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

                                   FORM 10-QSB

      (Mark one)

             |X| QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 2006

                                       OR

             |_| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                                  EXCHANGE ACT

                For the transition period from ______ to _______

                        COMMISSION FILE NUMBER 000-50908

                              RAND LOGISTICS, INC.
        (Exact name of small business issuer as specified in its charter)

             Delaware                                     20-1195343
-------------------------------                ---------------------------------
(State or other jurisdiction of                (IRS Employer Identification No.)
 incorporation or organization)

              461 Fifth Avenue, 25th Floor, New York, New York 10017
              ------------------------------------------------------
                    (Address of principal executive offices)

                                 (212) 644-3450
                           ---------------------------
                           (Issuer's telephone number)

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

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

As of November 17, 2006, there were approximately 8,002,957 shares of the $.0001
Par Value Common Stock outstanding.

Transitional Small Business Disclosure Form (check one): Yes |_| No |X|

<PAGE>

                                     PART I
                              FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


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

<TABLE>
<CAPTION>
                                                                          September 30,       March 31,
                                                                              2006              2006
                                                                          -------------     -------------
<S>                                                                       <C>               <C>
ASSETS
CURRENT
        Cash and cash equivalents                                         $   9,598,428     $   2,574,325
        Accounts receivable (Note 3)                                         14,244,088         2,107,282
        Prepaid expenses and other current assets (Note 4)                    1,902,352         1,460,267
        Income tax receivable                                                   185,795                --
        Deferred income taxes                                                 1,118,404         1,160,651
---------------------------------------------------------------------------------------------------------

Total current assets                                                         27,049,067         7,302,525
BLOCKED ACCOUNT (Note 5)                                                      2,700,000                --
PROPERTY AND EQUIPMENT, NET (Note 6)                                         66,755,890        48,160,837
DEFERRED INCOME TAXES                                                         7,051,533         9,386,020
DEFERRED DRYDOCK COSTS, NET (Note 7)                                          1,543,288         1,614,173
INTANGIBLE ASSETS, NET (Note 8)                                              14,552,585        13,942,329
GOODWILL (Note 8)                                                             6,362,952         6,362,952
---------------------------------------------------------------------------------------------------------
Total assets                                                                126,015,315        86,768,836
=========================================================================================================

LIABILITIES
CURRENT
        Bank indebtedness (Note 9)                                        $   4,097,245     $          --
        Accounts payable                                                      7,770,895         7,617,899
        Accrued liabilities (Note 10)                                         3,664,435         2,615,159
        Income taxes payable                                                     99,000            50,787
        Deferred income taxes                                                   498,233           405,886
        Current portion of long-term debt  (Note 11)                          3,728,765         1,772,055
        Current portion of long-term capital lease obligation - vessel
        lease (Note 12)                                                       2,087,785         2,108,132
---------------------------------------------------------------------------------------------------------
Total current liabilities                                                    21,946,358        14,569,918
---------------------------------------------------------------------------------------------------------
LONG-TERM DEBT  (Note 11)                                                    35,401,859        20,378,630
ACQUIRED MANAGEMENT BONUS PROGRAM (Note 21)                                   3,000,000         3,000,000
DEFERRED INCOME TAXES                                                        11,811,047        12,063,059
---------------------------------------------------------------------------------------------------------

Total liabilities                                                            72,159,264        50,011,607
---------------------------------------------------------------------------------------------------------

COMMITMENTS AND CONTINGENCIES (Note 13 and 14)                                       --                --

STOCKHOLDERS' EQUITY
        Preferred stock, $.0001 par value,                                   14,900,000        14,900,000
        Authorized 1,000,000 shares, Issued and outstanding 300,000
        shares (Note 15)
        Common stock, $.0001 par value                                              800               560
        Authorized 50,000,000 shares, Issued and outstanding 8,002,957
        shares (Note 15)
        Additional Paid-in Capital                                           37,579,051        24,629,291
        Accumulated surplus (deficit)                                         1,242,083        (1,426,067)
        Minority Interest  (Note 23)                                            482,539                --
        Accumulated other comprehensive loss                                   (348,422)       (1,346,555)
---------------------------------------------------------------------------------------------------------

Total stockholders' equity                                                   53,856,051        36,757,229
---------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity                                $ 126,015,315     $  86,768,836
=========================================================================================================
</TABLE>

            See accompanying notes to unaudited financial statements

<PAGE>

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

<TABLE>
<CAPTION>
                                                     Three months        Three months         Six months         Six months
                                                        Ended               ended               ended               ended
                                                      September          September 30,       September 30,        September
                                                       30, 2006              2005                2006             30, 2005
                                                   ---------------     ---------------     ---------------     ---------------
<S>                                                <C>                 <C>                 <C>                 <C>
REVENUE                                            $    27,387,803     $            --     $    49,632,919     $            --
------------------------------------------------------------------------------------------------------------------------------

EXPENSES
          Outside voyage charter fees (Note
                                             16)         1,307,140                  --           3,625,041                  --
         Vessel operating expenses                      18,189,956                  --          32,485,629                  --
         Repairs and maintenance                                --                  --              56,748                  --

         General and administrative                      1,680,766              79,503           2,959,003             143,739
         Depreciation                                    1,274,737                  --           2,329,006                  --
         Amortization of drydock costs                      84,077                  --             168,065                  --
         Amortization of intangibles                       388,983                  --             741,805                  --
         Loss on foreign exchange                           52,592                  --              89,278                  --
------------------------------------------------------------------------------------------------------------------------------
                                                        22,978,251              79,503          42,454,575             143,739
------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE OTHER INCOME AND
EXPENSES AND INCOME TAXES                                4,409,552             (79,503)          7,178,344            (143,739)
------------------------------------------------------------------------------------------------------------------------------

OTHER INCOME AND EXPENSES

Interest expense (Note 17)                                 968,070                  --           1,612,239                  --

Interest income                                            (86,107)           (161,265)            (88,079)           (294,608)

Amortization of deferred financing costs                    66,939                  --              96,376                  --
------------------------------------------------------------------------------------------------------------------------------

                                                           948,902            (161,265)          1,620,536            (294,608)
==============================================================================================================================

INCOME BEFORE INCOME TAXES                               3,460,650              81,762           5,557,808             150,869

PROVISION (RECOVERY) FOR INCOME TAXES

Current                                                     90,500              41,308              11,000              84,308
Deferred                                                 1,041,145                  --           2,205,701                  --
------------------------------------------------------------------------------------------------------------------------------

NET INCOME                                         $     2,329,005     $        40,454     $     3,341,107     $        66,561
==============================================================================================================================
MINORITY INTEREST                                  $        82,539     $            --     $        82,539     $            --
==============================================================================================================================
PREFERRED STOCK DIVIDENDS                          $       298,041     $            --     $       590,418     $            --
==============================================================================================================================
NET INCOME APPLICABLE TO COMMON STOCKHOLDERS       $     1,948,425     $        40,454     $     2,668,150     $        66,561
------------------------------------------------------------------------------------------------------------------------------

        Net  earnings per share basic (Note 20)    $           .27     $           .01     $           .42     $           .01

        Net earnings per share diluted                         .13                 .01                 .19                 .01

