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 December 31, 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 February 2, 2007, there were approximately 8,006,777 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>
                                                                         December 31,        March 31,
                                                                            2006               2006
                                                                       --------------     --------------
<S>                                                                    <C>                <C>
ASSETS
CURRENT
     Cash and cash equivalents                                         $    9,367,480     $    2,574,325
     Accounts receivable (Note 3)                                          13,765,481          2,107,282
     Prepaid expenses and other current assets (Note 4)                     1,680,720          1,460,267
     Income tax receivable                                                    237,795                 --
     Deferred income taxes                                                  1,187,023          1,160,651
--------------------------------------------------------------------------------------------------------

Total current assets                                                       26,238,499          7,302,525
BLOCKED ACCOUNT (Note 5)                                                    2,700,000                 --
PROPERTY AND EQUIPMENT, NET (Note 6)                                       64,290,070         48,160,837
DEFERRED INCOME TAXES                                                       7,080,235          9,386,020
DEFERRED DRYDOCK COSTS, NET (Note 7)                                        1,828,969          1,614,173
INTANGIBLE ASSETS, NET (Note 8)                                            13,731,319         13,942,329
GOODWILL (Note 8)                                                           6,362,952          6,362,952
--------------------------------------------------------------------------------------------------------
Total assets                                                           $  122,232,044     $   86,768,836
========================================================================================================

LIABILITIES
CURRENT
     Bank indebtedness (Note 9)                                        $    3,612,315     $           --
     Accounts payable                                                       7,598,855          7,617,899
     Accrued liabilities (Note 10)                                          3,221,111          2,615,159
     Income taxes payable                                                      31,000             50,787
     Deferred income taxes                                                    530,934            405,886
     Current portion of long-term debt  (Note 11)                           4,112,941          1,772,055
     Current portion of long-term capital lease obligation - vessel
     lease (Note 12)                                                        2,077,612          2,108,132
--------------------------------------------------------------------------------------------------------
Total current liabilities                                                  21,184,768         14,569,918

LONG-TERM DEBT  (Note 11)                                                  33,763,144         20,378,630
ACQUIRED MANAGEMENT BONUS PROGRAM (Note 21)                                 3,000,000          3,000,000
DEFERRED INCOME TAXES                                                      11,554,599         12,063,059
--------------------------------------------------------------------------------------------------------
Total liabilities                                                          69,502,511         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                                               801                560
     Authorized 50,000,000 shares, Issued and outstanding 8,006,777
     shares (Note 15)
     Additional Paid-in Capital                                            37,598,150         24,629,291
     Accumulated surplus (deficit)                                          1,473,852         (1,426,067)
     Minority Interest  (Note 24)                                              40,058                 --
     Accumulated other comprehensive loss                                  (1,283,328)        (1,346,555)
--------------------------------------------------------------------------------------------------------
Total stockholders' equity                                                 52,729,533         36,757,229
--------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity                             $  122,232,044     $   86,768,836
========================================================================================================
</TABLE>

            See accompanying notes to unaudited financial statements


                                       2
<PAGE>

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

<TABLE>
<CAPTION>
                                                                         Three months                               Nine months
                                                  Three months               ended                                     ended
                                                      ended               December 31,      Nine months ended       December 31,
                                                December 31, 2006            2005           December 31, 2006          2005
                                                -----------------     -----------------     -----------------     -----------------
<S>                                             <C>                   <C>                   <C>                   <C>
REVENUE                                         $      26,104,134     $              --     $      75,737,053     $              --
-----------------------------------------------------------------------------------------------------------------------------------

EXPENSES

      Outside voyage charter fees (Note 16)             1,309,961                    --             4,935,002                    --
      Vessel operating expenses                        19,818,927                    --            52,304,556                    --
      Repairs and maintenance                              40,314                    --                97,062                    --
      General and administrative                        1,954,780               111,622             4,913,783               255,361
      Depreciation                                      1,407,585                    --             3,736,591                    --
      Amortization of drydock costs                        82,741                    --               250,806                    --
      Amortization of intangibles                         349,146                    --             1,090,951                    --
      Loss on foreign exchange                             88,680                    --               177,958                    --
-----------------------------------------------------------------------------------------------------------------------------------
                                                       25,052,134               111,622            67,506,709               255,361
-----------------------------------------------------------------------------------------------------------------------------------

INCOME (LOSS) BEFORE OTHER INCOME AND
EXPENSES AND INCOME TAXES                               1,052,000              (111,622)            8,230,344              (255,361)
-----------------------------------------------------------------------------------------------------------------------------------

OTHER INCOME AND EXPENSES
      Interest expense (Note 17)                        1,024,371                    --             2,636,610                    --
      Interest income                                    (135,164)             (174,974)             (223,243)             (469,582)
      Amortization of deferred financing
      costs                                               142,045                    --               238,421                    --
-----------------------------------------------------------------------------------------------------------------------------------
                                                        1,031,252              (174,974)            2,651,788              (469,582)
-----------------------------------------------------------------------------------------------------------------------------------

INCOME BEFORE INCOME TAXES                                 20,748                63,352             5,578,556               214,221

PROVISION (RECOVERY) FOR INCOME TAXES
      Current                                             (68,000)               77,941               (57,000)              162,249
      Deferred                                           (244,910)                   --             1,960,791                    --
-----------------------------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS)                               $         333,658     $         (14,589)    $       3,674,765     $          51,972
===================================================================================================================================

MINORITY INTEREST                               $         442,481     $              --     $         359,942     $              --

COMMON STOCK DIVIDENDS (VIE)                             (250,000)                   --              (250,000)                   --

PREFERRED STOCK DIVIDENDS                                (294,370)                   --              (884,788)                   --
-----------------------------------------------------------------------------------------------------------------------------------

NET INCOME APPLICABLE TO COMMON STOCKHOLDERS    $         231,769     $         (14,589)    $       2,899,919     $          51,972
-----------------------------------------------------------------------------------------------------------------------------------

