibles are comprised of the following:

                                                                   Unaudited
                                                 March 31, 2006  March 31, 2005
                                                ---------------  ---------------

Goodwill                                        $     6,362,952  $            --
================================================================================

Intangible assets
   Deferred financing costs                     $       572,397  $            --
   Trademarks, trade names                              914,968               --
   Non-competition agreements                         2,097,082               --
   Customer Relationships and Contracts              10,478,625               --
--------------------------------------------------------------------------------
   Total Identifiable Intangibles               $    14,063,072  $            --
--------------------------------------------------------------------------------
Accumulated amortization
   Deferred financing costs                     $            --  $            --
   Trademarks, trade names                                7,083               --
   Non-competition agreements                            45,094               --
   Customer relationships and contracts                  68,566               --
--------------------------------------------------------------------------------
                                                        120,743               --
--------------------------------------------------------------------------------
Total intangible assets                         $    13,942,329  $            --
================================================================================

      The balances at December 31, 2005 and 2004 were nil.

      Intangible asset amortization over the next five years is estimated as
      follows:

      2007                                                $      1,514,768
      2008                                                       1,514,768
      2009                                                       1,514,768
      2010                                                       1,231,964
      2011                                                         920,492
      --------------------------------------------------------------------
                                                          $      6,696,760
      ====================================================================


                                      F-15
<PAGE>

RAND LOGISTICS, INC. (formerly Rand Acquisition Corporation)
Notes to the Consolidated Financial Statements
(U.S. Dollars)
--------------------------------------------------------------------------------

11.   ACCRUED LIABILITIES

      Accrued liabilities are comprised of the following:

<TABLE>
<CAPTION>
                                             Unaudited
                               March 31,     March 31,   December 31,   December 31,
                                 2006          2005          2005           2004
                             ------------  ----------------------------------------
<S>                          <C>           <C>           <C>           <C>
Transaction costs            $    779,966  $         --  $  1,843,465  $         --
Payroll                           850,342            --            --            --
Professional fees                 624,658        12,000        33,500        12,000
Interest                          150,021            --            --            --
Preferred stock dividends          90,417            --            --            --
Other                             119,755            --         8,679            --
                             ------------------------------------------------------
                             $  2,615,159  $     12,000  $  1,885,644  $     12,000
===================================================================================
</TABLE>

12.   BANK INDEBTEDNESS

      At March 31, 2006, the Company had authorized operating lines of credit in
      the amounts of $2,300,000 CDN and $3,500,000 US (2005 - $nil) with its
      senior lender at March 31, 2006, and had no borrowings (2005 - $nil), but
      maintained a letter of credit of $575,000 Canadian dollars. The line of
      credit bears interest at Canadian Prime Rate plus 2% on Canadian dollar
      borrowings and U.S. Base rate plus 2% on U.S. Dollar borrowings and is
      secured under the same terms and has the same financial covenants as
      described in Note 13.

13.   LONG-TERM DEBT

      On March 3, 2006, Lower Lakes, Lower Lakes Transportation and Grand River
      as borrowers, entered into the Credit Agreement which provides for a new
      senior credit facility with a syndicate of lenders, including General
      Electric Capital Corporation, as agent and as a lender. The new senior
      credit facility provides for (i) a revolving credit facility under which
      Lower Lakes may borrow up to Cdn $2,300,000 and an additional seasonal
      facility of US $2,000,000, subject to limitations, (ii) a revolving credit
      facility under which Lower Lakes Transportation may borrow up to US
      $3,500,000 and an additional seasonal facility of US $2,000,000, subject
      to limitations, (iii) a Canadian dollar denominated term loan facility
      under which Lower Lakes may borrow Cdn $21,200,000, and (iv) a US dollar
      denominated term loan facility under which Grand River may borrow US
      $4,000,000. Borrowings under the new senior credit facility are required
      to be used to refinance the borrowers' existing senior credit facility, to
      finance working capital and for the acquisition of the stock of the
      borrowers and other general corporate purposes. The full amount of both
      term loans was extended to the borrowers on March 3, 2006. Rand is neither
      a party to the Credit Agreement nor a guarantor of any obligations under
      the Credit Agreement.