        Weighted average shares - Basic                  7,193,265           5,600,000           6,400,986           5,600,000

        Weighted average shares - Diluted               17,895,696           5,600,000          16,862,299           5,600,000
        ======================================================================================================================
</TABLE>

            See accompanying notes to unaudited financial statements

<PAGE>

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

<TABLE>
<CAPTION>


                                             Common Stock                        Preferred Stock
                                         Shares            Amount           Shares            Amount
                                    --------------    --------------    --------------    --------------
<S>                                      <C>          <C>                      <C>        <C>
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                                --                --                --                --

      Net loss                                  --                --                --                --
      Preferred dividend
      issuable                                  --                --                --                --

      Translation adjustments                   --                --                --                --
      Comprehensive loss                        --                --                --                --
--------------------------------------------------------------------------------------------------------

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

      Net income                                --                --                --                --

      Preferred dividend
      issuable                                  --                --                --                --

      Translation adjustments                   --                --                --                --
      Comprehensive income                      --                --                --                --
========================================================================================================

Balances, June 30, 2006                  5,600,000    $          560           300,000    $   14,900,000

      Net income                                --                --                --                --

      Minority Interest                         --                --                --                --
      Preferred dividend
      issuable                                  --                --                --                --
      Shares issued, net of
      issuance costs of $49,997          2,402,957               240                --                --

      Translation adjustments                   --                --                --                --
      Comprehensive income                      --                --                --                --
========================================================================================================

Balances, September 30, 2006             8,002,957               800           300,000        14,900,000
========================================================================================================
</TABLE>

<TABLE>
<CAPTION>
                                                                                             Accumulated
                                      Additional        Accumulated          Minority           Other               Total
                                        Paid-In            Surplus           Interest       Comprehensive       Stockholders'
                                        Capital           (Deficit)             VIE         Income (Loss)          Equity
                                    --------------     --------------     --------------    --------------     --------------
<S>                                 <C>                <C>                       <C>        <C>                <C>
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                         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
-----------------------------------------------------------------------------------------------------------------------------

      Net income                                --          1,012,102                 --                --          1,012,102

      Preferred dividend
      issuable                                  --           (292,377)                --                --           (292,377)

      Translation adjustments                   --                 --                 --         1,006,463          1,006,463
      Comprehensive income                      --                 --                  `                --          2,018,565
=============================================================================================================================

Balances, June 30, 2006             $   24,629,291     $     (706,342)                --    $     (340,092)    $   38,483,417

      Net income                                --          2,329,005                  `                --          2,329,005

      Minority Interest                         --            (82,539)           482,539                --            400,000
      Preferred dividend
      issuable                                  --           (298,041)                --                --           (298,041)
      Shares issued, net of
      issuance costs of $49,997         12,949,760                 --                  `                --         12,950,000

      Translation adjustments                   --                 --                  `            (8,330)            (8,330)
      Comprehensive income                      --                 --                 --                --          2,320,675
=============================================================================================================================

Balances, September 30, 2006            37,579,051          1,242,083            482,539          (348,422)        53,856,051
=============================================================================================================================
</TABLE>

            See accompanying notes to unaudited financial statements

<PAGE>

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

<TABLE>
<CAPTION>
                                                                       Six months         Six months
                                                                         ended              ended
                                                                        September          September
                                                                        30, 2006           30, 2005
                                                                     --------------     --------------
<S>                                                                  <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income                                                         $    2,668,150     $       66,561
  Adjustments to reconcile net income to net cash used
      by operating activities
        Depreciation and amortization of drydock costs                    2,497,071                 --
        Amortization of intangible assets                                   838,181                 --
        Interest accrued but not paid                                        37,278                 --
        Deferred income taxes                                             2,578,953                 --
      Changes in assets and liabilities, net of amounts acquired:
        Accounts receivable                                             (12,136,806)                --
        Interest accrued on Treasury Bill                                        --           (356,501)
        Prepaid expenses and other current assets                          (392,086)            34,000
        Accounts payable and accrued liabilities                          1,134,273             38,784
        Income taxes payable                                                (69,582)             1,154
        Deferred interest                                                        --             70,401
        Drydock expenditures                                                (25,107)                --
------------------------------------------------------------------------------------------------------
                                                                         (2,869,675)          (145,601)
------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of property and equipment                                    (19,552,805)                --
  Blocked account                                                        (2,700,000)                --
  Deferred acquisition and
  transaction costs                                                      (1,013,974)          (257,207)
------------------------------------------------------------------------------------------------------
                                                                        (23,266,779)          (257,207)
------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
  Capital lease repayment                                                   (20,347)                --
  Proceeds from long term debt - senior                                  14,500,000                 --
  Proceeds from long term debt - subordinated                             2,200,000                 --
  Senior debt repayment                                                    (574,188)                --
  Proceeds from share issuance - net                                     12,950,000                 --
  Proceeds from bank indebtedness                                         4,097,245                 --
------------------------------------------------------------------------------------------------------
                                                                         33,152,710                 --
------------------------------------------------------------------------------------------------------
EFFECT OF FOREIGN EXCHANGE RATES ON CASH                                   (474,692)                --
MINORITY INTEREST                                                           482,539                 --
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS                                                               7,024,103           (402,808)
======================================================================================================
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                            2,574,325            726,970
------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                             $    9,598,428     $      324,162
======================================================================================================
</TABLE>

            See accompanying notes to unaudited financial statements

<PAGE>

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

1.    SIGNIFICANT ACCOUNTING POLICIES

      Basis of presentation and consolidation

      The consolidated financial statements at September 30, 2006 and for the
      periods ended September 30, 2006 and 2005 are unaudited. The consolidated
      financial statements and notes are prepared in accordance with accounting
      principles generally accepted in the United States of America and include
      the accounts of Rand Finance Corp., a 100% subsidiary of Rand, Rand LL
      Holdings Corp., a 100% subsidiary of Rand and the accounts of 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, Port Dover Steamship Company Limited, a 100% wholly owned
      subsidiary of Lower Lakes Towing Limited and a variable interest entity as
      disclosed in Note 23. The subsidiaries, with the exception of Rand LL
      Holdings Corp. and Rand Finance Corp. were purchased through a Share
      Purchase Agreement on March 3, 2006, more fully described in the 10-KSB
      for the transition period ended March 31, 2006.

      In the opinion of management, all adjustments (consisting of normal
      accruals) have been made that are necessary to present fairly the
      financial position of Rand Logistics, Inc, and its wholly owned
      subsidiaries (the "Company") as of September 30, 2006 and 2005 and the
      results of operations for the three months ended September 30, 2006 and
      2005 and the six months ended September 30, 2006 and 2005, its cash flows
      for the six months ended September 30, 2006 and 2005, its stockholders'
      equity for the six months ended September 30, 2006. Operating results for
      the interim period presented are not necessarily indicative of the results
      to be expected for a full year. 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.

      The consolidated financial statements and related notes have been prepared
      pursuant to the rules and regulations of the U.S. Securities and Exchange
      Commission. Accordingly, certain information and footnote disclosures
      normally included in financial statements prepared in accordance with
      generally accepted accounting principles have been omitted pursuant to
      such rules and regulations. The March 31, 2006 balances were derived from
      the March 31 audited financial statements. These financial statements
      should be read in conjunction with the financial statements that were
      included in the Company's Annual Report on Form 10-KSB for the period
      ended March 31, 2006.