      Net earnings per share basic (Note 20)    $             .03     $             .00     $             .42     $             .01
      Net earnings per share diluted                          .03                   .00                   .35                   .01
      Weighted average shares - Basic                   8,003,754             5,600,000             6,937,185             5,600,000
      Weighted average shares - Diluted                12,466,881             5,600,000            10,830,400             5,600,000
</TABLE>

            See accompanying notes to unaudited financial statements


                                       3
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                                       Additional
                                              Common Stock                   Preferred Stock            Paid-In
                                          Shares         Amount          Shares          Amount         Capital
                                      ------------    ------------    ------------    ------------    ------------
<S>                                      <C>          <C>                  <C>        <C>             <C>
Balances, March 31, 2005                 5,600,000    $        560              --              --    $ 19,884,465
------------------------------------------------------------------------------------------------------------------
       Net income 9 months                      --              --              --              --              --
       ended December 31, 2005
------------------------------------------------------------------------------------------------------------------

Balances, December 31, 2005              5,600,000    $        560              --              --    $ 19,884,465
       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                               --              --              --              --       4,744,826

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

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

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

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

Balances, March 31, 2006                 5,600,000    $        560         300,000    $ 14,900,000    $ 24,629,291
------------------------------------------------------------------------------------------------------------------

       Net income                               --              --              --              --              --

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

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

       Comprehensive income                     --              --              --              --              --
==================================================================================================================

Balances, June 30, 2006                  5,600,000    $        560         300,000    $ 14,900,000    $ 24,629,291

       Net income                               --              --              --              --              --

       Minority Interest                        --              --              --              --              --

       Preferred dividend issuable              --              --              --              --              --
         Shares issued, net of
         issuance costs of $49,997       2,402,957             240              --              --      12,949,760

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

       Comprehensive income                     --              --              --              --              --
==================================================================================================================

Balances, September 30, 2006             8,002,957    $        800         300,000    $ 14,900,000    $ 37,579,051

       Net income                               --              --              --              --              --

       Minority Interest                        --              --              --              --              --

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

         Common stock dividend VIE              --              --              --              --              --

         Warrant  conversion                 3,820               1              --              --          19,099

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

       Comprehensive income (loss)              --              --              --              --              --
==================================================================================================================

Balances, December 31, 2006              8,006,777    $        801         300,000    $ 14,900,000    $ 37,598,150
==================================================================================================================

<CAPTION>
                                      Accumulated        Minority          Other            Total
                                         Surplus         Interest      Comprehensive    Stockholders'
                                        (Deficit)          VIE         Income (Loss)       Equity
                                      ------------     ------------    -------------    -------------
<S>                                   <C>              <C>             <C>              <C>
Balances, March 31, 2005              $     11,457               --              --     $ 19,896,482
----------------------------------------------------------------------------------------------------
       Net income 9 months                  51,972               --              --           51,972
       ended December 31, 2005
----------------------------------------------------------------------------------------------------

Balances, December 31, 2005           $     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

       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              $ (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               $   (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              --               --              --       12,950,000

       Translation adjustments                  --               --          (8,330)          (8,330)

       Comprehensive income                     --               --              --        2,320,675
====================================================================================================

Balances, September 30, 2006          $  1,242,083     $    482,539    $   (348,422)    $ 53,856,051

       Net income                          333,658               --              --          333,658

       Minority Interest                   442,481         (442,481)             --               --

       Preferred dividend issuable        (294,370)              --              --         (294,370)

         Common stock dividend VIE        (250,000)              --              --         (250,000)

         Warrant  conversion                    --               --              --           19,100

       Translation adjustments                  --               --        (934,906)        (934,906)

       Comprehensive income (loss)              --               --              --         (601,248)
====================================================================================================

Balances, December 31, 2006           $  1,473,852     $     40,058    $ (1,283,328)    $ 52,729,533
====================================================================================================
</TABLE>

            See accompanying notes to unaudited financial statements


                                       4
<PAGE>

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

<TABLE>
<CAPTION>
                                                                            Nine months ended    Nine months ended
                                                                            December 31, 2006    December 31, 2005
                                                                            -----------------    -----------------
<S>                                                                            <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES
      Net income                                                               $  2,899,919         $     51,972
      Adjustments to reconcile net income to net cash used by operating
      activities
         Depreciation and amortization of drydock costs                           3,987,397                   --
         Amortization of intangible assets                                        1,329,372                   --
         Interest accrued but not paid                                               94,453                   --
         Deferred income taxes                                                    1,896,001                   --
      Changes in assets and liabilities, net of amounts acquired:
         Accounts receivable                                                    (11,658,199)                  --
         Interest accrued on treasury bill                                               --             (572,049)
         Prepaid expenses and other current assets                                 (220,453)              21,852
         Accounts payable and accrued liabilities                                 1,271,488               30,178
         Income taxes                                                              (257,582)              44,166
         Deferred interest                                                               --              113,488
         Drydock expenditures                                                       (25,107)                  --

----------------------------------------------------------------------------------------------------------------
                                                                                   (682,711)            (310,393)
----------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES
      Purchase of property and equipment                                        (19,760,592)                  --
      Blocked account                                                            (2,700,000)                  --
      Deferred acquisition and transaction costs                                 (1,067,200)            (239,632)

----------------------------------------------------------------------------------------------------------------
                                                                                (23,527,792)            (239,632)
----------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
      Capital lease repayment                                                       (30,520)                  --
      Proceeds from long term debt - senior                                      14,500,000                   --
      Proceeds from long term debt - subordinated                                 2,200,000                   --
      Senior debt repayment                                                      (1,137,111)                  --
      Proceeds from share issuance - net                                         12,950,000                   --
      Dividends paid                                                               (684,580)                  --
      Warrants exercised                                                             19,100                   --
      Proceeds from bank indebtedness                                             3,612,315                   --

----------------------------------------------------------------------------------------------------------------
                                                                                 31,429,204                   --
----------------------------------------------------------------------------------------------------------------