      Under the new senior credit facility, the revolving credit facility
      expires on March 3, 2011. The outstanding principal amount of the Canadian
      term loan borrowings will be repayable as follows: (i) an aggregate of Cdn
      $2,120,000 per annum shall be payable in four equal quarterly installments
      during the first year, (ii) an aggregate of Cdn $2,544,000 shall be
      payable in four equal quarterly instalments in each of the next four
      years, and (iii) a final payment in the outstanding principal amount of
      the Canadian term loan shall be payable upon the Canadian term loan
      facility's maturity on March 3, 2011. The outstanding principal amount of
      the US term loan borrowings will be repayable as follows: (i) an aggregate
      of US $400,000 per annum shall be payable in four equal quarterly
      instalments during the first year, (ii) an aggregate of US $480,000 per
      annum shall be payable in four equal quarterly installments in each of the
      next four years, and (iii) a final payment in the outstanding principal
      amount of the US term loan shall be payable upon the US term loan
      facility's maturity on March 3, 2011.

      Borrowings under the Canadian revolving credit facility and Canadian term
      loan will bear an interest rate per annum, at the borrowers' option, equal
      to (i) the Canadian Prime Rate (as defined in the new senior credit
      facility), plus 2% per annum or (ii) the BA Rate (as defined in the new
      senior credit facility) plus 3% per annum. The US revolving credit
      facility and the US term loan will bear interest, at the borrowers' option
      equal to (i) LIBOR (as defined in the


                                      F-16
<PAGE>

RAND LOGISTICS, INC. (formerly Rand Acquisition Corporation)
Notes to the Consolidated Financial Statements
(U.S. Dollars)
--------------------------------------------------------------------------------

13.   LONG-TERM DEBT (continued)

      new senior credit facility) plus 3.00% per annum, or (ii) the US Base
      Rate(as defined in the new senior credit facility), plus 2% per annum.

      Obligations under the new senior credit facility are secured by a first
      priority lien and security interest on all of the borrowers' assets,
      tangible or intangible, real, personal or mixed, existing and newly
      acquired, and a pledge by Rand LL Holdings Corp of all of the outstanding
      capital stock of the borrowers. In addition, all obligations under the new
      senior credit facility will also be secured by a pledge, with limited
      exception, of all the outstanding capital stock of the borrowers'
      subsidiaries. The indebtedness of each borrower under the new credit
      facility is unconditionally guaranteed by each other borrower and by Rand
      LL Holdings Corp. and such guaranty is secured by a lien on substantially
      all of the assets of each borrower and Rand LL Holdings Corp.

      Under the new senior credit facility, the borrowers will be required to
      make mandatory prepayments of principal on term loan borrowings (i) if the
      outstanding balance of the term loans plus the outstanding balance of the
      seasonal facilities exceeds the sum of 75% of the fair market value of the
      vessels owned by the borrowers, less the amount of outstanding liens
      against the vessels with priority over the Lenders' liens, in an amount
      equal to such excess, (ii) in the event of certain dispositions of assets
      and insurance proceeds (all subject to certain exceptions), in an amount
      equal to 100% of the net proceeds received by the borrowers therefrom, and
      (iii) in an amount equal to 100% of the net proceeds to a borrower from
      any issuance of a borrower's debt or equity securities.

      The new senior credit facility contains certain covenants, including those
      limiting borrowers' and their subsidiaries' ability to incur indebtedness,
      incur liens, sell or acquire assets or businesses, change the nature or
      its business, engage in transactions with related parties, make certain
      investments or pay dividends. In addition, the new senior credit facility
      requires the borrowers to maintain certain financial ratios. Failure of
      the borrowers to comply with any of these covenants or financial ratios
      could result in the loans under the new senior credit facility being
      accelerated.

<TABLE>
<CAPTION>
                                                                                                        Unaudited
                                                                                   March 31, 2006     March 31, 2005
                                                                                    ------------       -------------
<S>                                                                                 <C>                <C>
      a)    Term loan bearing interest at Canadian Prime rate plus 2%. The loan
            is repayable over a five year term until December 2010 with current
            quarterly payments of $530,000 CDN commencing September 2006 and
            increasing to $636,000 CDN beginning with the March 2007 payment
            until December 2010, and the balance due March 2011. The term loan
            is secured by the assets of Lower Lakes Towing Ltd.                     $ 18,150,685       $          --

      b)    Term loan bearing interest at U.S. Base rate plus 2%.The loan is
            repayable over a five year term until December 2010 with current
            quarterly payments of $100,000 US commencing September 2006 and
            increasing to $120,000 US beginning with the March 2007 payment
            until December 2010, and the balance due March 2011. The term loan
            is secured by assets of Grand River.                                       4,000,000                  --

      --------------------------------------------------------------------------------------------------------------
                                                                                    $ 22,150,685       $          --
      Less amounts due within 12 months                                                1,772,055                  --
      --------------------------------------------------------------------------------------------------------------
                                                                                    $ 20,378,630       $          --
      ==============================================================================================================
</TABLE>

      Senior debt instrument (a) is secured by a first charge against all
      property, a general security agreement over inventory and equipment,
      marine mortgages on all vessels owned by the Company and its affiliates as
      well as assignment of contracts of affreightment and insurance. Senior
      debt instrument (b) is secured by assets of Grand River, a marine mortgage
      and collateral marine agreement covering the vessels owned by Grand River.