      Cash and cash equivalents

      The Company considers all highly liquid investments with an original
      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 with other accounts receivable including insurance and Goods and
      Service Tax refunds. 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.

      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.

<PAGE>

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

1.    SIGNIFICANT ACCOUNTING POLICIES (continued)

      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.

      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. Intangible assets, except
      goodwill, were valued at local currency at the acquisition date. 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.

<PAGE>

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

1.    SIGNIFICANT ACCOUNTING POLICIES (continued)

      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. The Company evaluates impairment by comparing the fair value
      of the intangible assets with indefinite lives and goodwill with their
      carrying values. The Company determines 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 the Company
      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 the Company's 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.

      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.

      Advertising costs

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

      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.

<PAGE>

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

1.    SIGNIFICANT ACCOUNTING POLICIES (continued)

      Stock-based compensation

      Effective April 1, 2006, the Company adopted SFAS No. 123(R), Share-Based
      Payment, using the prospective method. The prospective method requires
      compensation cost to be recognized beginning on the effective date based
      on the requirements of SFAS 123(R) for all share-based payments granted
      after the effective date. The Company has not granted such share-based
      payments during the three months ended September 30, 2006 and currently
      has no options or warrants outstanding, as a result, the adoption of FAS
      123R did not have a material effect on the Company.

      Variable interest entities

      In the normal course of business, the Company interacts with various
      entities that may be variable interest entities (VIEs). Typical types of
      these entities are suppliers, customers, bareboat lessors, and charter
      hire lessors. VIEs have been consolidated in accordance with FASB
      Interpretation ("FIN") 46R (see note 23).

2.    RECENTLY ISSUED PRONOUNCEMENTS

      In July 2006, the FASB issued FIN 48, ``Accounting for Uncertainty in
      Income Taxes - an interpretation of FASB Statement No. 109.'' This
      interpretation clarifies the accounting for uncertainty in income taxes
      recognized in an entity's financial statements in accordance with SFAS No.
      109, ``Accounting for Income Taxes.'' It prescribes a recognition
      threshold and measurement attribute for financial statement recognition
      and measurement of tax positions taken or expected to be taken on a tax
      return. This interpretation also provides guidance on derecognition,
      classification, interest and penalties, accounting in interim periods,
      disclosure, and transition. FIN 48 is effective for fiscal years beginning
      after December 15, 2006. The Company will be required to adopt this
      interpretation in the first quarter of fiscal year 2008 and is currently
      evaluating the impact of adopting this interpretation will have on its
      consolidated financial statements.

      In September 2006, the FASB issued FASB Statement 157, "Fair Value
      Measurements", for fiscal years beginning after November 15, 2006. The
      company will be required to adopt this for the fiscal year March 31, 2007
      and is presently evaluating the impact of adopting this standard on its
      consolidated financial statements.

      In September 2006, the Securities and Exchange Commission issued a Staff
      Accounting Bulletin ("SAB") 108, regarding the staff's views on the
      process of quantifying financial statement misstatements. This SAB
      addresses the diversity currently in practice and the potential for prior
      year misstatements to a potential buildup of improper amounts on the
      balance sheet. The Company is required to adapt this bulletin for the
      first fiscal year ending after November 15, 2006, and does not expect any
      significant impact on its consolidated financial statements.

3.    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.

<PAGE>

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

4.    PREPAID EXPENSES AND OTHER CURRENT ASSETS

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

                                                    September 30,     March 31,
                                                        2006            2006
                                                    ------------    ------------
Prepaid insurance                                   $    308,605    $    540,699
Fuel and lubricants                                    1,410,698         787,461
Deposits and other prepaids                              183,049         132,107
--------------------------------------------------------------------------------
                                                    $  1,902,352    $  1,460,267
================================================================================

<PAGE>

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

5.    BLOCKED ACCOUNT SECURITY AGREEMENT

      On August 1, 2006, Rand Finance Corp. entered into a Blocked Account
      Security Agreement with National Commercial Capital Company, LLC., and
      deposited $2,700,000 on August 1, 2006 into a blocked account. The blocked
      account represents amounts which may be drawn by Wisconsin & Michigan
      Steamship Company ("WMS") under the Senior Subordinated Note Purchase
      Agreement between, among others, Rand Finance Corp. and WMS. Amounts on
      deposit in the blocked account will become available to the Company after
      October 31, 2008.

6.    PROPERTY AND EQUIPMENT

      Property and equipment are comprised of the following:

                                                  September 30,      March 31,
                                                       2006            2006
                                                  -------------    -------------
Cost
  Vessels                                         $  60,452,632    $  39,643,272
  Vessel under capital lease (Note 12)                7,418,536        7,377,827
  Leasehold improvements                              1,394,815        1,387,539
  Furniture and equipment                               102,013           47,712
  Computer equipment                                     30,171            9,979
--------------------------------------------------------------------------------
                                                  $  69,398,167    $  48,466,329
================================================================================
Accumulated depreciation
  Vessels                                         $   2,208,517    $     253,303
  Vessel under capital lease (Note 12)                  353,657           44,551
  Leasehold improvements                                 65,987            7,638
  Furniture and equipment                                 8,850               --
  Computer equipment                                      5,266               --
--------------------------------------------------------------------------------
                                                  $   2,642,277    $     305,492
--------------------------------------------------------------------------------
                                                  $  66,755,890    $  48,160,837
================================================================================

<PAGE>

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

7.    DEFERRED DRYDOCK COSTS

      Deferred charges are comprised of the following:

                                                  September 30,      March 31,
                                                       2006            2006
                                                  -------------    -------------
Drydock expenditures                              $   1,711,970    $   1,614,173
Accumulated amortization                                168,682               --
                                                  ------------------------------
                                                  $   1,543,288    $   1,614,173
================================================================================

8.    GOODWILL AND INTANGIBLE ASSETS

      Intangibles are comprised of the following:

                                                  September 30,       March 31,
                                                      2006              2006
                                                  -------------    -------------
Goodwill                                          $   6,362,952    $   6,362,952
================================================================================
Intangible assets
   Deferred financing costs                       $   1,133,993    $     572,397
   Chartering agreement costs                           470,487               --
   Trademarks, trade names                              943,543          914,968
   Non-competition agreements                         2,162,573        2,097,082
   Customer relationships and contracts              10,805,870       10,478,625
--------------------------------------------------------------------------------
   Total identifiable intangibles                 $  15,516,466    $  14,063,072
--------------------------------------------------------------------------------
Accumulated amortization
   Deferred financing
costs                                             $      96,530    $          --
   Chartering agreement costs                            35,895
   Trademarks, trade names                               54,435            7,083
   Non-competition agreements                           346,565           45,094
   Customer relationships and contracts                 430,456           68,566
--------------------------------------------------------------------------------
                                                        963,881          120,743
--------------------------------------------------------------------------------
Total intangible assets                           $  14,552,585    $  13,942,329
================================================================================

      Intangible asset amortization over the next five years is estimated using
      the exchange rate at acquisition as follows:

            2007                                                $      1,775,616
            2008                                                       1,775,616
            2009                                                       1,344,765
            2010                                                         932,846
            2011                                                         834,429
      --------------------------------------------------------------------------
                                                                $      6,663,272
      ==========================================================================

<PAGE>

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

9.    BANK INDEBTEDNESS

      At September 30, 2006, the Company had authorized operating lines of
      credit in the amounts of $3,000,000 Cdn and $6,500,000 US (March 2006 -
      $2,300,000 Cdn and $3,500,000 US) with its senior lender, and was
      utilizing $4,097,245 on the revolver (March 2006 - $nil), and 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 11.
      The effective rate at September 30, 2006 was 8.33% on the U.S. revolver
      and 7.00% on the Canadian revolver.