EFFECT OF FOREIGN EXCHANGE RATES ON CASH                                           (465,604)                  --

MINORITY INTEREST                                                                    40,058                   --
================================================================================================================

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                              6,793,155             (550,025)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                    2,574,325              726,970
================================================================================================================

CASH AND CASH EQUIVALENTS, END OF PERIOD                                       $  9,367,480         $    176,945
================================================================================================================
</TABLE>

            See accompanying notes to unaudited financial statements


                                       5
<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 December 31, 2006 and for the periods
ended December 31, 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 Ltd. and
Wisconsin & Michigan Steamship Company ("WMS"), a variable interest entity as
discussed in Note 24. 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
December 31, 2006 and 2005 and the results of operations for the three months
ended December 31, 2006 and 2005 and the nine months ended December 31, 2006 and
2005, its cash flows for the nine months ended December 31, 2006 and 2005, its
stockholders' equity for the nine months ended December 31, 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 intercompany 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.


                                       6
<PAGE>

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

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.

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.


                                       7
<PAGE>

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

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, including at the Company's fiscal year end using a
two-step impairment test to first identify potential impairment and then to
measure the amount of the impairment, if any. In 2006, these tests indicated
that goodwill was not impaired.

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

Property and equipment

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

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

Deferred charges

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

Impairment of long-lived assets

Long-lived assets include property, intangible assets subject to amortization,
and certain other assets. The carrying values of these assets are periodically
reviewed for impairment or whenever events or changes in circumstances indicate
that the carrying amounts may not be recoverable. 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.


                                       8
<PAGE>

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

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.


                                       9
<PAGE>

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

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 December 31, 2006 and currently has no such securities
outstanding. The adoption of FAS 123R did not have a material effect on the
Company (see note 21).

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
24).

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 June 2006, FASB ratified the consensus reached by the Emerging Issues Task
Force in Issue No. 06-3, "How Taxes Collected from Customers and Remitted to
Governmental Authorities Should be Presented in the Income Statement (That is,
Gross Versus Net Presentation)." Issue No. 06-3 requires disclosure of an
entity's accounting policy regarding the presentation of taxes assessed by a
governmental authority that are directly imposed on a revenue-producing
transaction between a seller and a customer, including sales, use, value added
and some excise taxes. The adoption of Issue No. 06-3, which is effective for
interim and annual reporting periods beginning after December 15, 2006, did not
have an impact on the Corporation's consolidated financial statements.


                                       10
<PAGE>

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

In September 2006, the SEC staff issued Staff Accounting Bulletin No. 108,
"Considering the Effects of Prior Year Misstatements when Quantifying
Misstatements in Current Year Financial Statements" (SAB 108). SAB 108 was
issued to provide consistency between how registrants quantify financial
statement misstatements. Historically, there have been two widely-used methods
for quantifying the effects of financial statement misstatements. These methods
are referred to as the "roll-over" and "iron curtain" method. The roll-over
method quantifies the amount by which the current year income statement is
misstated. Exclusive reliance on an income statement approach can result in the
accumulation of errors on the balance sheet that may not have been material to
any individual income statement, but which may misstate one or more balance
sheet accounts. The iron curtain method quantifies the error as the cumulative
amount by which the current year balance sheet is misstated. Exclusive reliance
on a balance sheet approach can result in disregarding the effects of errors in
the current year income statement that results from the correction of an error
existing in previously issued financial statements. The Corporation currently
uses the roll-over method for quantifying identified financial statement
misstatements. SAB 108 established an approach that requires quantification of
financial statement misstatements based on the effects of the misstatement on
each of the company's financial statements and the related financial statement
disclosures. This approach is commonly referred to as the "dual approach"
because it requires quantification of errors under both the roll-over and iron
curtain methods. SAB 108 allows registrants to initially apply the dual approach
either by (1) retroactively adjusting prior financial statements as if the dual
approach had always been used or by (2) recording the cumulative effect of
initially applying the dual approach as adjustments to the carrying values of
assets and liabilities as of April 1, 2006 with an offsetting adjustment
recorded to the opening balance of retained earnings. Use of this "cumulative
effect" transition method requires detailed disclosure of the nature and amount
of each individual error being corrected through the cumulative adjustment and
how and when it arose. The Corporation will initially apply SAB 108 using the
retroactive method in connection with the preparation of its annual financial
statements for the year ending March 31, 2007. The adoption of SAB 108 will not
result in any adjustment to the Corporation's 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.

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.


                                       11
<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:

                                          December 31, 2006       March 31, 2006
                                          -----------------       --------------
Prepaid insurance                           $     121,364         $     540,699
Fuel and lubricants                             1,229,880               787,461
Deposits and other prepaids                       329,476               132,107
-------------------------------------------------------------------------------
                                            $   1,680,720         $   1,460,267
===============================================================================

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 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:

                                              December 31, 2006   March 31, 2006
                                              -----------------   --------------
Cost
     Vessels                                    $  59,198,709      $  39,643,272
     Vessel under capital lease (Note 12)           7,418,536          7,377,827
     Leasehold improvements                         1,396,518          1,387,539
     Furniture and equipment                          115,171             47,712
     Computer equipment                               160,548              9,979

--------------------------------------------------------------------------------
                                                $  68,289,482      $  48,466,329
================================================================================

Accumulated depreciation
     Vessels                                    $   3,339,600      $     253,303
     Vessel under capital lease (Note 12)             508,210             44,551
     Leasehold improvements                            95,344              7,638
     Furniture and equipment                           17,095                 --
     Computer equipment                                39,163                 --
--------------------------------------------------------------------------------

                                                $   3,999,412      $     305,492
--------------------------------------------------------------------------------

                                                $  64,290,070      $  48,160,837
================================================================================


                                       12
<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:

                                          December 31, 2006       March 31, 2006
                                          -----------------       --------------

Drydock expenditures                        $   2,071,635          $   1,614,173
Accumulated amortization                          242,666                     --
--------------------------------------------------------------------------------
                                            $   1,828,969          $   1,614,173
================================================================================

