U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-KSB

(Mark One)

[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934
For the fiscal year ended December 31, 2007

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934

For the transition period from ______________ to________________

Commission file number 000-52301

                         LAST MILE LOGISTICS GROUP, INC.
                 (Name of small business issuer in its charter)

         Florida                                                 65-1001573
         -------                                                 ----------
State of other jurisdiction                                   (I.R.S. Employer
of incorporation or organization)                            Identification No.)

6675 Amberton Drive, Elkridge, Maryland                            21075
---------------------------------------                            -----
(Address of principal executive offices)                         (Zip Code)

Registrant's telephone number, including area code: (301) 931-1771

       Securities registered under Section 12(b) of the Exchange Act: None

         Securities registered under Section 12(g) of the Exchange Act:
                    Common Stock, par value $.0001 per share
                    ----------------------------------------

Check whether the issuer is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act. [ ]

Note - Checking the box above will not relieve any registrant required to file
reports pursuant to Section 13 or 15(d) of the Exchange Act from their
obligations under those Sections.

         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 [ ]


<PAGE>

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

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

         The Registrant's revenues for its most recent fiscal year are:
$1,941,627.

         The aggregate market value of the voting and non-voting common equity
held by non-affiliates computed by reference to the last bid and ask price was
approximately $804,320.

         The Registrant had 50,352,667 shares of common stock outstanding as of
March 31, 2008.

                      DOCUMENTS INCORPORATED BY REFERENCE

                                      None

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]

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                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS.

FORWARD LOOKING STATEMENTS

In addition to the historical information contained herein, we make
statements in this report that are forward-looking statements. Sometimes these
statements will contain words such as "believes," "anticipates," "expects,"
"intends," "hopes," "should," "will," "plans," and other similar words. These
statements are not guarantees of our future performance and are subject to
risks, uncertainties, and other important factors, certain of which are
discussed herein under the heading "Factors That May Affect Future Operating
Results," that could cause our actual performance or achievements to be
materially different from those expressed in any forward-looking statements made
by or on our behalf. Given these uncertainties, undue reliance should not be
placed on these forward-looking statements. We do not assume the obligation to
update or revise any forward-looking statements.

HISTORY

         Our company, Last Mile Logistics Group, Inc., is a Florida corporation
which was formed in 1998. It did not commence business operations until it
acquired Chesapeake Logistics, LLC, a Maryland limited liability company
("Chesapeake Logistics"), as of October 1, 2006.

         Chesapeake Logistics provides courier services of envelopes and small
packages, as well as "last mile" logistics services in the mid-Atlantic region
of the United States from its facility located in Elkridge, Maryland. Its "last
mile" logistics services include scheduled door-to-door delivery of larger items
of merchandise, such as furniture, electronics and entertainment equipment, as
well as the assembly and installation of such items.

         Chesapeake Logistics was founded as a limited liability company in
Arnold, Maryland in November 1997. Initially, it was a consulting firm focused
on improving its clients' supply chain and logistics strategies and practices.
In September 2000, Chesapeake Logistics acquired the assets and business of
Boyle Enterprises, Inc. d/b/a U.S. Couriers, a provider of same-day and
scheduled courier services in the Washington, DC area.

         While continuing to provide courier services, Chesapeake Logistics has,
over time, changed its focus to include the delivery of heavier freight and
specialized support services, such as home delivery and assembly and
installation of merchandise. This transition from business-to-business
deliveries of envelopes and small packages to business-to-consumer deliveries of
larger merchandise reflects our adjustment to certain industry realities and
trends as are discussed below.

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<PAGE>

         Shortly before the acquisition of Chesapeake Logistics, Last Mile
Logistics Group, Inc. changed its name from David Interns Corp. to Last Mile
Logistics Group, Inc. ("LMLG"). LMLG acquired all of the issued and outstanding
units of ownership in Chesapeake Logistics, thereby causing Chesapeake Logistics
to become a wholly-owned subsidiary of LMLG. The business of Chesapeake
Logistics has become the only operating business of LMLG and the management of
Chesapeake Logistics has assumed the management of LMLG.

         When used herein the terms "Company," "we," "us" and "our" each refers
to the combined business entity of LMLG and Chesapeake Logistics, unless the
context otherwise indicates.

GOING CONCERN

         Our financial statements have been prepared on a "going concern" basis,
which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business. Our independent auditor has expressed
substantial doubt as to our ability to continue as a going concern. As shown in
the financial statements, for the year ended December 31, 2007, we had net sales
of $1,941,627, as compared to net sales of $1,708,726 for the year ended
December 31, 2006. For the year ended December 31, 2007, we incurred a net loss
of $631,477, as compared to a net loss of $1,283,277 for the year ended December
31, 2006.

         At December 31, 2007, we had a stockholders' deficit of $1,447,970. At
December 31 2007, we had current assets of $417,464 and current liabilities of
$1,074,930, resulting in a working capital deficit of $657,466.

         We have utilized existing lines of credit and related party investments
to fund our working capital needs in 2007. At December 31, 2007, the current
portion of our long-term debt was $466,632, our long-term debt was $843,186
which includes notes payable to related parties of $612,834. We believe that we
will generate sufficient operating capital through operations to meet our debt
service requirements and to maintain our business at its present level. However,
if we fail for any reason to repay any of our loans on a timely basis, then we
may have to curtail our business sharply or cease our operations altogether.

         Alternatively, any shortfall in our cash flow requirements may be met
through private placements of our common stock and incurring debt. No assurances
can be given that financing will be available or be sufficient to meet our
capital needs. In March 2007, we secured a total of $175,000 of equity
investment in the Company. If we are unable to generate profits or are unable to
obtain financing to meet our working capital requirements, then we may be
required to modify our operations, including curtailing our business
significantly or ceasing operations altogether. The financial statements do not
include any adjustments relating to the recoverability and classification of
liabilities that might be necessary should we be unable to continue as a going
concern. Our continuation as a going concern is dependent upon our ability to
generate sufficient cash flow to meet our obligations on a timely basis, to
retain our current financing, to obtain additional financing, if necessary, and
ultimately to return to profitability. Should any of these events not occur, our
financial statements will be adversely affected and our business may not
survive.


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<PAGE>

INDUSTRY BACKGROUND AND TRENDS

         We view the logistics industry as consisting of two segments. The first
segment, in our view, involves the transportation and delivery of envelopes and
small packages. The providers of these services include the United States Post
Office, Federal Express, UPS and other, smaller courier services. By providing
courier services, we compete in this segment. Due to the increasing use of email
and faxes, as well as the efficiencies of large, integrated entities such as the
United States Post Office, Federal Express and UPS, our courier business has
been shrinking for several years.

         The second segment, in our view, involves the transportation and
delivery of freight. The freight delivery industry is generally characterized by
two types of carriers: long haul carriers and "last mile" carriers. Long haul
carriers include trucking companies and air freight companies that typically
transport freight from one market or city to another, but do not provide
"door-to-door" service. "Last mile" carriers include delivery services that
typically transport freight from a local warehouse or retail establishment to
the ultimate destination within a metropolitan or other relatively finite area.
We provide "last mile" delivery services in the mid-Atlantic region and thereby
compete in this segment as well.