      On August 1, 2006, Lower Lakes Towing, Ltd., LLTC, Grand River Navigation
      Company, Inc., Rand LL Holdings, each subsidiaries of Rand entered into a
      First Amendment (the "Amendment") to the Credit Agreement, dated March 3,
      2006, with General Electric Capital Corporation, as Agent and a lender,
      and GE Canada Finance Holding Company, as a lender, and certain of each
      such party's affiliates (the "Credit Agreement"). The Amendment increased
      the Canadian revolving loan commitment by $700,000 Cdn. to $3,000,000 Cdn.
      and the U.S. revolving loan commitment by $3,000,000 to $6,500,000. In
      addition the total of Canadian and U.S. seasonal facilities was increased
      by a total of $2,000,000 to a total of $4,000,000, effective with the
      Amendment.

10.   ACCRUED LIABILITIES

      Accrued liabilities are comprised of the following:

                                               September 30,         March 31,
                                                   2006                2006
                                              ---------------    ---------------
Transaction costs                             $        50,000    $       779,966
Payroll                                             1,860,959            850,342
Legal and professional fees                           727,496            624,658
Interest                                              201,498            150,021
Preferred stock dividends                             680,835             90,417
Other                                                 143,647            119,755
                                              ----------------------------------
                                              $     3,664,435    $     2,615,159
================================================================================

11.   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
      senior credit facility with a syndicate of lenders, including General
      Electric Capital Corporation, as agent and as a lender. The senior credit
      facility currently provides for (i) a revolving credit facility under
      which Lower Lakes may borrow up to Cdn $3,000,000 and an additional
      seasonal facility of US $4,000,000, subject to limitations, (ii) a
      revolving credit facility under which Lower Lakes Transportation may
      borrow up to US $6,500,000 and an additional seasonal facility of US
      $4,000,000, 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, provided that the total of the US and Canadian
      Seasonal facilities does not exceed $4,000,000. Borrowings under the
      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 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 $530,000
      per quarter shall be payable in equal quarterly instalments during the
      period from September 2006 through to December 2006, (ii) an aggregate of
      Cdn $2,544,000 shall be payable in four equal quarterly instalments of
      $636,000 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 $100,000 per quarter shall be
      payable in quarterly

<PAGE>

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

11.   LONG-TERM DEBT (continued)

      instalments during the period from September 2006 through to December
      2006, (ii) an aggregate of US $480,000 per annum 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 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 senior credit facility),
      plus 2% per annum or (ii) the BA Rate (as defined in the 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 senior credit facility) plus 3.00% per annum, or (ii)
      the US Base Rate (as defined in the senior credit facility), plus 2% per
      annum.

      Obligations under the 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
      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 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 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 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 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 senior credit facility being
      accelerated.

      The effective interest rate on the term loans at September 30, 2006 were
      8% on the Canadian term loan and 10.25% on the U.S. term loan.

<PAGE>

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

11.   LONG-TERM DEBT (continued)

<TABLE>
<CAPTION>
                                                                                 September 30,         March 31,
                                                                                     2006                2006
                                                                                 -------------      --------------
<S>                                                                              <C>                <C>
       a) Term  loan  bearing  interest  at  Canadian  Prime  rate plus 2% or
          Canadian  BA rate  plus 3% at the  Company's  option.  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.                    $   18,493,334     $   18,150,685

       b) Term loan bearing  interest at U.S. Base rate plus 2% or U.S. LIBOR
          rate plus 3% at the Company's option.  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.                                                      3,900,012          4,000,000

       c) Subordinated  note bearing  Payment in Kind (PIK) interest  at 10%.
          No  principal  payments  until  July 31,  2009,  at which  time the
          entire  balance of the note and PIK  interest  is due.  The note is
          unsecured.                                                                  2,237,278                 --
       -----------------------------------------------------------------------------------------------------------
       d) Senior  note  bearing  interest  at a rate of  9.06%.  The note  is
          repayable in quarterly  payments of $362,500,  beginning  on  March
          31, 2007, and the balance is due  December 31, 2008.  The  note  is
          secured  by a mortgage on three  time-chartered   vessels  and lien
          on  all  Wisconsin  & Michigan Steamship Company assets.                   14,500,000                 --
       -----------------------------------------------------------------------------------------------------------
                                                                                 $   39,130,624     $   22,150,685
       Less amounts due within 12 months                                              3,728,765          1,772,055
       -----------------------------------------------------------------------------------------------------------
                                                                                 $   35,401,859     $   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 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 September 30, 2006.

      Principal payments are due as follows:

                   2007                                         $  3,728,765
                   2008                                            4,206,103
                   2009                                           16,955,881
                   2010                                            2,756,103
                   2011                                           11,483,772
                 -----------------------------------------------------------
                                                                $ 39,130,624
                 ===========================================================

<PAGE>

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

12.   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 13, 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 6).

      The following is a schedule of the future minimum obligation of remaining
      annual payments under the terms of the leaseback determined using the
      implicit borrowing rate in the lease as of September 30, 2006 and assuming
      that the repurchase outlined in Note 13 is not completed and the vessel
      remains on charter hire:

                  2007                                             $    116,666
                  2008                                                  350,000
                  2009                                                  350,000
                  2010                                                  500,000
                  2011                                                  500,000
            Thereafter                                                4,500,000
                                                                   ------------
            Total minimum payments                                 $  6,316,666
            Less: Amount representing imputed interest
            (at 17.2%)                                                4,228,881
                                                                   ------------
            Present value of net minimum payments
            (see note (a) below)                                   $  2,087,785
                                                                   ============

      (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 September 30,
      2006 was $2,087,785.

<PAGE>

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

13.   COMMITMENTS

      As disclosed in Note 12, 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 intends to exercise its purchase option relating to the Manistee
      during the first calendar quarter of 2007.

      The Company has also entered into a bareboat charter agreement for the
      McKee Sons barge which expires in 2018. Total remaining annual 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                                         $  225,000
                    2008                                            675,000
                    2009                                            675,000
                    2010                                            675,000
                    2011                                            675,000
            Thereafter                                            4,725,000
            ===============================================================
                                                                 $7,650,000
            ===============================================================

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

14.   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 reserve of $400,000 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.