8. GOODWILL AND INTANGIBLE ASSETS

Intangibles are comprised of the following:

<TABLE>
<CAPTION>
                                                 December 31, 2006     March 31, 2006
                                                 -----------------     --------------
<S>                                                <C>                  <C>
Goodwill                                           $   6,362,952        $   6,362,952
Intangible assets
     Deferred financing costs                      $   1,168,138        $     572,397
     Chartering agreement costs                          473,243                   --
     Trademarks, trade names                             916,386              914,968
     Non-competition agreements                        2,100,328            2,097,082
     Customer relationships and contracts             10,494,847           10,478,625

-------------------------------------------------------------------------------------
     Total identifiable intangibles                $  15,152,942        $  14,063,072
=====================================================================================

Accumulated amortization
     Deferred financing costs                      $     180,679        $          --
     Chartering agreement costs                           89,738                   --
     Trademarks, trade names                              75,778                7,083
     Non-competition agreements                          482,447               45,094
     Customer relationships and contracts                592,981               68,566
-------------------------------------------------------------------------------------
                                                       1,421,623              120,743
-------------------------------------------------------------------------------------

Total intangible assets                            $  13,731,319        $  13,942,329
=====================================================================================
</TABLE>


                                       13
<PAGE>

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

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

2007                                                                $  1,740,073
2008                                                                   1,740,073
2009                                                                   1,337,487
2010                                                                     915,088
2011                                                                     829,094
--------------------------------------------------------------------------------
                                                                    $  6,561,815
================================================================================

9. BANK INDEBTEDNESS

At December 31, 2006, the Company was provided 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 $3,612,315 as at
December 31, 2006 (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 December 31, 2006 was
10.25% on the U.S. revolver and 8.00% 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:

                                           December 31, 2006      March 31, 2006
                                           -----------------      --------------

Transaction costs                            $          --         $     779,966
Payroll                                          2,156,073               850,342
Legal and professional fees                        576,950               624,658
Interest                                            84,336               150,021
Preferred stock dividends                          290,625                90,417
Other                                              113,127               119,755
--------------------------------------------------------------------------------

                                             $   3,221,111         $   2,615,159
================================================================================


                                       14
<PAGE>

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

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 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.


                                       15
<PAGE>

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

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 December 31, 2006 were 7.26% on
the Canadian term loan and 8.32% on the U.S. term loan.


                                       16
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                  December 31, 2006    March 31, 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.                                                         $ 17,281,620       $ 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.                                                                       3,800,012          4,000,000

c)   VIE's  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.                                                             2,294,453                 --

d)   VIE's  senior note  bearing  interest  at a rate of 9.06%.  The
     note is repayable in payable 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                 --
--------------------------------------------------------------------------------------------------------------------
                                                                                     $ 37,876,085       $ 22,150,685
--------------------------------------------------------------------------------------------------------------------
     Less amounts due within 12 months                                                  4,112,941          1,772,055
--------------------------------------------------------------------------------------------------------------------
                                                                                     $ 33,763,144       $ 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 December 31, 2006.


                                       17
<PAGE>

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

Principal payments are due as follows:

2007                                                               $   4,112,941
2008                                                                  15,712,941
2009                                                                   4,957,394
2010                                                                   2,662,941
2011                                                                  10,429,868
--------------------------------------------------------------------------------
                                                                   $  37,876,085
================================================================================

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 December 31, 2006 and assuming that the
repurchase outlined in Note 13 is not completed and the vessel remains on
charter hire:

2008                                                                $    350,000
2009                                                                     350,000
2010                                                                     350,000
2011                                                                     500,000
2012                                                                     500,000
Thereafter                                                             4,150,000

--------------------------------------------------------------------------------
Total minimum payments                                              $  6,200,000

Less: Amount representing imputed interest (at 17.2%)                  4,122,388
--------------------------------------------------------------------------------

Present value of net minimum payments (see note (a) below)          $  2,077,612
================================================================================

(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 December 31, 2006 was
$2,077,612.


                                       18
<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%.

         2008                                                        $   675,000
         2009                                                            675,000
         2010                                                            675,000
         2011                                                            675,000
         2012                                                            675,000
Thereafter                                                             4,050,000
================================================================================
                                                                     $ 7,425,000
================================================================================

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 $250,000 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.


                                       19
<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.


                                       20
<PAGE>

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

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 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


                                       21
<PAGE>

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

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 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.

During the three month period ending December 31, 2006 3,820 warrants were
converted to shares at a rate of $5 for total gross proceeds of $19,100.


                                       22
<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       Nine months      Nine months
                                        ended           ended              ended            ended
                                    December 31,     December 31,       December 31,     December 31,
                                        2006             2005               2006             2005
-----------------------------------------------------------------------------------------------------
<S>                                 <C>              <C>                <C>              <C>
Bank indebtedness                   $    117,647     $         --       $    318,457     $         --
Long term debt - senior                  743,056               --          1,909,814               --
Long term debt - subordinated             57,175               --             94,453               --
Capital lease                            106,493               --            313,886               --
-----------------------------------------------------------------------------------------------------
                                    $  1,024,371     $         --       $  2,636,610     $         --
=====================================================================================================
</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      Three months          Nine months       Nine months
                              ended             ended                 ended             ended
                           December 31,      December 31,          December 31,      December 31,
                               2006              2005                  2006              2005
-------------------------------------------------------------------------------------------------
<S>                       <C>               <C>                   <C>
Revenues by country
    Canada                $  10,937,049     $          --         $  37,562,056                --
    United States            15,167,085                --            38,174,997                --
-------------------------------------------------------------------------------------------------
                          $  26,104,134     $          --         $  75,737,053     $          --
=================================================================================================
</TABLE>

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

                                          December 31, 2006       March 31, 2006
-------------------------------------------------------------------------------

Property and equipment by country
    Canada                                   $ 29,549,416          $ 30,416,419
    United States                              34,740,654            17,744,418
-------------------------------------------------------------------------------
                                             $ 64,290,070          $ 48,160,837
===============================================================================

Total assets by country
    Canada                                   $ 57,298,501          $ 58,033,856
    United States                              64,933,543            28,734,980
-------------------------------------------------------------------------------
                                             $122,232,044          $ 86,768,836


                                       23
<PAGE>

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

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.