         The "last mile" delivery industry has historically been highly
fragmented and highly localized. No national or international company has yet
become a dominant provider of "last mile" delivery services.

         In our opinion, several trends have combined to increase the demand for
"last mile" delivery services, including without limitation the following:

         1. Growth in Internet Sales. The growth in retail sales via the
internet has sharply increased the need for last mile delivery services. We
anticipate that retail sales via the internet and the need for last mile
delivery services will continue to grow. While the transportation and delivery
of small packages is provided by the United States Post Office, Federal Express,
UPS and similar entities, last mile service providers are necessary to deliver,
assemble and install larger items, such as furniture, appliances, large screen
televisions, entertainment centers and exercise equipment.

         2. Growth in Aging Population. As the American population has grown
older, the medical requirements and physical limitations of the aging have
increased. As a result, sales of items such as lift beds and chairs,
wheelchairs, electric scooters, massage chairs, exercise equipment and other
items designed to make life easier for those growing older have increased. We
expect this trend to continue. In most cases, last mile service providers are
required to deliver, assemble and install these items.

         3. Growth in Outsourcing of Logistics Services. As retailers have
focused on their core competencies in order to compete effectively, many have
elected to outsource delivery services in order to reduce capital investment in
warehouse and transportation assets and to reduce warehouse and transportation
expenses. We anticipate that this trend will continue.

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<PAGE>

         4. Need for Retailers to Differentiate Themselves. In order to compete
effectively, retailers are constantly seeking new and better ways to
differentiate themselves from their competitors. We believe that many retailers
have come to the realization that prompt and efficient delivery service,
including placing merchandise in the consumer's room of choice, removal of
packaging materials and assembly and installation, offer an effective means to
differentiate themselves from their competitors and to enhance the customer's
experience. As a result, we expect that increasing numbers of retailers will
engage last mile service providers to perform these increasingly important
functions.

         5. Retailers' Need for Superior Service and Product Availability. We
have observed that retailers are attempting to increase market share through
superior service and product availability. The need for prompt, reliable
delivery, assembly and installation of merchandise gives a competitive advantage
to those last mile service providers, such as the Company, that also provide
warehouse space to customers, thereby allowing retailers to place their
merchandise closer to customers without having to utilize valuable retail space
and enabling quick, easy and efficient response to customer orders.

SERVICES PROVIDED BY CHESAPEAKE LOGISTICS

         Through our Chesapeake Logistics subsidiary, we offer the following
logistics services:

                  Same-day and rush on-demand courier service;

                  Scheduled same-day route delivery of packages and other items;

                  Customer scheduling within designated time window;

                  Pickup and delivery of merchandise;

                  Temporary storage of merchandise, if necessary;

                  Assembly and placement of merchandise at customer's residence;

                  Cross-docking and safe storage of merchandise; and

                  Reverse logistic services, such as picking up, storing,
                  packaging and transporting customer returns.

OPERATIONS

         We operate from a single 21,000 square foot facility located in
Elkridge, Maryland. We provide regional delivery services to the states of
Maryland, Virginia, West Virginia, Pennsylvania, Delaware and the District of
Columbia. Management of the Company is involved in all aspects of Company
operations, and is supported by an operations supervisor, a controller,
dispatchers, customer service personnel and delivery crew workers.

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<PAGE>

         All of our employees submit to background checks and drug screening.
All of our employees are required to wear clean uniforms when meeting the
public. All of our vehicles bear the Chesapeake Logistics name and logo.

         Scheduled Heavy Goods Delivery. Orders for the delivery of heavy goods
come from customers through a variety of means, including telephone calls,
faxes, emails and website postings. Customer service personnel respond to these
order requests based on specific agreements we have in place with our clients.

         We first confirm the availability of the merchandise to be delivered.
We generally receive merchandise for delivery in one of three ways: by our
picking up the merchandise at our client's warehouse or retail location, by our
picking up the merchandise at a designated freight carrier's local terminal, or
by our taking delivery of the merchandise directly from a freight carrier at our
facility.

         Our client will provide us with contact information relating to its
customer. Once we confirm that the merchandise is available for delivery, we
will contact that customer within twenty-four hours to schedule a delivery on a
specific date, usually within three days, and within a four-hour window on that
day.

         Our logistics coordinators generally determine the delivery window
based on our existing truck route schedules, and where the delivery location
optimally fits into our schedule. Once all routes are established for the
following day, delivery crews and vehicles are assigned to specific routes, and
route directions are computer generated.

         On the day of the delivery, the driver of the delivery vehicle reviews
his route requirements (e.g., location of stops, driving directions and
merchandise to be delivered) before loading the vehicle. The dispatcher on duty
releases merchandise to the delivery crew (driver and helper) who then load
their vehicle based on the order of the deliveries.

         Prior to arrival at customer location, the delivery crew will contact
the dispatcher using a two-way Nextel radio when they estimate their location to
be thirty minutes away from the customer location. The dispatcher then informs
the customer of the estimated arrival time.

         Upon arrival at the customer location, the driver goes to the door and
confirms that the customer desires to receive the merchandise. The delivery crew
then carries the merchandise into the customer's home or office, and depending
on the service requirements of the delivery, may place the merchandise in the
customer's room of choice, and/or assemble the merchandise, and remove the
packaging materials. Upon completion of delivery, the driver obtains a signature
from the customer as proof of the delivery ("POD"). Upon return to the vehicle,
the delivery crew will provide the name of the signatory and time of delivery
from the POD by Nextel radio to the dispatcher. The dispatcher then enters this
information into the dispatch system.

         Once all the deliveries are completed, the delivery crew returns the
vehicle to our facility. At our facility, the delivery crew disposes of all
trash by placing it into our on-site compactor and brings any merchandise
remaining on the truck inside our facility. The dispatcher records


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the inbound items on to the warehouse inventory log. The driver will then park
the vehicle for the night and submit to the dispatcher all PODs, a manifest
showing all delivery times and locations for the day, and any other relevant
paperwork.

         Same-Day and Scheduled Courier Delivery. For regularly scheduled
courier deliveries, the dispatcher will confirm via Nextel radio with the
courier that he or she is assigned to that day's route. For same-day requests
for the delivery of envelopes, packages and small boxes, our customer service
personnel immediately record orders into our dispatch system. Each order is
viewed on the dispatch screen by the dispatcher and the delivery is scheduled
with an available courier. The dispatcher assigns the delivery to the courier
via Nextel radio. If no couriers are available, then the dispatcher may
outsource the delivery request to another courier company in order to satisfy
customer's same-day delivery requirements. Upon delivery, the courier
communicates POD information to the dispatcher, who records it into the dispatch
system.

CUSTOMERS

         Our target customer is a business that distributes or sells appliances,
furniture, televisions, home medical equipment or other merchandise that
requires at least two people to carry it and that offers a delivery option to
its customers. Those businesses include national or local retailers, internet
sellers, freight brokers and freight carriers. We believe that each of our
target customers would benefit from outsourcing the "last mile" of the delivery
process, i.e., that portion of the delivery process by which merchandise is
delivered to the home or other ultimate destination.