<PAGE>

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

15.   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 the Company's common stock at the price of
      $5.00 per share. The warrants expire on October 26, 2008. The Company 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 Company's
      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 the Company's 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 the Company's
      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 the Company, 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, the
      Company has agreed to meet these conditions and use the Company's best
      efforts to maintain a current prospectus relating to the common stock
      issuable upon exercise of the warrants. However, the Company cannot make
      the assurance that it 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, the Company 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, the Company 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, the Company would issue an additional
      600,000 shares of our common stock and receive additional gross proceeds
      of $3,750,000. The Company estimates 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

<PAGE>

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

15.   STOCKHOLDERS' EQUITY (continued)

      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.

      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 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.

      On August 1st, 2006, pursuant to the terms of a Stock Purchase Agreement,
      effective as of the same date (the "Stock Purchase Agreement"), Rand
      issued to a group of accredited investors 2,402,957 shares of common
      stock, par value $0.0001, for $5.41 per share, or an aggregate purchase
      price of approximately $13,000,000.

                                                      Number
                                                   Outstanding     Stated amount
                                                   -----------------------------
Common stock                                        8,002,957      $         800
Preferred stock                                      300,000       $  15,000,000

<PAGE>

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

16.   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.

17.   INTEREST EXPENSE

      Interest expense is comprised of the following:

<TABLE>
<CAPTION>
                                          Three months        Three months         Six months
                                             ended               ended               ended            Six months
                                         September 30,       September 30,       September 30,           ended
                                              2006                2005                2006           Sept 30, 2005
                                         ---------------------------------------------------------------------------
       <S>                               <C>                 <C>                 <C>                 <C>
       Bank indebtedness                 $     123,038       $         --        $      200,810      $          --
       Long term debt - senior                 701,261                 --             1,166,758                 --
       Long term debt - subordinated            37,278                 --                37,278                 --
       Capital lease                           106,493                 --               207,393                 --
       -----------------------------------------------------------------------------------------------------------
                                         $     968,070       $         --        $    1,612,239      $          --
       ===========================================================================================================
</TABLE>

18.   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:

<TABLE>
<CAPTION>
                                         Three months
                                             ended              Three months         Six months       Six months
                                           Sept 30,                ended               ended             ended
                                             2006              Sept,30, 2006       Sept 30, 2006     Sept,30, 2006
                                         ---------------------------------------------------------------------------
       <S>                               <C>                 <C>                 <C>                 <C>
       Revenues by country
         Canada                          $    13,072,057     $           --      $   26,625,007      $          --
         United States                        14,315,746                 --          23,007,912                 --
       -----------------------------------------------------------------------------------------------------------
                                         $    27,387,803     $           --      $   49,632,919      $          --
       ===========================================================================================================

       Net Income by country
         Canada                          $     1,480,075     $           --      $    2,995,396      $          --
         United States                           468,350                 --           (327,246)                 --
       -----------------------------------------------------------------------------------------------------------
                                         $     1,948,425     $           --      $    2,668,150      $          --
       ===========================================================================================================
</TABLE>

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

<PAGE>

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

18.   SEGMENT INFORMATION (continued)


                                            September 30,
                                                 2006        March 31, 2006
                                            -------------------------------

      Property and equipment by
      country
        Canada                              $ 31,071,094      $ 30,416,419
        United States                         35,684,796        17,744,418
      --------------------------------------------------------------------
                                            $ 66,755,890      $ 48,160,837
      ====================================================================

      Total assets by country
        Canada                              $ 59,201,070      $ 58,033,856
        United States                         66,814,245        28,734,980
      --------------------------------------------------------------------
                                            $126,015,315      $ 86,768,836
      ====================================================================

19.   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 September 30, 2006 is not indicative of a full years'
      operations, due to the seasonal nature of the Company's business.

<PAGE>

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

20.   EARNINGS PER SHARE

      The company had a total of 8,002,957shares issued and outstanding, out of
      an authorized total of 50,000,000 shares. The fully diluted calculation
      utilizes a total of 17,895,696 and 16,862,299 shares for the three and six
      month periods ending September 30, 2006, based on the following additional
      share calculation. Warrants issued from the initial prospectus and
      overallotment convert to 8,283,076 based on the average quarterly share
      price as of September 30, 2006 of $5.55, and 8,041,958 based on the six
      month average quarterly share price as of September 30, 2006 of $5.72.
      Conversion of the convertible preferred shares equates 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, as the exercise price of the options and
      warrants are in excess of that of the underlying instruments.

<TABLE>
<CAPTION>
                                                     Three months    Three months    Six months      Six months
                                                         ended           ended          ended          ended
                                                       September     September 30,    September      September
                                                        30,2006           2005         30, 2006       30, 2005
                                                     -----------------------------------------------------------
<S>                                                   <C>             <C>            <C>             <C>
Numerator:

Net income                                            $ 2,329,005     $    40,454    $ 3,341,107     $    66,561

     Preferred stock dividends                            298,041               -        590,418               -
     Minority interest                                     82,539               -         82,539               -
================================================================================================================
Income available to common shareholders               $ 1,948,425     $    40,454    $ 2,668,150     $    66,561
================================================================================================================
Denominator:

Weighted average common shares for basic EPS            7,193,265       5,600,000      6,400,986       5,600,000
================================================================================================================
Effect of dilutive securities:

Total  outstanding 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                                  5.55            5.27           5.72            5.26
================================================================================================================
   Weighted average warrants (total outstanding /
     average price)                                     8,283,076               -      8,041,958               -
================================================================================================================
   Weighted average convertible preferred shares
     at $6.20                                           2,419,355               -      2,419,355               -
================================================================================================================
Weighted average common shares for diluted EPS         17,895,696       5,600,000     16,862,299       5,600,000
================================================================================================================
Basic EPS                                                  $ 0.27           $0.01          $0.42           $0.01
Diluted EPS                                                $ 0.13           $0.01          $0.19           $0.01
================================================================================================================
</TABLE>

<PAGE>

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

21.   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.

<PAGE>

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

22.   PRO FORMA INFORMATION

      Giving effect to the purchase transaction immediately prior to each of the
      pro forma reporting periods presented, 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. There have been no adjustments to reflect higher general and
      administrative expense at the Company during the pro forma periods. There
      is a pro forma loss per share due to the pro forma effect of convertible
      preferred stock dividends in the period ended December 31, 2005.