      The balances at December 31, 2005 and 2004 were nil.


                                      F-17
<PAGE>

RAND LOGISTICS, INC. (formerly Rand Acquisition Corporation)
Notes to the Consolidated Financial Statements
(U.S. Dollars)
--------------------------------------------------------------------------------

13.   LONG-TERM DEBT (continued)

      The Company is required to comply with certain financial covenants under
      the senior and subordinated debt agreements. The Company was in compliance
      with these covenants as of March 31, 2006.

      Principal payments are due as follows:

               2007                                             $      1,772,055
               2008                                                    2,658,082
               2009                                                    2,658,082
               2010                                                    2,658,082
               2011                                                   12,404,384
      --------------------------------------------------------------------------
                                                                $     22,150,685
      ==========================================================================

14.   LONG-TERM CAPITAL LEASE OBLIGATION - VESSEL LEASE

      In 2004, Grand River entered into a sale and bareboat charter arrangement
      (sale leaseback) transaction involving the M/V Manistee vessel. As the
      agreement includes an option by the Company to repurchase the M/V Manistee
      vessel and a put option by the purchaser described in Note 16, the
      leaseback has been classified as a capital lease under Statement of
      Financial Accounting Standards 13, "Accounting for Leases," ("SFAS 13").
      Consistent with the requirements of Statement of Financial Accounting
      Standards 28, "Accounting for Sales with Leasebacks, an amendment of FASB
      Statement No. 13," no gain was recorded on the transaction. The leased
      vessel is recorded in capital assets and is being depreciated over its
      remaining estimated useful life (Note 9).

      The following is a schedule of the future minimum obligation payments
      under the terms of the leaseback determined using the implicit borrowing
      rate in the lease as of March 31, 2006 and assuming that the repurchases
      outlined in Note 15 are not completed and the vessel remains on charter
      hire:

             2007                                            $           350,000
             2008                                                        350,000
             2009                                                        350,000
             2010                                                        500,000
             2011                                                        500,000
       Thereafter                                                      4,500,000
                                                             -------------------
       Total minimum payments                                $         6,550,000
       Less: Amount representing imputed interest
       (at 17.2%)                                                      4,441,868
                                                             -------------------
       Present value of net minimum payments
       (see note a below)                                    $         2,108,132
                                                             ===================

(a) At the inception of the transaction in 2004, the present value of the
minimum lease payments exceeded the fair value of the vessel asset. In
accordance with SFAS 13, the amount recorded in 2004 as the asset and the
obligation was determined to be the fair value of the vessel asset in the amount
of $2,200,000. The balance of the obligation as at March 31, 2006 was
$2,108,132.


                                      F-18
<PAGE>

RAND LOGISTICS, INC. (formerly Rand Acquisition Corporation)
Notes to the Consolidated Financial Statements
(U.S. Dollars)
--------------------------------------------------------------------------------

15.   COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION

      Rand had a certain number of shares subject to possible redemption as of
      the year ended December 31, 2005. No shares were redeemed at the meeting
      of shareholders held February 28, 2006, and as of March 31, 2006, there
      are no longer any shares outstanding subject to possible redemption.

16.   COMMITMENTS

      As disclosed in Note 14, the Company entered into a sale and bareboat
      charter arrangement (sale leaseback) expiring December 31, 2014 relating
      to the M/V Manistee (formerly Richard Reiss) vessel.

      The Company has an option to repurchase the M/V Manistee vessel anytime
      after December 31, 2006 but before March 31, 2007 for the amount of
      $2,200,000. The owner of the M/V Manistee vessel has a put option to
      require the Company to repurchase the vessel at any time after December
      31, 2007 for $2,200,000. In the event the put was exercised, the Company
      would be required to repurchase the vessel within 60 days. If the
      repurchase were not completed within 60 days of the put being exercised,
      the annual charter hire payments would increase immediately to $500,000
      from the current annual amount of $350,000 and the term of the charter
      would be extended an additional 5 years through December 31, 2019.

      The Company has also entered into a bareboat charter agreement for the
      McKee Sons barge which expires in 2018. Total charter commitments for the
      McKee vessel for the term of the lease are given below. The lease contains
      a clause whereby annual payments escalate at the Consumer Price Index, All
      Urban Consumers (CPI-U), capped at a maximum annual increase of 3%.