         At present, we have approximately 60 customers. For the year ended
December 31, 2007, two customers generated revenues in excess of 10% of the
Company's total consolidated revenues. Revenues from these customers totaled
$490,482 and $242,044, respectively, or 25.3% and 12.5%, respectively, of total
consolidated revenues. For the year ended December 31, 2006, two customers
generated revenues in excess of 10% of the Company's total consolidated
revenues. Revenues from these customers totaled $464,453 and $397,736,
respectively, or 27.2% and 23.3% of total consolidated revenues, respectively.

MARKETING

         Historically, we have not devoted a substantial amount of our resources
to marketing. We generally market our services primarily through referrals from
customers, growing our business with existing customers, responding to requests
for proposals and telephone and email inquiries, and visits to target companies.
The growth of our customers, including retailers and freight brokers, has aided
our growth.

         In marketing our services, we have developed an approach to quantifying
the improvement in economic value for the client. We call this approach
Logistics Value Added or LVA(R). LVA(R) quantifies the economic value added from
supply chain improvements. Our marketing approach estimates the value generated
from outsourcing specific logistics functions, both from an income statement
perspective (such as reductions in expenses for fuel, vehicles, delivery crews,
facility operations, vehicle accidents, customer service, United States


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Department of Transportation ("DOT") regulatory compliance, employee recruiting
and retention, damage to merchandise and other related expenses) and from a
balance sheet perspective (such as improvement in inventory turnover and
reductions in investments for facilities and vehicles).

         While we hope to implement a more aggressive marketing strategy,
including completing the development of our website, preparing a brochure,
hiring dedicated sales personnel and approaching various regional retailers and
freight companies, at present, we lack adequate cash flow from operations to
accomplish this objective. As a result, we cannot predict the cost of a more
aggressive marketing strategy or whether or when we will be able to engage in a
more aggressive marketing strategy.

COMPETITION

         Both the courier industry and the "last mile" delivery segments are
highly competitive and highly fragmented. Our competitors include the United
States Post Office, Federal Express, UPS, Velocity Express and Dynamex in the
courier segment. In the "last mile" delivery segment, our competitors include
moving companies such as Bekins, Allied Van Lines and North American Van Lines,
third party logistics providers such as Exel Logistics and Cardinal Logistics,
and retail home delivery services such as Cory Home Delivery and Purnell
Furniture Services.

         We believe that we differentiate ourselves from our competitors in the
following ways:

         1. We utilize LVA(R) to educate prospective customers as to the
benefits of utilizing our services, both from an income statement and a balance
sheet perspective.

         2. Unlike most of our competitors, we generally utilize our own
employees to make deliveries, rather than independent contractors. All of our
employees submit to background checks and drug screening. All of our employees
are trained by our management and are required to comply with our policies and
procedures. As a result, we are able to maintain close supervision of our
delivery crews while they are on the road and while they are making deliveries
to our clients' customers.

         3. Unlike most of our competitors, we generally utilize our own trucks
to make deliveries, rather than those owned or leased by independent contractors
engaged to make deliveries. We can, therefore, insure that our trucks are well
maintained, clean and project a professional appearance.

         4. We specialize in making deliveries in the mid-Atlantic region. As a
result, we are able to make our deliveries in an efficient and timely manner,
thus insuring that each delivery is made within the designated four hour window.

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         5. We specialize in making deliveries of larger, heavier items of
merchandise, such as furniture, electronics and entertainment equipment. Our
employees are trained to make such deliveries and our trucks are equipped for
such deliveries. For example, each of our trucks is equipped with a lift gate
and handling equipment. As a result, we are able to make our deliveries in an
efficient and timely manner, thus insuring that each delivery is made within the
designated four hour window.

DELIVERY VEHICLES

         At present, in order to make deliveries, we utilize seven leased
trucks. All of our trucks are leased from Ryder Truck Rental, Inc. Under our
full service lease arrangement, Ryder Truck Rental, Inc. leases, washes,
maintains on a regular schedule and provides liability insurance on all of our
leased vehicles.

GOVERNMENTAL REGULATION

         Our delivery operations are subject to various state and local
regulations and, in many instances, require permits and licenses for us to
operate. Interstate and intrastate motor carrier operations are also subject to
safety requirements prescribed by the DOT and by state departments of
transportation. These include maintaining adequate liability insurance and
providing evidence thereof, passing roadside vehicle safety inspections as and
when required to do so, ensuring that drivers are properly licensed and
certified to drive particular types of vehicles, and ensuring that drivers are
in compliance with driver hours of service limitations.

         If we fail to comply with all applicable regulations, we could face
substantial fines or possible revocation of one or more of our operating
permits. To date, we have not received notice of any material non-compliance
with any applicable law, rule or regulation from any authority.

         We are subject to federal, state and local provisions relating to the
discharge of materials into the environment or otherwise for the protection of
the environment. Although current operations have not been significantly
affected by compliance with these environmental laws, governments are becoming
increasingly sensitive to environmental issues, and we cannot predict what
impact future environmental regulations may have on our business. We do not
anticipate making any material capital expenditures for environmental control
purposes.

SAFETY

         We seek to ensure that all of our vehicles and drivers meet safety
standards established by our customers and our insurance carrier, as well as the
DOT. To this end, we conduct safety training for our delivery crews from time to
time. We also review prospective drivers to ensure that they have acceptable
driving records, and we review driving records on an annual basis. Prospective
drivers are required to take a physical examination and to pass a drug test.

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<PAGE>

EMPLOYEES

         At present, we employ thirty persons on a full time basis. Our full
time employees include our Chairman of the Board and Chief Executive Officer and
our President and Chief Operating Officer. We believe our relations with our
employees to be excellent.

FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS

RISKS RELATED TO OUR BUSINESS

WE HAVE A HISTORY OF LOSSES AND WE MAY NOT RETURN TO PROFITABILITY.

         For the year ended December 31, 2007, we had net sales of $1,941,627,
as compared to net sales of $1,708,726 for the year ended December 31, 2006. For
the year ended December 31, 2007, we incurred a net loss of $631,477, as
compared to a net loss of $1,283,277 for the year ended December 31, 2006. At
December 31, 2007, we had a stockholders' deficit of $1,447,970 and a working
capital deficit of $657,466. We expect to sustain a loss for 2008.

         As a result, we will need to generate significant additional sales in
order to return to and maintain profitability. We cannot assure our shareholders
that we will achieve significant additional sales, or that we will again be
profitable and, if so, that we can sustain profitability into the future. It is
possible that we may encounter unexpected expenses. If the time required to
generate significant sales and return to profitability is longer than
anticipated, we may need to obtain working capital in the future. There can be
no assurance that we will be able to successfully complete any such financing
arrangements or that the amounts raised would meet our cash flow needs. We
cannot assure our shareholders that additional capital will be available to us
in the future on favorable terms, or at all. If adequate funds are not available
or are not available on acceptable terms, our ability to fund our business
activities essential to operate profitably would be significantly limited.

OUR AVAILABLE CASH IS LIMITED. WE MAY NEED TO RAISE ADDITIONAL CAPITAL.