<TABLE>
<CAPTION>
                                                                      Pro Forma                       Pro Forma       Pro Forma
                                                    Three Months     Three months     Six months      Six months        Year
                                                        ended           ended           ended           ended           ended
                                                    September 30,     September       September      September 30,   December 31,
Selected statement of operations data                    2006          30, 2005        30, 2006          2005            2005
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>               <C>              <C>             <C>           <C>
Revenue - Company operated vessels                  $ 26,066,926      17,820,738       45,959,229      33,322,259    $ 53,819,958
Revenue - Outside voyage charter revenue               1,320,877       1,485,862        3,673,690       3,047,984       7,420,577
---------------------------------------------------------------------------------------------------------------------------------
                                                      27,387,803      19,306,600       49,632,919      36,370,243    $ 61,240,535
Expenses
  Outside voyage charter fees                          1,307,140       1,443,487        3,625,041       3,005,313       7,379,638
  Vessel operating expenses                           18,189,956      12,370,765       32,485,629      23,677,275      40,628,366
  Non operational repairs and maintenance                     --              --           56,748          88,629       1,625,671
---------------------------------------------------------------------------------------------------------------------------------
                                                      19,497,096      13,814,252       36,167,418      26,771,217      49,633,675
---------------------------------------------------------------------------------------------------------------------------------
Income before general and administrative,              7,890,707       5,492,348       13,465,501       9,599,026      11,606,860
depreciation, amortization of drydock costs and
intangibles, other income and expenses and
income taxes
---------------------------------------------------------------------------------------------------------------------------------
  General and administrative                           1,680,766         758,802        2,959,003       1,463,746       3,276,188
  Depreciation and amortization of drydock costs
  and intangibles                                      1,747,797       1,277,885        3,238,876       2,527,605       4,972,759
  Loss on asset disposal                                      --              --               --              --         113,405
  Loss (gain) on foreign exchange                         52,592         (75,490)          89,278          28,039        (276,251)
---------------------------------------------------------------------------------------------------------------------------------
                                                       3,481,155       1,961,197        6,287,157       4,019,390       8,086,101
---------------------------------------------------------------------------------------------------------------------------------
Income before interest, other income and
expenses and income taxes                              4,409,552       3,531,151        7,178,344       5,579,636       3,520,759
---------------------------------------------------------------------------------------------------------------------------------

Net income                                             2,329,005       1,856,103        3,341,107       2,819,361         455,200
=================================================================================================================================
Net income (loss) per share - basic                 $       0.27    $       0.28     $       0.42    $       0.40          ($0.13)
Net income (loss) per share - diluted               $       0.13    $       0.11     $       0.19    $       0.17          ($0.13)
</TABLE>

<PAGE>

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

23.   MINORITY INTEREST

      In the normal course of business, the Company interacts with various
      entities that may be variable interest entities (VIEs) under the
      subjective guidelines of FIN 46R. Typical types of these entities are
      suppliers, customers, bareboat lessors, and charter hire lessors. WMS has
      been determined to be a VIE and, as such, has been consolidated in
      accordance with FIN-46R. The Company does not have any ownership interest
      in WMS and as a result 100% of the equity is shown as minority interest.

      On August 1, 2006, Lower Lakes Transportation Company ("LLTC"), an
      indirect wholly-owned subsidiary of Rand, entered into a Time Charter
      Agreement (the "Time Charter Agreement") with WMS, an unaffiliated third
      party. Under the Time Charter Agreement, WMS will make three United States
      flag vessels owned by WMS, the DAVID Z. NORTON, the EARL W. OGLEBAY and
      the WOLVERINE (the "Vessels"), available exclusively to LLTC for LLTC's
      use in providing transportation and storage services for its customers.
      The basic charter period under the Time Charter Agreement expires on
      December 31, 2008, and LLTC has the option to extend the charter period
      through December 31, 2013. The Time Charter Agreement also provides LLTC
      the option of purchasing the Vessels at any time during the charter period
      at a price based, in part, generally on the amount of WMS indebtedness
      outstanding at the time of purchase relating to WMS's acquisition and
      maintenance of the Vessels. Rand and its subsidiary, Rand LL Holdings
      Corp. ("Rand LL Holdings"), each executed separate guaranties in favor of
      WMS with respect to separate financial obligations of LLTC under the Time
      Charter Agreement. At the present time the Company has no intention of
      exercising its purchase option under the Time Charter Agreement.

<PAGE>

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

23.   MINORITY INTEREST (continued)

      The impact on the balance sheet and income statement for the period ending
      September 30, 2006 is shown below.

<TABLE>
<CAPTION>
                                                                 Rand Logistics Inc.      Impact of FIN          Consolidated
                                                                  September 30, 2006   46R presentation    September 30, 2006
                                                                 ------------------------------------------------------------
<S>                                                                      <C>                 <C>                  <C>
ASSETS
CURRENT

     Cash and cash equivalents                                             7,655,040          1,943,388             9,598,428
     Accounts receivable (Note 3)                                         14,024,701            219,387            14,244,088
     Prepaid expenses and other current assets (Note 4)                    2,152,352          (250,000)             1,902,352
     Income tax receivable                                                   185,795                  -               185,795
     Deferred income taxes                                                 1,173,404           (55,000)             1,118,404
-----------------------------------------------------------------------------------------------------------------------------
 Total current assets                                                     25,191,292                               27,049,067
                                                                                              1,857,775

BLOCKED ACCOUNT (Note 5)                                                   2,700,000                  -             2,700,000
PROPERTY AND EQUIPMENT, NET (Note 6)                                      48,234,952         18,520,938            66,755,890
DUE FROM RELATED COMPANY                                                     369,339          (369,339)                     -
DEFERRED INCOME TAXES                                                      7,051,533             20,110             7,051,533
DEFERRED DRYDOCK COSTS, NET (Note 7)                                       1,543,288                  -             1,543,288
INTANGIBLE ASSETS, NET (Note 8)                                           14,046,577            506,008            14,552,585
CHARTERING AGREEMENT COSTS                                                                            -
NOTE RECEIVABLE W&M                                                        2,150,000        (2,150,000)                     -
GOODWILL (Note 8)                                                          6,362,952                  -             6,362,952
-----------------------------------------------------------------------------------------------------------------------------
 Total assets                                                            107,649,933         18,365,382           126,015,315
=============================================================================================================================

LIABILITIES
CURRENT
     Bank indebtedness (Note 9)                                            4,097,245                  -             4,097,245
     Accounts payable                                                      7,370,474            400,421             7,770,895
     Accrued liabilities (Note 10)                                         3,069,723            594,712             3,664,435
     Income taxes payable                                                          -             99,000                99,000
     Deferred income taxes                                                   498,233                  -               498,233
     Current portion of long-term debt  (Note 11)                          2,641,265          1,087,500             3,728,765
     Current portion of long-term capital lease obligation -
     vessel lease (Note 12)                                                2,087,785                  -             2,087,785
=============================================================================================================================
Total current liabilities                                                 19,764,725          2,181,634            21,946,358
LONG-TERM DEBT  (Note 11)                                                 19,752,081         15,649,778            35,401,859
ACQUIRED MANAGEMENT BONUS PROGRAM (Note 21)                                3,000,000                  -             3,000,000
DEFERRED INCOME TAXES                                                     11,846,047           (35,000)            11,811,047
=============================================================================================================================
 Total liabilities                                                        54,362,852         17,796,412            72,159,264
COMMITMENTS AND CONTINGENCIES (Note 13 and 14)                                     -                  -                     -

STOCKHOLDERS' EQUITY
     Preferred stock, $.0001 par value,                                   14,900,000                               14,900,000
     Common stock, $.0001 par value                                              800                                      800
     Additional Paid-in Capital                                           37,579,051                  -            37,579,051
     Accumulated surplus (deficit)                                         1,155,652             86,431             1,242,083
     Minority Interest Variable Interest Entity                                    -            482,539               482,539
     Accumulated other comprehensive loss                                   (348,422)                                (348,422)
=============================================================================================================================
Total stockholders' equity                                                53,287,081            568,970            53,856,051
=============================================================================================================================
  Total liabilities and stockholders' equity                             107,649,933         18,365,382           126,015,315
=============================================================================================================================
</TABLE>