              2007                                                     $ 675,000
              2008                                                       675,000
              2009                                                       675,000
              2010                                                       675,000
              2011                                                       675,000
      Thereafter                                                       4,725,000
      --------------------------------------------------------------------------
                                                                      $8,100,000
      ==========================================================================

      The Company has not entered into any other significant operating leases.

17.   CONTINGENCIES

      Several legal claims have been filed against the Company. Most of these
      claims are for insignificant amounts. Given management's assessment that
      losses were probable and reasonably estimable, and based on advice from
      the Company's solicitors, a provision of $200,000 has been provided for
      various claims. Management does not anticipate material variations in
      actual losses from the amounts accrued related to these claims. The
      company is subject to other legal proceedings in the normal course of
      business. Management believes these proceedings will not have a material
      adverse effect on the consolidated financial statements.


                                      F-19
<PAGE>

RAND LOGISTICS, INC. (formerly Rand Acquisition Corporation)
Notes to the Consolidated Financial Statements
(U.S. Dollars)
--------------------------------------------------------------------------------

18.   STOCKHOLDERS' EQUITY

      On October 7, 2004, the Company's Board of Directors authorized a stock
      dividend of 0.1428571 shares of common stock for each outstanding share of
      common stock. All references in the accompanying financial statements to
      the number of shares of stock have been retroactively restated to reflect
      this transaction.

      At December 31, 2005, 10,100,000 shares of common stock were reserved for
      issuance upon exercise of redeemable warrants and the underwriters' unit
      purchase option. Each warrant allows its holder to purchase one fully paid
      and non-assessable share of our common stock at the price of $5.00 per
      share. The warrants expire on October 26, 2008. We may call the warrants
      for redemption, in whole and not in part, at a price of $.01 per warrant
      at any time after the warrants become exercisable, upon not less than 30
      days' prior written notice of redemption to each warrant holder, and if,
      and only if, the reported last sale price of the common stock equals or
      exceeds $8.50 per share, for any 20 trading days within a 30 trading day
      period ending on the third business day prior to the notice of redemption
      to warrant holders.

      Options and warrants issued in conjunction with our initial public
      offering are equity linked derivatives and accordingly represent
      off-balance sheet arrangements. The options and warrants meet the scope
      exception in paragraph 11(a) of FAS 133 and are accordingly not accounted
      for as derivatives for purposes of FAS 133, but instead are accounted for
      as equity.

      The exercise price and number of shares of common stock issuable on
      exercise of the warrants may be adjusted in certain circumstances
      including in the event of a stock dividend, or our recapitalization,
      reorganization, merger or consolidation. However, the warrants will not be
      adjusted for issuances of common stock at a price below their respective
      exercise prices.

      The warrants may be exercised upon surrender of the warrant certificate on
      or prior to the expiration date at the offices of the warrant agent, with
      the exercise form on the reverse side of the warrant certificate completed
      and executed as indicated, accompanied by full payment of the exercise
      price, by certified check payable to us, for the number of warrants being
      exercised. The warrant holders do not have the rights or privileges of
      holders of common stock and any voting rights until they exercise their
      warrants and receive common stock. After the issuance of shares of common
      stock upon exercise of the warrants, each holder will be entitled to one
      vote for each share held of record on all matters to be voted on by
      stockholders.

      No warrants will be exercisable unless at the time of exercise a
      prospectus relating to the common stock issuable upon exercise of the
      warrants is current and the common stock has been registered or qualified
      or deemed to be exempt under the securities laws of the state of residence
      of the holder of the warrants. Under the terms of the agreement, we have
      agreed to meet these conditions and use our best efforts to maintain a
      current prospectus relating to the common stock issuable upon exercise of
      the warrants. However, we cannot assure you that we will be able to do so.
      The warrants may be deprived of any value and the market for the warrants
      may be limited if the prospectus relating to the common stock issuable
      upon the exercise of the warrants is not current or if the common stock is
      not qualified or exempt from qualification in the jurisdictions in which
      the holders of the warrants reside.The Company is not obligated to incur
      any liquidation damages or penalties in connection with the exercise of
      the warrants.

      No fractional shares will be issued upon exercise of the warrants.
      However, if a warrant holder exercises all warrants then owned of record
      by him, we will pay to the warrant holder, in lieu of the issuance of any
      fractional share which is otherwise issuable to the warrant holder, an
      amount in cash based on the market value of the common stock on the last
      trading day prior to the exercise date.