         At December 31, 2007, we had a stockholders' deficit of $1,447,970. At
December 31 2007, we had current assets of $417,464 and current liabilities of
$1,074,930, resulting in a working capital deficit of $657,466. At December 31,
2007, the current portion of our long-term debt was $466,632, our long-term debt
was $843,186 which includes notes payable to related parties of $612,834. We
believe that we will generate sufficient operating capital through operations to
meet our debt service requirements and to maintain our business at its present
level. However, if we fail for any reason to repay any of our loans on a timely
basis, then we may have to curtail our business sharply or cease our operations
altogether.

         Similarly, there can be no assurance that sales will continue to
increase or even maintain current levels. If we continue to experience cash flow
difficulties, then we may need to obtain capital through equity and/or debt
financing. If additional funds are obtained by issuing equity securities and/or
debt securities convertible into equity, dilution to existing shareholders will
result, and future investors may be granted rights superior to those of existing
shareholders.


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There can be no assurances, however, that additional financing will be available
when needed, or if available, on acceptable terms. There are no current
agreements, arrangements, or understandings for any equity and/or debt
financing. The failure of the Company to obtain any such financing as required
or otherwise desired will have a material adverse effect upon the Company, its
business and operations.

OUR FINANCIAL STATEMENTS ARE SUBJECT TO A "GOING CONCERN" QUALIFICATION.

         Our financial statements appearing elsewhere in this report have been
prepared on a going concern basis that contemplates the realization of assets
and the settlement of liabilities and commitments in the normal course of
business. Management realizes that we must generate capital and revenue
resources to enable us to return to profitable operations. The realization of
assets and satisfaction of liabilities in the normal course of business is
dependent upon our making additional sales and ultimately returning to
profitable operations. No assurances can be made that we will be successful in
these activities. Should any of these events not occur, our financial statements
will be materially and adversely affected.

IN ORDER TO CONTINUE OUR GROWTH, WE NEED TO INCREASE THE VOLUME OF THE FREIGHT
DELIVERED BY US. IF WE FAIL TO INCREASE THE VOLUME OF THE FREIGHT DELIVERED BY
US, THEN WE MAY BE UNABLE TO MAINTAIN OR INCREASE OUR PROFITABILITY.

         We depend in significant part on our ability to increase the amount and
revenue per pound of the freight delivered by us in order to increase revenues
and net income from operations. Specifically, we have significant fixed costs as
a result of the equipment and facilities that we are required to maintain. The
amount of freight delivered by us and the revenue per pound we receive depend on
numerous factors, many of which are beyond our control, such as economic
conditions and the pricing of our competitors. As a result, there can be no
guarantee that the amount of freight delivered by us or the revenue per pound
realized by us will increase or even remain at current levels. If we fail to
increase the volume of the freight delivered by us or the revenue per pound of
the freight delivered by us, then we may be unable to maintain or increase our
profitability.

WE RELY UPON A SMALL NUMBER OF SIGNIFICANT CUSTOMERS, THE LOSS OF WHICH COULD
HAVE A MATERIAL ADVERSE EFFECT ON OUR FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, SUCH AS A SIGNIFICANT REDUCTION IN OUR REVENUES AND NET INCOME.

         We are dependent upon a limited number of large customers which account
for a significant portion of our revenues. We lack a diverse customer base and
are dependent upon a small number of significant customers. The loss of one or
more of such major customers, or a material reduction in services performed for
such customers, would likely have a material adverse effect on our financial
condition and results of operations, such as a significant reduction in our
revenues and net income.

         For the year ended December 31, 2007, two customers generated revenues
in excess of 10% of the Company's total consolidated revenues. Revenues from
these customers totaled $490,482 and $242,044, respectively, or 25.3% and 12.5%,
respectively, of total consolidated


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revenues. For the year ended December 31, 2006, two customers generated revenues
in excess of 10% of the Company's total consolidated revenues. Revenues from
these customers totaled $464,453 and $397,736, respectively, or 27.2%, and 23.3%
of total consolidated revenues, respectively.

OUR BUSINESS IS SUBJECT TO GENERAL ECONOMIC AND BUSINESS FACTORS, WHICH MAY
ADVERSELY IMPACT OUR SALES AND PROFITABILITY.

         Historically, economic and market shifts have created cyclical changes
in prices, sales volume and margins for the transportation and logistics
industries generally and for us. These factors include significant increases or
rapid fluctuations in fuel costs, excess capacity, surpluses in the market for
used equipment, interest rates, fuel taxes, license and registration fees,
insurance premiums, self-insurance levels and difficulty attracting and
retaining qualified personnel.

         In addition, the transportation and logistics industries, and we, are
affected by recessionary economic cycles, changes in inventory levels, and
downturns in customers' business cycles. Economic conditions may adversely
affect our customers and prospective customers, their need for transportation,
delivery and logistics services or their ability to pay for such services. The
foregoing factors could materially and adversely impact our sales and
profitability.

A DISRUPTION IN THE SUPPLY OF OR INCREASE IN THE COST OF FUEL WOULD LEAD TO
HIGHER TRANSPORTATION AND DELIVERY COSTS, THEREBY REDUCING MARGINS.

         Fuel is a significant raw material in the transportation and logistics
industries. In recent years there have been disruptions of supply and prices of
natural gas and fuel oil have been volatile, currently exceeding historical
averages. These fluctuations have historically impacted the costs of companies
in the transportation and logistics industries, including us, often contributing
to earnings volatility. While the costs of higher fuel may be passed along to
customers in the long-term through fuel surcharges, recent significant increases
in fuel prices can be expected to adversely impact our business in the near
term, and may significantly reduce our profit margins as a result.

SEASONALITY AND THE IMPACT OF WEATHER CAN MATERIALLY AFFECT OUR OPERATIONS,
WHICH MAY HAVE A MATERIAL ADVERSE EFFECT ON OUR FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, SUCH AS A SIGNIFICANT REDUCTION IN OUR REVENUES AND NET INCOME.

         Our productivity often decreases during the winter season due to
reduced demand for transportation and logistics services, as well as the impact
of inclement weather upon operations. At the same time, operating expenses
generally increase during the winter season as a result of the impact of harsh
weather on accident frequency and related liability claims. These seasonal
fluctuations may have a material adverse effect on our financial condition and
results of operations, such as a significant reduction in our revenues and net
income.

                                       13
<PAGE>

THE OCCURRENCE OF ONE OR MORE SIGNIFICANT CLAIMS COULD HAVE A MATERIALLY ADVERSE
IMPACT ON OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS, SUCH AS A
SIGNIFICANT REDUCTION IN OUR NET INCOME AND AVAILABLE CAPITAL.

         We maintain insurance for individual accident liability, workers'
compensation and general liability claims in amounts believed to be adequate.
However, the nature of transportation and logistics industry is that accidents
occur and, when they do, they frequently result in property damage, as well as
injuries or death. If we experience claims that exceed or are not covered by our
insurance or that exceed our reserves, it could increase the volatility of our
earnings and have a material adverse effect on our financial condition and
results of operations, such as a significant reduction in our net income and
available capital.