20. EARNINGS PER SHARE

The company had a total of 8,006,777 shares issued and outstanding, out of an
authorized total of 50,000,000 shares. The fully diluted calculation utilizes a
total of 12,466,881 and 10,830,400 shares for the three and nine month periods
ending December 31, 2006, based on the following additional share calculation.
Warrants issued from the initial prospectus and overallotment have a dilutive
effect of 2,043,772 based on the average quarterly share price as of December
31, 2006 of $6.43, and 1,473,860 based on the nine month average share price as
of December 31, 2006 of $5.95. 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


                                       24
<PAGE>

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

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.

The Company calculates EPS based on the treasury method for outstanding warrants
and on the if-converted method for the outstanding convertible preferred shares.

<TABLE>
<CAPTION>
                                                           Three months        Three months        Nine months         Nine months
                                                              ended               ended               ended               ended
                                                           December 31,        December 31,        December 31,        December 31,
                                                               2006                2005                2006                2005
                                                           ------------        ------------        ------------        ------------
<S>                                                        <C>                 <C>                 <C>                 <C>
Numerator:

Net income (loss)                                          $    333,658        ($    14,589)       $  3,674,765        $     51,972

      Preferred stock dividends                                (294,370)                 --            (884,788)                 --
      Dividends paid by VIE                                    (250,000)                 --            (250,000)                 --
      Minority interest                                         442,481                  --             359,942                  --
-----------------------------------------------------------------------------------------------------------------------------------
Income available to common shareholders                    $    231,769        ($    14,589)       $  2,899,919        $     51,972
===================================================================================================================================
Denominator::

Weighted average common shares for basic EPS                  8,003,754           5,600,000           6,937,185           5,600,000
===================================================================================================================================
Effect of dilutive securities:

Total outstanding warrants                                    9,196,180           9,200,000           9,196,980           9,200,000

Exercise price                                                     5.00                5.00                5.00                5.00

Average share price during period                                  6.43                5.64                5.95                5.38
===================================================================================================================================
      Weighted average dilutive effect of warrants            2,043,772                  --           1,473,860                  --
         using treasury method
===================================================================================================================================
      Weighted average convertible preferred shares
         at $6.20 utilizing if converted method               2,419,355                  --           2,419,355                  --
===================================================================================================================================
      Weighted average common shares for diluted EPS         12,466,881           5,600,000          10,830,400           5,600,000
===================================================================================================================================
Basic EPS                                                  $       0.03        $       0.00        $       0.42        $       0.01
Diluted EPS                                                $       0.03        $       0.00        $       0.35        $       0.01
===================================================================================================================================
</TABLE>


                                       25
<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.


                                       26
<PAGE>

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

22. EXECUTIVE COMPENSATION AWARDS

On October 18, 2006, the Company (or its subsidiary, in the case of employees of
a subsidiary) awarded certain cash compensation to certain directors, officers
and employees of the Company and its subsidiaries who were intended to receive
warrants under an initially conceived, but abandoned, Warrant Compensation
Program. The recipients are required to seek to acquire with not less than the
after-tax proceeds of such awards, 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.

23. 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.


                                       27
<PAGE>

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

<TABLE>
<CAPTION>
                                                                       Pro Forma                        Pro Forma
                                                      Three Months    Three months    Nine months      Nine months        Year
                                                         Ended           ended           ended            ended           ended
                                                      December 31,    December 31,    December 31,     December 31,    December 31,
Selected statement of operations data                     2006            2005            2006             2005            2005
                                                      ------------    ------------    ------------     ------------    ------------
<S>                                                   <C>             <C>             <C>              <C>             <C>
Revenue - Company operated vessels                    $ 24,766,926    $ 16,351,174    $ 70,726,155     $ 49,673,433    $ 53,819,958
Revenue - Outside voyage charter revenue                 1,337,208       1,523,481       5,010,898        4,571,465       7,420,577
-----------------------------------------------------------------------------------------------------------------------------------
                                                        26,104,134      17,874,655      75,737,053       54,244,898    $ 61,240,535
Expenses
  Outside voyage charter fees                            1,309,961       1,472,946       4,935,002        4,478,259       7,379,638
  Vessel operating expenses                             19,818,927      13,329,233      52,304,556       37,006,508      40,628,366
  Non operational repairs and maintenance                   40,314          15,543          97,062          104,172       1,625,671
-----------------------------------------------------------------------------------------------------------------------------------
                                                        21,169,202      14,817,722      57,336,620       41,588,939      49,633,675
-----------------------------------------------------------------------------------------------------------------------------------
Income before general and administrative,                4,934,932       3,056,933      18,400,433       12,655,959      11,606,860
depreciation, amortization of drydock costs and
intangibles, other income and expenses and
income taxes
-----------------------------------------------------------------------------------------------------------------------------------
  General and administrative                             1,954,780         933,464       4,913,783        2,397,210       3,276,188
  Depreciation and amortization of drydock costs
  and intangibles                                        1,839,472       1,294,823       5,078,348        3,822,428       4,972,759
  Loss on asset disposal                                        --              --              --               --         113,405
  Loss (gain) on foreign exchange                           88,680          21,235         177,958           49,274        (276,251)
-----------------------------------------------------------------------------------------------------------------------------------
                                                         3,882,932       2,249,522      10,170,089        6,268,912       8,086,101
-----------------------------------------------------------------------------------------------------------------------------------
Income before interest, other income and
expenses and income taxes                                1,052,000         807,411       8,230,344        6,387,047       3,520,759
-----------------------------------------------------------------------------------------------------------------------------------