      EarlyBirdCapital, who acted as the representative to the underwriters in
      connection with Rand's initial public offering, holds an option to
      purchase up to 300,000 units at a purchase price of $9.90 per unit. Each
      unit consists of one share of common stock and two warrants. Each warrant
      entitles the holder to purchase one share of common stock at an exercise
      price of $6.25. If the option is exercised in full, we would receive gross
      proceeds of $2,970,000 and issue an additional 300,000 units consisting of
      300,000 shares of our common stock and 600,000 warrants. If all of these
      warrants are exercised, we would issue an additional 600,000 shares of our
      common stock and receive additional gross proceeds of $3,750,000. We
      estimate that the fair value of this option is approximately $558,000
      ($1.86 per Unit) using a Black-Scholes option-pricing model. The fair
      value of the option has been estimated as of the date of grant using the
      following assumptions: (1) expected volatility of 47.79%, (2) risk-free
      interest rate of 3.34% and (3) expected life of 5 years. The option may be
      exercised by the holder for cash or on a "cashless" basis, at the holder's
      option, such that the holder may use the appreciated value of the option
      (the difference between the exercise prices of the option and the
      underlying warrants and the market price of the units and underlying
      securities) to exercise the option without the payment of any cash.


                                      F-20
<PAGE>

RAND LOGISTICS, INC. (formerly Rand Acquisition Corporation)
Notes to the Consolidated Financial Statements
(U.S. Dollars)
--------------------------------------------------------------------------------

      The underwriter's option was purchased for $100 and became exercisable in
      March, 2006, upon the consummation of the acquisition of Lower Lakes
      Towing Ltd. The underwriter's option expires on October 12, 2009.

      On March 3, 2006 the Company's Certificate of Incorporation was amended
      and restated to, among other things, increase the number of shares of
      common stock that the Company is authorized to issue from 20,000,000 to
      50,000,000 shares.

      The Company is authorized to issue 1,000,000 shares of preferred stock
      with such designations, voting and other rights and preferences may be
      determined from time to time by the Board of Directors.

      On March 3, 2006, pursuant to the terms of the Preferred Stock Purchase
      Agreement, dated September 2, 2005, by and among Rand and Knott Partners
      LP, Matterhorn Offshore Fund Ltd., Anno LP and Good Steward Fund Ltd., Bay
      II Resources Partners, Bay Resources Partners L.P., Bay Resources Partners
      Offshore Fund Ltd. and Thomas E. Claugus, Rand issued 300,000 shares of
      its newly-created series A convertible preferred stock for an aggregate
      purchase price of $15,000,000. Issuance costs of $100,000 were incurred,
      generating proceeds net of issuance costs of $14,900,000. The shares of
      series A convertible preferred stock issued under the Preferred Stock
      Purchase Agreement were not registered under the Securities Act of 1933,
      as amended, and bear restrictive legends that reflect this status. The
      securities were issued in a private placement in reliance on the exemption
      from registration provided by Section 4(2) of the Securities Act of 1933,
      as amended. Rand did not engage in any general solicitation or
      advertisement for the issuance of these securities. These securities were
      purchased by a total of eight investors, which are comprised of two groups
      of affiliated entities. The investors received copies of the documents
      related to Rand's acquisition of Lower Lakes and had access to additional
      related due diligence materials. In connection with this issuance, each of
      the investors represented that (i) it is an accredited investor as this
      term is defined in Regulation D under the Securities Act, (ii) the
      securities it is acquiring cannot be resold except pursuant to a effective
      registration under the Securities Act or in reliance on an exemption from
      the registration requirements of the Securities Act, and that the
      certificates representing such securities bear a restrictive legend to
      that effect and (iii) it intends to acquire the securities for investment
      only and not with a view to the resale thereof.

      The shares of series A convertible preferred stock: rank senior to Rand's
      common stock with respect to liquidation and dividends; are entitled to
      receive a cash dividend at the annual rate of 7.75% (based on the $50 per
      share issue price), payable quarterly (subject to increases of 0.5% for
      each six month period in respect of which the dividend is not timely paid,
      up to a maximum of 12%, subject to reversion to 7.75% upon payment of all
      accrued and unpaid dividends); are convertible into shares of Rand common
      stock at any time at the option of the series A preferred stockholder at a
      conversion price of $6.20 per share (based on the $50 per share issue
      price and subject to adjustment) or 8.065 shares of common stock for each
      Series A Preferred Share (subject to adjustment); are convertible into
      shares of Rand common stock (based on a conversion price of $6.20 per
      share, subject to adjustment) at the option of Rand if, after the third
      anniversary of the acquisition, the trading price of Rand's common stock
      for 20 trading days within any 30 trading day period equals or exceeds
      $8.50 per share (subject to adjustment); may be redeemed by Rand in
      connection with certain change of control or acquisition transactions;
      will vote on an as-converted basis with Rand's common stock; and have a
      separate vote over certain material transactions or changes involving
      Rand. The Company is not obligated to incur any liquidation damages in
      connection with the conversion of the preferred stock into common stock.