WE FACE STRONG COMPETITION, WHICH COULD IMPAIR OUR ABILITY TO MAINTAIN OUR
PROFITABILITY AND TO COMPETE WITH OTHER PROVIDERS OF SIMILAR TRANSPORTATION AND
LOGISTICS SERVICES.

         The transportation and logistics industries are highly fragmented, and
we face competition from numerous competitors, domestic and foreign. Numerous
factors could impair our ability to maintain profitability and to compete with
other providers of similar transportation and logistics services. Many of our
competitors are large, vertically integrated companies that have greater
financial and other resources, greater economies of scale, greater
self-sufficiency and lower operating costs than we do. Competitors with greater
access to financial resources may enter our markets and compete with us. In the
event that we are not able to compete successfully, our business may be
adversely affected and competition may make it more difficult for us to grow our
revenue and maintain our existing business on terms that are favorable to us.

WE MUST EFFECTIVELY MAINTAIN AND ENHANCE OUR INFORMATION TECHNOLOGY SYSTEMS, OR
RISK LOSING ORDERS AND CUSTOMERS OR INCURRING COSTS BEYOND EXPECTATIONS, WHICH
COULD CAUSE A SIGNIFICANT REDUCTION IN REVENUES AND NET INCOME.

         We must maintain and enhance their information technology systems to
remain competitive and effectively handle higher volumes of freight. We expect
our customers to continue to demand more sophisticated, fully integrated
information systems from us. If we are unable to maintain and enhance our
information systems to handle our freight volumes and meet the demands of our
customers, then our business and results of operations will be adversely
affected. In addition, if our information systems are unable to handle higher
freight volumes and increased logistics services, then our service levels and
operating efficiency may decline. This may lead to a loss of customers and a
decline in the volume of freight received from customers, which may in turn have
a material adverse effect on our financial condition and results of operations,
such as a significant reduction in our revenues and net income.

MANY OF THE INFORMATION TECHNOLOGY SYSTEMS UTILIZED BY US ARE SUBJECT TO RISKS
THAT ARE BEYOND OUR CONTROL. ANY FAILURE OF SUCH SYSTEMS COULD RESULT IN A LOSS
OF CUSTOMERS OR A REDUCTION IN DEMAND FOR OUR SERVICES.

         Many of the information technology systems utilized within the
transportation and logistics industries generally, and by us particularly, are
dependent upon global communications


                                       14
<PAGE>

providers, web browsers, telephone systems and other aspects of the Internet
infrastructure that have experienced significant system failures and electrical
outages in the past. These systems are also susceptible to outages from fire,
floods, power loss, telecommunications failures, break-ins and similar events.
Moreover, despite the implementation of network security measures, servers are
nevertheless vulnerable to computer viruses, break-ins and similar disruptions
from unauthorized tampering. The occurrence of any of these events could disrupt
or damage our information technology systems and inhibit our internal
operations, our ability to provide services to our customers and the ability of
our customers to access our information technology systems. This may result in
the loss of customers or a reduction in demand for our services, which could
have a material adverse effect on our financial condition and results of
operations, such as a significant reduction in our revenues and net income.

OUR OPERATIONS MAY BE HARMED BY TERRORIST ATTACKS OR CURRENT ANTI-TERRORISM
MEASURES, WHICH COULD CAUSE A SIGNIFICANT REDUCTION IN OUR REVENUES AND NET
INCOME.

         In the aftermath of the terrorist attacks of September 11, 2001,
federal, state and municipal authorities have implemented and are implementing
various security measures, including checkpoints and travel restrictions on
trucks in certain circumstances. Such existing measures and future measures may
have significant costs associated with them that we may be forced to bear.

WE ARE SUBJECT TO GOVERNMENT REGULATION, AND FAILURE TO COMPLY WITH SUCH
REGULATION COULD RESULT IN SUBSTANTIAL FINES OR POSSIBLE REVOCATION OF THEIR
AUTHORITY TO CONDUCT OPERATIONS.

         We are subject to transportation, environmental, labor, employment and
other governmental laws and regulations, and the impact of new laws and
regulations that may result from increased security concerns following the
events of September 11, 2001. The impact of any failure to comply with
applicable laws, ordinances or regulations could result in substantial fines or
possible revocation of our authority to conduct operations.

THE TRANSPORTATION INDUSTRY IS SUBJECT TO GOVERNMENT REGULATION, AND REGULATORY
CHANGES COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR OPERATING RESULTS OR
FINANCIAL CONDITION.

         We are licensed by the Department of Transportation as a motor carrier.
The Department of Transportation prescribes qualifications for acting in this
capacity. To date, compliance with these regulations has not had a material
adverse effect on our results of operations or financial condition. However, the
transportation industry is subject to legislative or regulatory changes that can
affect the economics of the industry by requiring changes in operating practices
or influencing the demand for, and cost of providing, transportation services.
Future laws and regulations may be more stringent and require changes in
operating practices, influence the demand for transportation services or
increase the cost of providing transportation services, any of which could
adversely affect our business.

                                       15
<PAGE>

IF WE ARE NOT ABLE TO RECRUIT AND RETAIN QUALIFIED MANAGEMENT PERSONNEL, WE MAY
FAIL TO DEVELOP OUR POTENTIAL BUSINESS OPPORTUNITIES.

         Our success is highly dependent on the retention of the principal
members of our management and sales personnel. Regina R. Flood, our Chairman and
Chief Executive Officer, and Brian P. Flood, our President, Chief Operating
Officer and Chief Financial Officer, are both critical to our ability to execute
our overall business strategy. We do not presently have any key man life
insurance on these persons; while we intend to apply for such insurance in such
amounts as we deem appropriate, it is uncertain at this time as to when we will
apply for and obtain such insurance.

         Although we are not aware that any of our key employees are currently
planning to retire or leave the company, any key employee could terminate his or
her relationship with us at any time and, subject to any non-competition
agreement with us, work for one of our competitors. Furthermore, our future
growth will require hiring a significant number of qualified management,
administrative and sales personnel. Accordingly, recruiting and retaining such
personnel in the future will be critical to our success. There is intense
competition from other companies for qualified personnel in the areas of our
activities. If we are not able to continue to attract and retain, on acceptable
terms, the qualified personnel necessary for the continued development of our
business, we may not be able to sustain our operations or achieve our business
objectives.

RISKS RELATED TO OUR STOCK

AN ACTIVE PUBLIC MARKET FOR OUR COMMON STOCK MAY NOT DEVELOP OR BE SUSTAINED,
AND OUR COMMON STOCK MAY HAVE A VOLATILE PUBLIC TRADING PRICE.

         Our common stock does not trade in a public market. While we hope to
establish a public market for our common stock, such a market may not develop or
be sustained. As a result, our investors may not be able to sell their shares
quickly or at the market price if trading in our stock is not active. If a
public market does develop, the number of shares available for sale is, at least
initially, anticipated to be limited. Therefore, the share price may be
volatile.

SALES OF SUBSTANTIAL AMOUNTS OF OUR COMMON STOCK, OR THE AVAILABILITY OF THOSE
SHARES FOR FUTURE SALE, COULD ADVERSELY AFFECT OUR STOCK PRICE AND LIMIT OUR
ABILITY TO RAISE CAPITAL.