<PAGE>

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

23.   MINORITY INTEREST (continued)

<TABLE>
<CAPTION>
                                                             Rand
                                                             Logistics    Rand                      Consolidated
                                                             Three        Logistics                 Three         Consolidated
                                                             months       Six months                months        Six months
                                                             Ended        ended                     Ended         Ended
                                                             September    September    Impact of    September     September
                                                             30, 2006     30, 2006     Fin 46R      30, 2006      30, 2006
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                          <C>          <C>          <C>           <C>           <C>
REVENUE                                                      27,387,803   49,632,919            -    27,387,803    49,632,919
EXPENSES

      Outside voyage charter fees (Note 16)                   1,307,140    3,625,041            -     1,307,140     3,625,041
      Charter Hire                                            3,084,626    3,084,626   (3,084,626)            -             -
      Vessel operating expenses                              15,940,782   30,236,455    2,249,174    18,189,956    32,485,629
      Repairs and maintenance                                         -       56,748            -             -        56,748
      General and administrative                              1,579,931    2,858,168      100,835     1,680,766     2,959,003
      Depreciation                                            1,065,271    2,119,540      209,466     1,274,737     2,329,006
      Amortization of drydock costs                              84,077      168,065            -        84,077       168,065
      Amortization of intangibles                               438,983      791,805      (50,000)      388,983       741,805
      Loss on foreign exchange                                   52,592       89,278            -        52,592        89,278
-----------------------------------------------------------------------------------------------------------------------------
                                                             23,553,402   43,029,726    (575,151)    22,978,251    42,454,575
INCOME (LOSS) BEFORE OTHER INCOME AND EXPENSES AND INCOME
TAXES                                                         3,834,401    6,603,193      575,151     4,409,552     7,178,344

OTHER INCOME AND EXPENSES
Interest expense (Note 17)                                      718,368    1,362,537      249,702       968,070     1,612,239
Interest income                                                 (86,107)     (88,079)           -       (86,107)      (88,079)
Amortization of deferred financing costs                         29,460       58,897       37,479        66,939        96,376
-----------------------------------------------------------------------------------------------------------------------------
                                                                661,721    1,333,355      287,181       948,902     1,620,536

INCOME BEFORE INCOME TAXES                                    3,172,680    5,269,838      287,970     3,460,650     5,557,808

PROVISION (RECOVERY) FOR INCOME TAXES

Current                                                          (8,500)     (88,000)      99,000        90,500        11,000

Deferred                                                      1,021,145    2,185,701       20,000     1,041,145     2,205,701
-----------------------------------------------------------------------------------------------------------------------------
NET INCOME                                                    2,160,035    3,172,137      168,970     2,329,005     3,341,107

MINORITY INTEREST                                                     -            -       82,539        82,539        82,539

PREFERRED STOCK DIVIDENDS                                       298,041      590,418            -       298,041       590,418
NET INCOME APPLICABLE TO COMMON STOCKHOLDERS                  1,861,994    2,581,719                  1,948,425     2,668,150
=============================================================================================================================

Net earnings per share basic (Note 20)                             0.26         0.40                       0.27          0.42
Net earnings per share diluted                                     0.12         0.19                       0.13          0.19
Weighted average shares - Basic                               7,193,265    6,400,986                  7,193,265     6,400,986
Weighted average shares - Diluted                            17,895,696   16,862,299                 17,895,696    16,862,299
</TABLE>

<PAGE>

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

24.   SUBSEQUENT EVENTS

      Due to difficulties in implementing the Warrant Compensation Program
      described in the Company's Form 8-K filed August 10, 2006, and in lieu of
      the issuance of warrants under the Warrant Program, on October 18, 2006,
      the Company (or its subsidiary, in the case of employees of a subsidiary),
      in accordance with the authorization of the Compensation Committee of the
      Board of Directors, awarded certain cash compensation to those directors,
      officers and employees of the Company and its subsidiaries who were
      intended to receive warrants under the Warrant Program, not less than the
      after-tax proceeds of which are being used by the recipients to fund the
      purchase of Company warrants in open market transactions pursuant to
      arrangements entered into by each recipient in accordance with Rule
      10b5-1(c) under the Securities Exchange Act of 1934, as amended.

<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

      Forward-Looking Statement. 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-QSB 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.

      Recent Developments. On August 1, 2006, Lower Lakes Transportation Company
("LLTC"), an indirect wholly-owned subsidiary of Rand, entered into a Time
Charter Agreement (the "Time Charter Agreement") with Wisconsin & Michigan
Steamship Company ("WMS"), an unaffiliated third party. Under the Time Charter
Agreement, WMS will make three United States flag vessels owned by WMS, the
DAVID Z. NORTON, the EARL W. OGLEBAY and the WOLVERINE (the "Vessels"),
available exclusively to LLTC for LLTC's use in providing transportation and
storage services for its customers. The basic charter period under the Time
Charter Agreement expires on December 31, 2008, and LLTC has the option to
extend the charter period through December 31, 2013. The Time Charter Agreement
also provides LLTC the option of purchasing the Vessels at any time during the
charter period at a price based, in part, generally on the amount of WMS
indebtedness outstanding at the time of purchase relating to WMS's acquisition
and maintenance of the Vessels. Rand and its subsidiary, Rand LL Holdings Corp.
("Rand LL Holdings"), each executed separate guarantees in favor of WMS with
respect to separate financial obligations of LLTC under the Time Charter
Agreement.

      Also on August 1, 2006, pursuant to the terms of a Stock Purchase
Agreement, effective as of the same date (the "Stock Purchase Agreement"), Rand
issued to a group of accredited investors 2,402,957 shares of common stock, par
value $0.0001, for $5.41 per share, or an aggregate purchase price of
approximately $13,000,000.

      Also on August 1, 2006, Rand Finance Corp., a newly-formed subsidiary of
the Registrant, entered into a Senior Subordinated Note Purchase Agreement with
WMS pursuant to which Rand Finance will lend WMS (i) $2,150,000 to finance, in
part, WMS's acquisition of the Vessels from Oglebay Norton Marine Services
Company, LLC, (ii) up to $1,650,000 for future capital expenditures relating to
the Vessels and (iii) up to $2,700,000 to the extent required for WMS to satisfy
certain obligations of WMS to National City Commercial Capital Company, LLC, the
senior lender to WMS for its purchase of the vessels from Oglebay. The loans
mature on July 31, 2009 and bear interest, payable in kind, at the rate of 10%
per annum.

      The loans are subordinate in right to repayment to WMS's obligations to
National City and are also subordinate in right to repayment to WMS's $2,200,000
note to Oglebay, representing a portion of the purchase price for the vessels
purchased from Oglebay.

      Also on August 1, 2006, Lower Lakes Towing, Ltd., LLTC, Grand River
Navigation Company, Inc., and Rand LL Holdings, each subsidiaries of the
Registrant, entered into a First Amendment (the "Amendment") to the Credit
Agreement, dated March 3, 2006, with General Electric Capital Corporation, as
Agent and a lender, and GE Canada Finance Holding Company, as a lender, and
certain of each such party's affiliates (the "Credit Agreement"). The Amendment
increases the Canadian revolving loan commitment by $700,000 Cdn. to $3,000,000
Cdn. and the U.S. revolving loan commitment by $3,000,000 to $6,500,000. In
addition the total of Canadian and U.S. seasonal facilities was increased by at
total of $2,000,000 to a total of $4,000,000, effective with the Amendment.