                                                 Number
                                               Outstanding        Stated amount
                                             -----------------------------------
Common stock                                    5,600,000       $            560
Preferred stock                                  300,000        $     15,000,000

19.   OUTSIDE VOYAGE CHARTER FEES

      Outside voyage charter fees relate to the subcontracting of external
      vessels chartered to service the Company's customers to supplement the
      existing shipments.


                                      F-21
<PAGE>

RAND LOGISTICS, INC. (formerly Rand Acquisition Corporation)
Notes to the Consolidated Financial Statements
(U.S. Dollars)
--------------------------------------------------------------------------------

20.   INTEREST EXPENSE

      Interest expense is comprised of the following:

                                                                    Unaudited
                                                                   Three months
                                                 Period ended         ended
                                                March 31, 2006    March 31, 2005
                                               ---------------   ---------------

Revolver                                       $         2,486   $            --
Long-term debt - senior                                134,116                --
Long-term debt - subordinated                           14,446                --
--------------------------------------------------------------------------------
                                               $       151,048   $            --
================================================================================

      The balances at December 31, 2005 and 2004 were nil.

21.   SEGMENT INFORMATION

      The Company has identified only one reportable segment under Statement of
      Financial Accounting Standards No.131, "Disclosures about Segments of an
      Enterprise and Related Information" ("SFAS 131").

      Information about geographic operations is as follows:

                                                                    Unaudited
                                           Three months            Three months
                                              ended                   ended
                                          March 31, 2006          March 31, 2005
                                         ---------------------------------------

Revenues by country
  Canada                                 $     1,158,253         $            --
  United States                                  572,149                      --
--------------------------------------------------------------------------------
                                         $     1,730,402         $            --
================================================================================

Net Loss by country
  Canada                                 $      (566,879)        $            --
  United States                                 (922,617)                     --
--------------------------------------------------------------------------------
                                         $    (1,489,496)        $            --
================================================================================

      Revenues from external customers are allocated based on the country of the
      legal entity of the Company in which the revenues were recognized.

      The balances at December 31, 2005 and 2004 were nil.


                                      F-22
<PAGE>

RAND LOGISTICS, INC. (formerly Rand Acquisition Corporation)
Notes to the Consolidated Financial Statements
(U.S. Dollars)
--------------------------------------------------------------------------------

21.    SEGMENT INFORMATION (con't)

                                                                    Unaudited
                                             March 31, 2006       March 31, 2005
                                              -------------        -------------

Capital assets by country
  Canada                                      $  30,416,419        $          --
  United States                                  17,744,418                   --
--------------------------------------------------------------------------------
                                              $  48,160,837        $          --
================================================================================

Total assets by country
  Canada                                      $  58,033,856        $          --
  United States                                  28,734,980                   --
--------------------------------------------------------------------------------
                                              $  86,768,836        $          --
================================================================================

      The balances at December 31, 2005 and 2004 were nil.


                                      F-23
<PAGE>

RAND LOGISTICS, INC. (formerly Rand Acquisition Corporation)
Notes to the Consolidated Financial Statements
(U.S. Dollars)
--------------------------------------------------------------------------------

22.   FINANCIAL INSTRUMENTS

      Fair value of financial instruments

      Financial instruments are comprised of cash, accounts receivable, accounts
      payable and accrued liabilities and bank indebtedness. The estimated fair
      values of cash, accounts receivable, accounts payable and accrued
      liabilities approximate book values because of the short-term maturities
      of these instruments.

      The estimated fair value of senior debt approximates the carrying value as
      the debt bears interest at variable interest rates. The estimated fair
      value of preferred stock instruments has not been calculated due to the
      lack of comparable instruments and the constraints of timeliness and cost
      in preparing a valuation.

      Foreign exchange risk

      Foreign currency exchange risk to the Company results primarily from
      changes in exchange rates between the Company's reporting currency, the
      U.S. Dollar, and the Canadian dollar. The Company is exposed to
      fluctuations in foreign exchange as a significant portion of revenue and
      operating expenses are denominated in Canadian dollars.

      Interest rate risk

      The Company is exposed to fluctuations in interest rates as a result of
      its banking facilities and senior debt bearing variable interest rates.