         We are unable to predict the effect, if any, that future sales of
common stock or the potential for such sales may have on the market price of the
common stock prevailing from time to time. The market price of our common stock
could decline as a result of sales of substantial amounts of our common stock in
the public market or the perception that substantial sales could occur. These
sales also may make it more difficult for us to sell common stock in the future
to raise capital.

                                       16
<PAGE>

WE HAVE NOT PAID CASH DIVIDENDS AND DO NOT EXPECT TO IN THE FORESEEABLE FUTURE,
WHICH MEANS THAT THE VALUE OF OUR SHARES CANNOT BE REALIZED EXCEPT THROUGH SALE.

         We have never declared or paid cash dividends. We currently expect to
retain earnings for our business and do not anticipate paying cash dividends on
our common stock at any time in the foreseeable future. Because we do not
anticipate paying cash dividends in the future, it is likely that the only
opportunity to realize the value of our common stock will be through a sale of
those shares. The decision whether to pay cash dividends on common stock will be
made by the Board of Directors from time to time in the exercise of its business
judgment. Furthermore, we may be restricted from paying dividends by the terms
of any credit facility we may enter into in the future.

THE OWNERSHIP OF OUR COMMON STOCK IS CONCENTRATED IN THE HANDS OF OUR EXISTING
DIRECTORS AND EXECUTIVE OFFICERS. AS A RESULT, YOU MAY NOT BE ABLE TO EXERT
MEANINGFUL INFLUENCE ON SIGNIFICANT CORPORATE DECISIONS.

         Our directors and executive officers beneficially own, in the
aggregate, approximately 87% of our outstanding shares of common stock. These
persons, acting together, will be able to exercise significant influence over
all matters requiring stockholder approval, including the election and removal
of directors and any merger, consolidation or sale of all or substantially all
of our assets. In addition, these persons, acting together, have the ability to
control the management and affairs of our company. This concentration of
ownership may harm the market price of our common stock by delaying or
preventing a change in control of our company at a premium price even if
beneficial to our other stockholders.

VARIOUS ANTITAKOVER PROVISIONS ARE CONTAINED IN OUR AMENDED AND RESTATED
ARTICLES OF INCORPORATION AND OUR AMENDED AND RESTATED BYLAWS. AS A RESULT, ANY
TAKEOVER OF THE COMPANY MAY BE DELAYED OR DISCOURAGED AND THE ABILITY OF THE
SHAREHOLDERS TO CHANGE THE DIRECTION AND MANAGEMENT OF THE COMPANY MAY BE
DELAYED OR LIMITED.

         Our Amended and Restated Articles of Incorporation provide for a
staggered Board of Directors. Brian P. Flood's term expires in 2008 and Regina
R. Flood's term expires in 2009. Our Amended and Restated Articles of
Incorporation, as amended, also provide for a substantial number of shares of
common stock and "blank check" preferred stock authorized for issuance solely by
action of the Board of Directors. Our Amended and Restated Bylaws provide, among
other things, that nominations for election to our Board of Directors, other
than those made by the Board of Directors, must be made by written notification
delivered to the Company not less than 20 and not more than 50 days prior to any
annual or special meeting of shareholders called for the election of directors.
Such provisions may have the effect of delaying or discouraging any takeover of
the Company by others or otherwise delaying or limiting the shareholders'
ability to change the direction and management of the Company.

                                       17
<PAGE>

OUR COMMON STOCK MAY BE SUBJECT TO THE SEC'S PENNY STOCK SALES RULES.

         The SEC has adopted regulations which generally define penny stocks to
be equity securities that have a market price of less than $5.00 per share. Such
designation imposes additional sale practice requirements on broker-dealers
which sell such securities to persons other than established customers and
institutional accredited investors.

         For transactions covered by these regulations, a broker-dealer must
make a special suitability determination for the purchaser. A broker-dealer must
obtain from the potential purchaser information concerning the person's
financial situation, investment experience and investment objectives and, based
upon that and other information available to it, make a determination that
transactions in penny stocks are suitable for the purchaser and that the
purchaser has sufficient knowledge and experience in financial matters so that
the purchaser reasonably may be expected to be capable of evaluating the risks
of transactions in penny stocks. A broker-dealer must also receive the
purchaser's written consent to the transaction prior to sale.

         These penny stock rules may restrict the ability of brokers, dealers
and investors to sell our common stock to the extent our common stock may be
subject to such rules.

ITEM 2.  DESCRIPTION OF PROPERTY.

         We lease from an unaffiliated party approximately 21,000 square feet of
office and warehouse space located at 6675 Amberton Drive, Elkridge, Maryland
21075 for a monthly rental of approximately $10,364. The term of the lease is
for a period of eighty-six months, commencing as of June 1, 2006.

ITEM 3.  LEGAL PROCEEDINGS.

         We have not been a party to and none of our property has been or is
subject to any pending or threatened material legal, governmental,
administrative or judicial proceedings.

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

         No matters were submitted to the shareholders during the fourth quarter
of the fiscal year ended December 31, 2007.

                                       18
<PAGE>
                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
         SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES.

TRADING MARKET

         Since July 2007, our common stock has traded on the Over-the-Counter
Bulletin Board or OTCBB under the symbol "LMLG." Prior to that time, it did not
trade in a public market.

         The following table sets forth certain information with respect to the
high and low bid prices of the Company's common stock for the fiscal year ended
December 31, 2007.

QUARTER ENDED                       HIGH BID                  LOW BID
-------------                       --------                  -------
September 30, 2007                    .85                       .00

December 31, 2007                     .40                       .30

         The quotations reflect interdealer prices without retail markup,
markdown, or a commission, and may not necessarily represent actual
transactions.

HOLDERS

         As of March 31, 2008, there were 604 shareholders of record of LMLG.

DIVIDENDS

         We have never declared or paid a cash dividend. There are no
restrictions on the common stock or otherwise that limit the ability of us to
pay cash dividends if declared by the Board of Directors.

         The holders of common stock are entitled to receive dividends if and
when declared by the Board of Directors, out of funds legally available therefor
and to share pro-rata in any distribution to the shareholders. Generally, we are
not able to pay dividends if after payment of the dividends, we would be unable
to pay our liabilities as they become due or if the value of our assets, after
payment of the liabilities, is less than the aggregate of our liabilities and
stated capital of all classes.

         We do not anticipate declaring or paying any cash dividends in the
foreseeable future.

                                       19
<PAGE>

RECENT SALES OF UNREGISTERED SECURITIES

         Except as otherwise described below, during 2007, we issued the
following Company securities pursuant to Section 4(2) of the Securities Act of
1933 based upon the limited number of offerees, their relationship to the
Company, their status as accredited investors, the amount of securities offered
in each offering, the size of the respective offerings, and the manner of each
offering: In each instance, the investor was provided with, or had access to,
adequate information about the Company so as to be able to make an informed
investment decision. Except as otherwise described below, the Company had a
reasonable basis to believe that each investor was an "accredited investor," as
such term is defined in Regulation D, and otherwise possessed the requisite
sophistication in business matters.