Net income                                                 333,658         149,351       3,674,765        2,968,712         455,200
===================================================================================================================================
Net income (loss) per share - basic                   $       0.03    ($      0.07)   $       0.42     $       0.37    ($      0.13)
Net income (loss) per share - diluted                 $       0.03    ($      0.07)   $       0.35     $       0.34    ($      0.13)
</TABLE>


                                       28
<PAGE>

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

24. 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 entered into a Time
Charter Agreement (the "Time Charter Agreement") with WMS, an unaffiliated third
party. Under the Time Charter Agreement, WMS makes three United States flag
vessels owned by WMS, the DAVID Z. NORTON, the EARL W. OGLEBAY and the WOLVERINE
available exclusively to Lower Lakes Transportation for Lower Lakes
Transportation'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 Lower Lakes Transportation has the option to extend the
charter period through December 31, 2013. The Time Charter Agreement also
provides Lower Lakes Transportation 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., each executed separate guaranties in favor of WMS with respect
to separate financial obligations of Lower Lakes Transportation under the Time
Charter Agreement. At the present time the Company has no intention of
exercising its purchase option under the Time Charter Agreement.

The impact on the balance sheet and income statement for the period ending
December 31, 2006 is shown below.


                                       29
<PAGE>

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

<TABLE>
<CAPTION>
                                                                    Rand Logistics Inc.    Impact of FIN        Consolidated
                                                                     December 31, 2006    46R presentation   December 31, 2006
                                                                     -----------------    ----------------   -----------------
<S>                                                                   <C>                  <C>                <C>
ASSETS
CURRENT

         Cash and cash equivalents                                    $   7,806,181        $  1,561,299       $   9,367,480
         Accounts receivable (Note 3)                                    13,709,530              55,951          13,765,481
         Prepaid expenses and other current assets (Note 4)               1,855,158            (174,438)          1,680,720
         Income tax receivable                                              237,795                  --             237,795
         Deferred income taxes                                            1,132,253              54,770           1,187,023
---------------------------------------------------------------------------------------------------------------------------
 Total current assets                                                    24,740,917           1,497,582          26,238,499

BLOCKED ACCOUNT (Note 5)                                                  2,700,000                  --           2,700,000
PROPERTY AND EQUIPMENT, NET (Note 6)                                     46,082,751          18,207,319          64,290,070
DUE FROM RELATED COMPANY                                                   (130,843)            130,843                  --
DEFERRED INCOME TAXES                                                     6,894,259             185,976           7,080,235
DEFERRED DRYDOCK COSTS, NET (Note 7)                                      1,828,969                  --           1,828,969
INTANGIBLE ASSETS, NET (Note 8)                                          13,276,832             454,487          13,731,319
NOTE RECEIVABLE W&M                                                       2,242,306          (2,242,306)                 --
GOODWILL (Note 8)                                                         6,362,952                  --           6,362,952
---------------------------------------------------------------------------------------------------------------------------
 Total assets                                                         $ 103,998,143        $ 18,233,901       $ 122,232,044
===========================================================================================================================

LIABILITIES
CURRENT
         Bank indebtedness (Note 9)                                   $   3,612,315        $         --       $   3,612,315
         Accounts payable                                                 7,232,651             366,204           7,598,855
         Accrued liabilities (Note 10)                                    2,285,945             935,166           3,221,111

         Income taxes payable                                                    --              31,000              31,000
         Deferred income taxes                                              530,934                  --             530,934
         Current portion of long-term debt  (Note 11)                     2,662,941           1,450,000           4,112,941
         Current portion of long-term capital lease obligation -
         vessel lease (Note 12)                                           2,077,612                  --           2,077,612
===========================================================================================================================
Total current liabilities                                                18,402,398           2,782,370          21,184,768
LONG-TERM DEBT  (Note 11)                                                18,418,691          15,344,453          33,763,144
ACQUIRED MANAGEMENT BONUS PROGRAM (Note 21)                               3,000,000                  --           3,000,000
DEFERRED INCOME TAXES                                                    11,526,147              28,452          11,554,599
===========================================================================================================================
 Total liabilities                                                       51,347,236          18,155,275          69,502,511

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                                             801                  --                 801
     Additional Paid-in Capital                                          37,598,150                  --          37,598,150
     Accumulated surplus (deficit)                                        1,435,284              38,568           1,473,852
     Minority Interest Variable Interest Entity                                  --              40,058              40,058
     Accumulated other comprehensive loss                                (1,283,328)                             (1,283,328)
===========================================================================================================================
Total stockholders' equity                                               52,650,907              78,626          52,729,533
===========================================================================================================================
  Total liabilities and stockholders' equity                          $ 103,998,143        $ 18,233,901       $ 122,232,044
===========================================================================================================================
</TABLE>


                                       30
<PAGE>

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

24. MINORITY INTEREST (continued)

<TABLE>
<CAPTION>
                                                               Rand Logistics                        Consolidated
                                                                Three Months       Consolidated      Three months
                                                                    Ended          Three months          ended
                                                                  December       Ended Impact of       December
                                                                  31, 2006           Fin 46R           31, 2006
                                                               --------------    ---------------     ------------
<S>                                                            <C>                <C>                <C>
REVENUE                                                        $ 26,104,134       $         --       $ 26,104,134
EXPENSES

      Outside voyage charter fees (Note 16)                       1,309,961                 --          1,309,961
      Charter Hire                                                4,006,095         (4,006,095)                --
      Vessel operating expenses                                  16,291,557          3,527,370         19,818,927
      Repairs and maintenance                                        40,314                 --             40,314
      General and administrative                                  1,805,379            149,401          1,954,780
      Depreciation                                                1,093,335            314,250          1,407,585
      Amortization of drydock costs                                  82,741                 --             82,741
      Amortization of intangibles                                   424,146            (75,000)           349,146
      Loss on foreign exchange                                       88,680                 --             88,680
------------------------------------------------------------------------------------------------------------------------