<PAGE>

      The Company does not presently intend to exercise its purchase option for
the Vessels under the Time Charter Agreement. However, the Company does intend
to exercise its purchase option for the Manistee during the first calendar
quarter of 2007.

      Plan of Operation. The following presentation of the plan of operation of
Rand has been prepared by management and should be read in conjunction with the
financial statements and notes thereto included in, or referred to, in this
report. 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
$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, 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 Rand. In conjunction with the
foregoing transactions, as of March 3, 2006, Rand changed its name to Rand
Logistics, Inc.

<PAGE>

      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
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.

<PAGE>

      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 and time charter agreements. Since October
            1999, Lower Lakes has added ten 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.

      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.

      Rand changed its fiscal year end from December 31 to March 31, effective
March 3, 2006.

<PAGE>

      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 September 30, 2006 financial statements for a
discussion of outstanding options and warrants.

ITEM 3. CONTROLS AND PROCEDURES.

      An evaluation of the effectiveness of our disclosure controls and
procedures as of September 30, 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.

      In connection with the evaluation of the Company's internal controls
during the last fiscal quarter, 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, as of May 19, 2006, the date of their internal control review.

      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;

      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
continues to evaluate the above matters, as well as possible changes to the
Company's internal controls to address such matters.

<PAGE>

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

      Rand is not involved in any legal proceedings which may have a material
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 material 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. It is expected that
these claims would be covered by insurance if they involve liabilities such as
those which may arise from collision, other marine casualty, damage to cargoes,
oil pollution, death or personal injuries to crew, subject to customary
deductibles. Those claims, however, even if lacking merit, could result in the
expenditure of significant financial and managerial resources.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

      None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

      None.

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

      None.

ITEM 5. OTHER INFORMATION.

      None.

<PAGE>

PART II - OTHER INFORMATION

ITEM 6. 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)
   3.1.3        Amended and Restated Certificate of Designations, filed with the
                Secretary of State of State of Delaware on August 8, 2006.(11)
   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)
   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)

<PAGE>

   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)
   10.22        Time Charter Agreement dated August 1, 2006. (10)
   10.23        Guaranty by Registrant dated August 1, 2006. (10)
   10.24        Guaranty by Rand LL Holdings dated August 1, 2006.(10)
   10.25        Stock Purchase Agreement dated August 1, 2006.(10)
   10.26        Subordinated Note Purchase Agreement dated August 1, 2006. (10)
   10.27        Amendment to Credit Agreement dated August 1, 2006.(10)
   10.28        Award Agreement with Edward Levy, dated October 11, 2006 (12)
   10.29        Award Agreement with Edward Levy, dated October 11, 2006 (12)
   10.30        Award Agreement with Lawrence Levy, dated October 11, 2006 (12)
   10.31        Award Agreement with Scott Bravener, dated October 18, 2006 (12)
   10.32        Award Agreement with Joseph W. McHugh, Jr., dated October 18,
                2006 (12)
   10.33        Award Agreement with James Siddall, dated October 18, 2006 (12)
   10.34        Award Agreement with Jeffrey P. Botham, dated October 18, 2006
                (12)
   10.34        Award Agreement with Isaac Kier, dated October 18, 2006 (12)
   10.35        Award Agreement with Jonathan Brodie, dated October 18, 2006
                (12)
   10.33        Award Agreement with H. Cabot Lodge III, dated October 18, 2006
                (12)
   14           Code of Ethics.(6)
   21           Subsidiaries of Rand.(9)
   31.1         Certification of Chief Executive Officer pursuant to Section 302
                of the Sarbanes-Oxley Act of 2002.(9)
   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(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.

<PAGE>

(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.
(10)  Incorporated by reference to the Registrant's Current Report on Form 8-K,
      filed with the Securities and Exchange Commission on August 2, 2006.
(11)  Incorporated by reference to the Registrant's Current Report on Form 8-K,
      filed with the Securities and Exchange Commission on August 10, 2006.
(12)  Incorporated by reference to the Registrant's Current Report on Form 8-K,
      filed with the Securities and Exchange Commission on October 19, 2006.

<PAGE>

                                   SIGNATURES

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

                                                    RAND LOGISTICS, INC.
                                                    (Registrant)


Date: November 20, 2006                             /s/ Laurence S. Levy
      -----------------                             ----------------------------
                                                    Laurence S. Levy
                                                    Chief Executive Officer


Date: November 20, 2006                             /s/ Joseph W. McHugh, Jr.
      -----------------                             ----------------------------
                                                    Joseph W. McHugh, Jr.
                                                    Chief Financial Officer

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                                  EXHIBIT INDEX

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)
   3.1.3        Amended and Restated Certificate of Designations, filed with the
                Secretary of State of State of Delaware on August 8, 2006.(11)
   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)
   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)

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   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)
   10.22        Time Charter Agreement dated August 1, 2006. (10)
   10.23        Guaranty by Registrant dated August 1, 2006. (10)
   10.24        Guaranty by Rand LL Holdings dated August 1, 2006.(10)
   10.25        Stock Purchase Agreement dated August 1, 2006.(10)
   10.26        Subordinated Note Purchase Agreement dated August 1, 2006. (10)
   10.27        Amendment to Credit Agreement dated August 1, 2006.(10)
   10.28        Award Agreement with Edward Levy, dated October 11, 2006 (12)
   10.29        Award Agreement with Edward Levy, dated October 11, 2006 (12)
   10.30        Award Agreement with Lawrence Levy, dated October 11, 2006 (12)
   10.31        Award Agreement with Scott Bravener, dated October 18, 2006 (12)
   10.32        Award Agreement with Joseph W. McHugh, Jr., dated October 18,
                2006 (12)
   10.33        Award Agreement with James Siddall, dated October 18, 2006 (12)
   10.34        Award Agreement with Jeffrey P. Botham, dated October 18, 2006
                (12)
   10.34        Award Agreement with Isaac Kier, dated October 18, 2006 (12)
   10.35        Award Agreement with Jonathan Brodie, dated October 18, 2006
                (12)
   10.33        Award Agreement with H. Cabot Lodge III, dated October 18, 2006
                (12)
   14           Code of Ethics.(6)
   21           Subsidiaries of Rand.(9)
   31.1         Certification of Chief Executive Officer pursuant to Section 302
                of the Sarbanes-Oxley Act of 2002.(9)
   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(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.

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(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.
(10)  Incorporated by reference to the Registrant's Current Report on Form 8-K,
      filed with the Securities and Exchange Commission on August 2, 2006.
(11)  Incorporated by reference to the Registrant's Current Report on Form 8-K,
      filed with the Securities and Exchange Commission on August 10, 2006.
(12)  Incorporated by reference to the Registrant's Current Report on Form 8-K,
      filed with the Securities and Exchange Commission on October 19, 2006.