         On February 19, 2007, in order to induce him to become an employee of
LMLG, LMLG granted options to purchase 1,000,000 shares of its common stock to
Barry Utz. The options were granted at an exercise price of $0.10 per share.
250,000 options vest on February 18, 2008, an additional 250,000 options vest on
February 18, 2009, an additional 250,000 options vest on February 18, 2010, and
an additional 250,000 options vest on February 18, 2011. Vested options may be
exercised at any time through February 18, 2017.

         On March 14, 2007, David Gibson acquired 1,000,000 shares of common
stock of LMLG for cash in the amount of $150,000. The certificate representing
shares of common stock of LMLG contained a legend restricting transferability
under the Securities Act of 1933.

         On March 22, 2007, John Schmidt acquired 166,667 shares of common stock
of LMLG for cash in the amount of $25,000. The certificate representing shares
of common stock of LMLG contained a legend restricting transferability under the
Securities Act of 1933.

         On January 14, 2008, Agoracom International Enterprises Corp. acquired
200,000 shares of common stock of LMLG in consideration of services valued at
$30,000. The certificate representing shares of common stock of LMLG contained a
legend restricting transferability under the Securities Act of 1933.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS.

GENERAL

         Active operations of our subsidiary, Chesapeake Logistics, commenced in
October 1997. We acquired Chesapeake Logistics as of October 2, 2006. As a
result of the acquisition, on that date, the members of Chesapeake Logistics
held approximately 92% of the outstanding shares of common stock of LMLG.
Therefore, Chesapeake Logistics was deemed to be the acquirer for accounting
purposes. Accordingly, the accompanying financial statements present the
historical results of Chesapeake Logistics prior to the acquisition date and the
combined results from the date of acquisition forward.

                                       20
<PAGE>

COSTS OF BEING REGISTERED UNDER THE SECURITIES EXCHANGE ACT OF 1934

         We recognize that there are substantial costs associated with our being
registered under the Securities Exchange Act of 1934. Such costs include without
limitation increased legal fees, audit and accounting fees, transfer agent fees
and expenses, printing and mailing expenses, and salaries for additional
in-house accounting personnel. As a result, our selling, general and
administrative expenses increased in 2007 as compared to prior years. We expect
those costs to continue in 2008.

         At present, we are unable to absorb these additional costs, and we
expect that these additional costs will have a detrimental effect upon our
financial results. While no assurances can be given, it is our belief that these
increased costs will be absorbed eventually by increased revenues.

REVENUES, COST OF SALES AND OTHER EXPENSES GENERALLY

         Our revenues are derived from charges to customers for logistics
services, including delivery, cross-docking, assemblies, product inspections,
warehousing, packaging disposal and product returns. Sales are recognized when
the service is completed. The yield (value per transaction) for a particular
service is dependent upon a number of factors, including the size and weight of
items, distance transported, special handling requirements, requested delivery
time and local market conditions. Generally, items of greater weight transported
over longer distances and those that require special handling produce higher
yields.

         The principal components of our cost of sales are costs relating
directly to the performance of services, including driver and helper wages and
benefits, third party delivery charges, fuel, vehicle lease and rental costs.
Drivers and helpers are generally compensated based on a percentage of the
delivery charge; therefore, this expense is variable in nature. While fuel costs
are subject to fluctuation, a portion of this fluctuation is mitigated by fuel
surcharge agreements with customers.

         Selling, general and administrative expenses ("SG & A") include
salaries, wages and benefit costs of dispatch, customer service and other
administrative personnel, officers' compensation, facility rent and associated
costs, insurance, telecommunications and other administrative and support costs.

         While we do not own our facility and vehicles, we have lease
commitments on both. Depreciation expense primarily relates to depreciation of
computer equipment, office furniture and software.

         Effective August 1, 2001, Chesapeake Logistics adopted Statement of
Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets,"
which requires, among other things, that goodwill no longer be amortized.

                                       21
<PAGE>

EXPENSES AS A PERCENTAGE OF SALES

         The following table sets forth for the periods indicated certain items
from our consolidated statement of operations, expressed as a percentage of
sales:

                                                YEAR ENDED DECEMBER 31,
                                              -------------------------
                                               2007                 2006
                                              -----                -----
Sales                                         100.0%               100.0%

Cost of sales:
     Purchased transportation                  13.8%                21.5%
     Wages and employee benefits               21.4%                18.8%
     Fuel                                       7.8%                 8.0%
     Vehicle lease and rental                   5.0%                 6.7%
     Other                                     11.5%                 8.8%
                                              -----                -----

         Cost of sales                         59.5%                63.8%
                                              -----                -----

Gross margin                                   40.5%                36.2%

Selling, general and administrative:
     Salaries and employee benefits            19.1%                17.1%
     Officers' compensation                    14.5%                 7.7%
     Insurance                                  4.4%                 6.6%
     Rent                                       6.9%                 6.8%
     Professional fees                         11.3%                12.0%
     Bad debt expense                           2.4%                 3.1%
     Facility expenses                          1.7%                 2.2%
     Employee recruiting costs                  0.4%                 1.9%
     Relocation expense                         0.0%                 2.3%
     Other                                      7.0%                 5.6%
                                              -----                -----

         Selling, general and administrative   67.7%                65.3%
                                              -----                -----

Other operating losses:
     Loss on impairment of goodwill             0.0%                40.9%
     Loss on sale of assets                     0.0%                 0.5%
                                              -----                -----
         Other operating losses                 0.0%                41.4%
                                              -----                -----

Loss from Operations                          (27.2)%              (70.5)%

Interest expense                                5.3%                 4.6%
                                              -----                -----

Net loss                                      (32.5)%              (75.1)%
                                              =====                =====

                                       22
<PAGE>

YEAR ENDED DECEMBER 31, 2007 COMPARED TO YEAR ENDED DECEMBER 31, 2006

         For the years ended December 31, 2007, we had net sales of $1,941,627,
as compared to net sales of $1,708,726 for the year ended December 31, 2006, an
increase of 13.6%. Throughout both 2007 and 2006, deliveries of envelopes and
small packages continued to decline. This decrease in courier revenues was more
than offset by sales generated from the addition of new customers, along with
increased business from our two largest freight customers.

         For the year ended December 31, 2007, our cost of sales was $1,154,525,
as compared to cost of sales of $1,090,061 for the year ended December 31, 2006,
an increase of 5.9%. This increase is primarily attributable to the increase in
net sales. While the cost of sales increased from 2006 to 2007, the resulting
gross margin as a percentage of net sales increased from 36.2% in 2006 to 40.5%
in 2007. This improvement can be attributed the following factors:

         1. The continued shift from purchased transportation to employee
delivery crews reduced purchased transportation expense while it increased
employee wages. However, when combined with more efficient route management, the
result was an overall decrease in combined purchased transportation and employee
wage expenses as a percentage of revenues.

         2. Fuel expense and vehicle lease and rental costs declined as a
percentage of sales primarily due to more efficient route management. These
benefits were offset by an increase in other direct cost, which includes vehicle
maintenance.

         For the year ended December 31, 2007, we had SG&A of $1,315,788, as
compared to SG&A of $1,116,102 for the year ended December 31, 2006, an increase
of $199,686 or 17.9%. This increase in SG&A is attributable to the following:

         1. We experienced increased costs for salaries and employee benefits
for new personnel required to operate the expanding freight delivery business.