                                                                 25,142,208            (90,074)        25,052,134
INCOME (LOSS) BEFORE OTHER INCOME AND EXPENSES AND
INCOME TAXES                                                        961,926             90,074          1,052,000

OTHER INCOME AND EXPENSES
Interest expense (Note 17)                                          631,472            392,899          1,024,371
Interest income                                                    (227,470)            92,306           (135,164)
Amortization of deferred financing costs                             82,970             59,075            142,045
------------------------------------------------------------------------------------------------------------------------
                                                                    486,972            544,280          1,031,252

INCOME BEFORE INCOME TAXES                                          474,954           (454,206)            20,748

PROVISION (RECOVERY) FOR INCOME TAXES

Current                                                                  --            (68,000)           (68,000)

Deferred                                                            (12,616)          (232,294)          (244,910)
------------------------------------------------------------------------------------------------------------------------
NET INCOME                                                     $    487,570       $   (153,912)      $    333,658

MINORITY INTEREST                                                        --            442,481            442,481
COMMON STOCK DIVIDENDS                                                   --           (250,000)          (250,000)
PREFERRED STOCK DIVIDENDS                                          (294,370)                --           (294,370)
NET INCOME APPLICABLE TO COMMON STOCKHOLDERS                        193,200             38,569            231,769
========================================================================================================================

Net earnings per share basic (Note 20)                         $       0.02                          $       0.03
Net earnings per share diluted                                         0.02                                  0.03
Weighted average shares - Basic                                   8,003,754                             8,003,754
Weighted average shares - Diluted                                12,466,881                            12,466,881

<CAPTION>
                                                               Rand Logistics                         Consolidated
                                                                 Nine months       Consolidated       Nine months
                                                                    ended           Nine months          ended
                                                                  December        Ended Impact of       December
                                                                  31, 2006            Fin 46R           31, 2006
                                                               --------------     ---------------     ------------
<S>                                                            <C>                <C>                <C>
REVENUE                                                        $ 75,737,053       $         --       $ 75,737,053
EXPENSES

      Outside voyage charter fees (Note 16)                       4,935,002                 --          4,935,002
      Charter Hire                                                7,090,721         (7,090,721)                --
      Vessel operating expenses                                  46,528,012          5,776,544         52,304,556
      Repairs and maintenance                                        97,062                 --             97,062
      General and administrative                                  4,663,547            250,236          4,913,783
      Depreciation                                                3,212,875            523,716          3,736,591
      Amortization of drydock costs                                 250,806                 --            250,806
      Amortization of intangibles                                 1,215,951           (125,000)         1,090,951
      Loss on foreign exchange                                      177,958                 --            177,958
-----------------------------------------------------------------------------------------------------------------

                                                                 68,171,934           (665,225)        67,506,709
INCOME (LOSS) BEFORE OTHER INCOME AND EXPENSES AND
INCOME TAXES                                                      7,565,119            665,225          8,230,344

OTHER INCOME AND EXPENSES
Interest expense (Note 17)                                        1,994,009            642,601          2,636,610
Interest income                                                    (315,549)            92,306           (223,243)
Amortization of deferred financing costs                            141,867             96,554            238,421
-----------------------------------------------------------------------------------------------------------------
                                                                  1,820,327            831,461          2,651,788

INCOME BEFORE INCOME TAXES                                        5,744,792           (166,236)         5,578,556

PROVISION (RECOVERY) FOR INCOME TAXES

Current                                                             (88,000)            31,000            (57,000)

Deferred                                                          2,173,085           (212,294)         1,960,791
-----------------------------------------------------------------------------------------------------------------
NET INCOME                                                     $  3,659,707       $     15,058       $  3,674,765

MINORITY INTEREST                                                        --            359,942            359,942
COMMON STOCK DIVIDENDS                                                   --           (250,000)          (250,000)
PREFERRED STOCK DIVIDENDS                                          (884,788)                --           (884,788)
NET INCOME APPLICABLE TO COMMON STOCKHOLDERS                      2,774,919            125,000          2,899,919
=================================================================================================================

Net earnings per share basic (Note 20)                         $       0.40                          $       0.42
Net earnings per share diluted                                         0.34                                  0.35
Weighted average shares - Basic                                   6,937,185                             6,937,185
Weighted average shares - Diluted                                10,830,400                            10,830,400
</TABLE>


                                       31
<PAGE>

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

25. SUBSEQUENT EVENTS

On January 17, 2007, the Company awarded 215,000 shares of its common stock, par
value $.0001 per share, to two key executives. The shares of common stock
awarded (the "Restricted Shares") were not registered under the Securities Act
of 1933 and constitute "restricted securities" within the meaning of the Act.
The Restricted Shares were awarded pursuant to Restricted Share Award Agreements
(the "Award Agreements"), dated January 17, 2007.

Pursuant to the Award Agreements: 44% of the Restricted Shares vested on the
date of the award; 6% of the Restricted Shares will vest on March 31, 2007; 25%
of the Restricted Shares will vest on March 31, 2008; and 25% of the Restricted
Shares will vest on March 31, 2009. However, in order to facilitate the
Company's federal and state tax withholding obligations in respect of the
Restricted Stock awards, the Restricted Shares which vested on the date of the
award were withheld by the Company.

If the recipient's employment with the Company is terminated for "cause" as
defined in the Award Agreements, or the recipient terminates his employment with
the Company without "good reason" as defined in the Award Agreements, any
Restricted Shares not vested prior to the date of any such termination shall
immediately be canceled, with any rights or interests in and with respect to
such Restricted Shares forfeited. The Company may, at its sole discretion,
determine, prior to or within ninety days after the date of any such
termination, that all or a portion of such unvested Restricted Shares shall not
be so canceled and forfeited.

If the recipient's employment with the Company is terminated by the Company
without cause, by the recipient for good reason, or as a result of death or
permanent disability, 100% of the Restricted Shares awarded pursuant to the
applicable Award Agreement shall become fully vested as of the date of such
termination.