      Credit risk

      Accounts receivable credit risk is mitigated by the dispersion of the
      Company's customers among industries and the short shipping season. The
      period ending March 31, 2006 is not indicative of a full years operations,
      as one customer generated 50% of sales during the period.

23.   ECONOMIC DEPENDENCE

      The Company derived $865,557 or 50% (2005 - $nil) of its revenue from two
      customers during the period.

24.   OTHER COMPREHENSIVE INCOME (LOSS)

      Statement of Financial Accounting Standards No. 130, "Reporting
      Comprehensive Income", establishes standards for the reporting and display
      of comprehensive income (loss), which is defined as the change in equity
      arising from non-owner sources. Comprehensive loss is reflected in the
      consolidated statement of changes in shareholders' deficiency. The
      components of, and changes in, comprehensive loss and accumulated other
      comprehensive loss consist of translation adjustments arising from the
      translation of the parent Company accounts from Canadian dollar functional
      currency to U.S. Dollar reporting currency. Included in comprehensive loss
      and accumulated other comprehensive loss are the effects of foreign
      currency translation adjustments of $1,346,555 (2005 - $nil).


                                      F-24
<PAGE>

RAND LOGISTICS, INC. (formerly Rand Acquisition Corporation)
Notes to the Consolidated Financial Statements
(U.S. Dollars)
--------------------------------------------------------------------------------

25.   EARNINGS PER SHARE

      The company had a total of 5,600,000 shares issued and outstanding, out of
      an authorized total of 50,000,000 shares. The fully diluted calculation
      utilizes a total of 16,444,263 shares based on the following additional
      share calculation. Warrants issued from the initial prospectus and
      overallotment converted to 8,424,908 based on the average quarterly share
      price of $5.46 and conversion of the convertible preferred shares to
      2,419,355 at a price of $6.20. In connection with Rand's initial public
      offering, Rand issued to the representative of the underwriters in the
      initial public offering, for $100, an option to purchase up to a total of
      300,000 units, with each unit consisting of one share of common stock and
      two warrants. The units issuable upon exercise of the option are identical
      to those issued in Rand's initial public offering except that the warrants
      included in the units underlying the option have an exercise price of
      $6.25 per share. The option will be exercisable by the holder at $9.90 per
      unit commencing upon the consummation of a business combination by Rand
      and will expire on October 26, 2009. Rand accounted for the fair value of
      the option, inclusive of the receipt of the $100 cash payment, as an
      expense of Rand's initial public offering resulting in a charge directly
      to stockholders' equity. The underwriter options and warrants are excluded
      from the dilution calculation.

<TABLE>
<CAPTION>
                                                                                                           Period from
                                                                             Unaudited                      Inception
                                                          Period Ended     Period ended     Year ended       through
                                                            March 31,        March 31,     December 31,     December 31,
                                                              2006             2005            2005            2004
                                                          ------------     ------------    ------------    ------------
Numerator:

<S>                                                       <C>              <C>             <C>             <C>
Net (loss) income                                         $ (1,399,079)    $     36,632    $     88,604    $    (25,175)

     Preferred stock dividends                                  90,417               --              --              --
-----------------------------------------------------------------------------------------------------------------------
Income (loss) available to common shareholders            $ (1,489,496)    $     36,632    $     88,604    $    (25,175)
=======================================================================================================================
Denominator:

Weighted average common shares for basic EPS                 5,600,000        5,600,000       5,600,000       2,584,634
-----------------------------------------------------------------------------------------------------------------------
Effect of dilutive securities:

Total  o/s warrants                                          9,200,000        9,200,000       9,200,000       9,200,000

Exercise price                                                    5.00             5.00            5.00            5.00

Average price during period                                       5.46             5.31            5.37            4.87
-----------------------------------------------------------------------------------------------------------------------

   Weighted avg. warrants (total o/s / avg price)            8,424,908               --(a)           --(a)           --
-----------------------------------------------------------------------------------------------------------------------
   Weighted avg. convertible preferred shares at $6.20       2,419,355               --              --              --
-----------------------------------------------------------------------------------------------------------------------

Weighted average common shares for diluted EPS              16,444,263        5,600,000       5,600,000       2,584,634
=======================================================================================================================

Basic EPS                                                 ($      0.27)    $       0.01    $       0.02    ($      0.01)
Diluted EPS                                               ($      0.27)    $       0.01    $       0.02    ($      0.01)
=======================================================================================================================
</TABLE>

(a)   No incremental shares were calculated for the effect of the outstanding
      warrants since the warrants were contingently exercisable during the
      period.

26.   RELATED PARTY TRANSACTIONS

      The Company presently occupies office space provided by an affiliate of a
      stockholder. Such affiliate has agreed that it will make such office
      space, as well as certain office and secretarial services, available to
      the Company, as may be required by the Company from time to time. The
      Company has agreed to pay such affiliate $7,500 per month for such
      services commencing on the effective date of the initial public offering.
      The statement of operations for the period from January 31, 2006 to March
      31, 2006, the three month period ending March 31, 2005, the year ending
      December 31, 2005 and the year ending December 31, 2004 include $22,500,
      $22,500, $90,000, and $52,500, respectively, related to this agreement.
      During 2004, Laurence S. Levy advanced $70,000 to Rand to cover expenses
      related to Rand's initial public offering. The loan was payable without
      interest on the earlier of June 10, 2005 or the consummation of Rand's
      initial public offering. This loan was repaid in November 2004.


                                      F-25
<PAGE>

RAND LOGISTICS, INC. (formerly Rand Acquisition Corporation)
Notes to the Consolidated Financial Statements
(U.S. Dollars)
--------------------------------------------------------------------------------

27.   MANAGEMENT BONUS PROGRAM

      On March 3, 2006, in connection with the closing of the acquisition of
      Lower Lakes, the Company adopted a management bonus program, the
      participants of which are employed by Lower Lakes or its affiliates.
      Participants are eligible to receive awards based on a formula that
      adjusts an aggregate initial plan account balance of $3,000,000 by audited
      earnings before interest, taxes, depreciation and amortization for fiscal
      years 2007 and 2008. Awards will be settled on July 31, 2008 and may be
      settled in cash and/or shares of the Company's common stock, or any
      combination thereof, all in the discretion of the plan administrator, and
      shall be subject to a cap which limits appreciation of the initial plan
      account balance to the percentage increase in the market price of the
      Company's common stock between the closing date and the award settlement
      date. Subject to a participant's separation from service of Rand, on each
      of March 31, 2006, 2007 and 2008, each participant then employed by the
      Company or one of its affiliates shall vest into one-third of such
      participant's plan account balance. The Company shall grant registration
      rights to any participant that is issued shares of Rand's common stock in
      settlement of an award under the Management Bonus Program.

      If a participant's service with the Company or its affiliates is
      terminated by the Company for cause (as defined in the Program) or by the
      participant voluntarily without notice (other than for good reason, as
      defined in the participant's employment agreement, if applicable), then
      such participant's rights to his plan account balance, including any
      vested amounts, shall be forfeited, and such participant shall no longer
      have any rights in or to its plan account balance or under the Management
      Bonus Program.

      If a participant incurs a voluntary separation from service with the
      Company or its affiliate (other than for good reason) and who does provide
      appropriate notice to the Company of such separation, the participant
      shall retain his rights in his plan account balance to the extent such has
      vested as of the effective date of separation, but shall, as of such
      effective date, cease to further vest in such participant's plan account
      balance. Any unvested portion of a participant's plan account balance
      resulting from such a separation from service shall be added to the plan
      account balances of each then remaining participant in proportion to the
      respective plan account balance of each such remaining participant, and
      with respect to each such remaining participant, in proportion to each
      such participant's vested and unvested plan account balance.

      If a participant's service with the Company or its affiliate is terminated
      by the Company without cause (as defined in the Program) or by the
      participant for good reason or for death or disability, then the
      participant is entitled to be considered fully vested with respect to the
      participant's plan account balance; and have the option to elect to freeze
      the amount of such participant's award as of the date of such separation
      from service, but with payment of such amount not being made until July
      31, 2008.

28.   PRO FORMA INFORMATION

      Giving effect to the purchase transaction immediately prior to the three
      months ended March 31, 2006, changes certain income statement items. It
      should be noted that the results differ considerably from the year ended
      December 31, 2005 pro forma statement filed with the Rand 10-KSB filed
      March 31, 2006, due to the seasonal nature of Lower Lakes business.

<TABLE>
<CAPTION>
      Selected statement of operations data      Pro forma            Pro Forma
                                             Three Months ended       Year ended
                                               March 31, 2006      December 31, 2005
      ------------------------------------------------------------------------------
<S>                                             <C>                  <C>
      Revenue                                   $  6,319,869         $ 61,240,535
      Net (loss) income                           (2,400,431)             455,200
      Net loss per share - basic and diluted    $       0.48         $       0.13
</TABLE>

      There is a pro forma loss per share for the period ended December 31, 2005
due to the effect on convertible preferred stock dividends.

29.   SUBSEQUENT EVENTS

      No material subsequent events.


                                      F-26