In the event of a "change of control" of the Company as defined in the Award
Agreements, all restrictions, terms and conditions applicable to the Restricted
Shares shall be deemed lapsed and satisfied as of the date of such change of
control.

On February 8, 2007, the company gave notice of its intent to purchase the M/V
Manistee, pursuant to a purchase, sale and leaseback agreement for a total of
$2.2 million. The company expects to finance the purchase entirely through debt
and expects the transaction to close before March 31, 2007.


                                       32
<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.

      The following presentation should be read in conjunction with the
financial statements and notes thereto included in, or referred to, in this
report.

      Background

      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.

      Lower Lakes Acquisition

      On March 3, 2006, Rand, through a series of transactions, acquired all of
the outstanding shares of capital stock of Lower Lakes Towing Ltd. and Grand
River Navigation Company, Inc. As a result of such transactions each of Lower
Lakes, Grand River and Lower Lakes Transportation Company, formerly a subsidiary
of Lower Lakes, became indirect, wholly-owned subsidiaries of Rand. Rand paid
US$10,593,748 to the sellers of Lower Lakes and Grand River (which amount was
subject to a post-closing adjustment) and arranged for the repayment of
indebtedness of such entities of Cdn$43,732,749 and US$5,156,945, respectively.
In conjunction with the foregoing transactions, as of March 3, 2006, Rand
changed its name to Rand Logistics, Inc. and changed its fiscal year to March
31.

      Rand funded the acquisition with the approximately US$24,646,000 of
proceeds of its initial public offering, US$15,000,000 of proceeds of the
acquisition closing date private placement of Rand's newly created series A
convertible preferred stock, and proceeds of a 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: 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

<PAGE>

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; have a separate vote over
certain material transactions or changes involving Rand; and are entitled to
certain registration rights.

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

      On August 1, 2006, the credit facility was amended to increase 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.

      WMS Time Charter and Related Transactions

      On August 1, 2006, Lower Lakes Transportation, an indirect wholly-owned
subsidiary of Rand, entered into a Time Charter Agreement with Wisconsin &
Michigan Steamship Company ("WMS"), an unaffiliated third party. Under the Time
Charter Agreement, WMS makes three United States flag vessels owned by WMS, the
DAVID Z. NORTON, the EARL W. OGLEBAY and the WOLVERINE, available exclusively to
Lower Lakes Transportation for Lower Lakes Transportation'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 Lower Lakes
Transportation has the option to extend the charter period through December 31,
2013. The Time Charter Agreement also provides Lower Lakes Transportation 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., each executed separate
guarantees in favor of WMS with respect to separate financial obligations of
Lower Lakes Transportation under the Time Charter Agreement. The Company does
not presently intend to exercise its purchase option for the vessels under the
Time Charter Agreement.

      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 its senior lender 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.

      In conjunction with the above transactions, Rand issued to a group of
accredited investors in a private transaction 2,402,957 shares of its common
stock for $5.41 per share, or an aggregate purchase price of approximately
$13,000,000. The holders of such shares are entitled to certain registration
rights with respect to such shares.

      Plan of Operation

      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, Lower Lakes Transportation, Grand River and their respective

<PAGE>

subsidiaries, the business of which is sometimes referred to herein as the
business of 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' operating fleet currently consists of four self-unloading
bulk carriers in Canada and three self-unloading bulk carriers as well as a tug
and a self-unloading barge in the U.S. Lower Lakes owns three of the Canadian
flagged vessels and its wholly-owned subsidiary, Port Dover Steamship Company
Inc., owns the fourth. Lower Lakes Transportation time charters the U.S. flagged
vessels from Grand River and three self-unloading bulk carriers from WMS. Grand
River owns two of the U.S. flagged vessels and a tug, and bareboat charters a
U.S. flagged vessel (the M/V Manistee) and a barge. Grand River has the option
to purchase the Manistee for US$2,200,000. On February 8, 2007, the Company gave
notice of its intent to purchase the M/V Manistee. The Company expects to
finance the purchase entirely through debt and expects the transaction to close
before March 31, 2007.

      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 $600,000 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 $750,000. 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 will be sufficient to satisfy 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.

      Rand does not have any specific current plans to increase or decrease the
number of its employees or, except as set forth above, 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.

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

      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 materially 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,
performed as a bi-product of the Company's financial statement audit.

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

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

      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.

      To address the material weakness and significant deficiencies, the Company
has engaged an independent third party consulting firm, Control Solutions
International ("CSI"), to assist management in the documentation of internal
controls and processes and to prepare the Company for the eventual requirements
of obtaining auditor opinions on the certification of internal control. The
Company has hired a Financial Analyst in October 2006 and commenced a conversion
of the accounting system in the quarter. CSI is also assisting with the
documentation and segregation of duties policies in conjunction with the systems
conversion, and the development of a written disaster recovery plan.

<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>

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)

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)

<PAGE>

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)

10.34          Restricted Share Award Agreement with Laurence Levy, dated
               January 17, 2007(13)

10.35          Restricted Share Award Agreement with Edward Levy, dated January
               17, 2007(13)

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.

(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.

<PAGE>

(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.

(13)  Incorporated by reference to the Registrant's Current Report on Form 8-K,
      filed with the Securities and Exchange Commission on January 18, 2007.

<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: February 8, 2007                              /s/ Laurence S. Levy
      -----------------                             ----------------------------
                                                    Laurence S. Levy
                                                    Chief Executive Officer


Date: February 8, 2007                              /s/ Joseph W. McHugh, Jr.
      -----------------                             ----------------------------
                                                    Joseph W. McHugh, Jr.
                                                    Chief Financial Officer

<PAGE>

                                  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)

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)

<PAGE>

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)

10.34          Restricted Share Award Agreement with Laurence Levy, dated
               January 17, 2007(13)

10.35          Restricted Share Award Agreement with Edward Levy, dated January
               17, 2007(13)

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.

(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.

<PAGE>

(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.

(13)  Incorporated by reference to the Registrant's Current Report on Form 8-K,
      filed with the Securities and Exchange Commission on January 18, 2007.