         2. We experienced an increase in officer compensation as a result of
our having a full year of employment agreements with our two executive officers.

         3. We experienced decreased insurance costs as a result of improved
experience ratings for workers compensation and liability insurance.

         4. We experienced higher facility rental costs and associated facility
expenses due to having a full year of the lease of new warehouse facility,
entered into in July, 2006, in order to adequately service the planned expansion
of our freight delivery business.

         5. We experienced an increase in professional fees primarily from
increased investor relations and marketing activities.

                                       23
<PAGE>

         6. We experienced a decrease in bad debt expense due largely to
increased collection efforts. We continuously monitor the status of aging
receivables through communication with our customers, including sending customer
statements detailing unpaid invoices. We evaluate the adequacy of our allowance
for doubtful accounts on a quarterly basis.

         7. In 2006 we experienced relocation expenses as the result of moving
our warehouse and office facilities from Beltsville, Maryland to a larger
facility in Elkridge, Maryland. There were no costs associated with that
relocation in 2007.

         8. We experienced an increase in other SG&A costs, largely attributable
to computer consulting services related to the implementation effort of new
dispatch and billing software.

         For the year ended December 31, 2006, we recorded a loss on impairment
of goodwill of $698,320, the full value of previously recorded goodwill
associated with the acquisition of U.S. Couriers by Chesapeake Logistics in
2000. This estimate of goodwill impairment was based on the Company's negative
cash flows and recurring loses from operations, and associated substantial doubt
as to the Company's ability to continue as a going concern.

         For the year ended December 31, 2007, we had a net loss of $631,477, as
compared to a net loss of $1,283,277 for the year ended December 31, 2006. This
is primarily a reflection of the costs we have encountered in managing the
transition to and growth of our freight delivery business, as well as the other
matters described herein.

         At December 31, 2007, we had a stockholders' deficit of $1,447,970. At
December 31 2007, we had current assets of $417,464 and current liabilities of
$1,074,930, resulting in a working capital deficit of $657,466. This again
reflects the increased costs we have encountered in managing the growth of our
freight delivery business.

LIQUIDITY AND CAPITAL RESOURCES

         We are experiencing substantial cash flow difficulties and we
anticipate that we will continue to experience cash flow difficulties for some
time. As a result, we have no present plans to make any material capital
expenditures. At December 31, 2007, we had a working capital deficit of
$657,466. Although no assurances can be given, we believe that our working
capital will improve as net sales derived from the delivery of freight increase.
In addition, although no assurances can be given, we believe that we may be able
to secure equity and/or debt financing.

         With our transition to a freight delivery business, we have experienced
greater pricing variables and service requirements. This has contributed to an
increase in receivables aging, which, in turn, has had a negative impact on our
liquidity. We believe that we can improve our cash flow through more diligent
review of billing and more stringent collection of receivables. However, if we
fail for any reason to do so, then an increase receivables aging may have a
material adverse effect upon our working capital and liquidity.

                                       24
<PAGE>

         We have utilized existing lines of credit and related party debt to
fund our working capital needs in 2006 and 2007. At December 31, 2007, the
current portion of our long-term debt was $466,632, our long-term debt was
$843,186 which includes notes payable to related parties of $612,834. We believe
that we will generate sufficient operating capital through operations to meet
our debt service requirements and to maintain our business at its present level.
However, if we fail for any reason to repay any of our loans on a timely basis,
then we may have to curtail our business sharply or cease our operations
altogether.

         If we continue to experience cash flow difficulties, then we may need
to obtain capital through equity and/or debt financing. We believe that the
creation of a trading market for our common stock will enhance our ability to
raise capital through the sale of equity securities. However, this may not prove
to be the case. If we cannot obtain any necessary capital, then we may be forced
to cease or significantly curtail our operations. This would materially and
adversely impact our ability to continue our present operations.

         No assurance can be given that, if we attempt to secure equity and/or
debt financing, such financing will be available, and, if available, whether it
will take the form of debt or equity. Should we secure such financing, such
financing could have a negative impact on our financial condition and our
shareholders. The sale of debt would, among other things, adversely impact our
balance sheet, increase our expenses and increase our cash flow requirements.
The sale of equity would, among other things, result in dilution to our
shareholders.

OFF-BALANCE SHEET ARRANGEMENTS

         We have no off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to investors.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

         The preparation of financial statements and related notes requires us
to make judgments, estimates, and assumptions that affect the reported amounts
of assets, liabilities, revenue and expenses, and related disclosure of
contingent assets and liabilities. An accounting policy is considered to be
critical if it requires an accounting estimate to be made based on assumptions
about matters that are highly uncertain at the time the estimate is made, and if
different estimates that reasonably could have been used, or changes in the
accounting estimates that are reasonably likely to occur periodically, could
materially impact the financial statements.

         Because of our level of operations, we have had to make limited
material assumptions or estimates other than our assumption that we are a going
concern.

         One such accounting policy we consider critical is that used in the
accounting for the acquisition of Chesapeake Logistics by LMLG in a manner that
constitutes a reverse acquisition and is accounted for as a recapitalization of
the combined company. Accordingly, the assets and liabilities of Chesapeake
Logistics have been presented in the consolidated balance sheet at book


                                       25
<PAGE>

value. The historical operations presented in the Company's Consolidated
Statements of Operations are those of Chesapeake Logistics. As a result of the
reverse acquisition, LMLG became the sole limited liability company member of
Chesapeake Logistics by issuing 45,000,000 shares of its common stock for all of
the outstanding units of ownership in Chesapeake Logistics.

         An important accounting estimate that has an impact on our financial
statements is the valuation of stock options, as is described in Note 8 to the
Notes to the Financial Statements. Management applied the Black-Scholes option
pricing model to estimate the value of these options. The inputs for the
Black-Scholes pricing model include the volatility of the common stock and the
estimated value per share of common stock. In accordance with Financial
Accounting Standards No. 123 (revised 2004), a non-public entity is required to
use the historical volatility of an appropriate industry sector when historical
information is unavailable. By utilizing the Dow Jones 20 Transportation Index
over the past five years, management has determined that the expected volatility
of our shares of common stock as of the option grant dates is 21%. Since we do
not have a market-based price for our shares of common stock, management relied
on an industry-based revenue multiple, with a 50% discount applied deemed
appropriate by management due to the limited size of our current operations and
the numerous risks associated with the our business and our stock set forth
herein. The result of these estimates generates an option grant date estimated
fair value of our shares of common stock of $0.036 per share. Applying this
valuation in the Black-Scholes option pricing model generates an option value of
$0.001 as of the option grant dates.

ITEM 7.  FINANCIAL STATEMENTS.

         Report of Independent Registered Public Accounting Firm

         Consolidated Balance Sheet at December 31, 2007

         Consolidated Statements of Operations for the years ended December 31,
2007 and December 31, 2006

         Consolidated Statements of Stockholders' Deficit for the years ended
December 31, 2007 and December 31, 2006

         Consolidated Statements of Cash Flow for the years ended December 31,
2007 and December 31, 2006

         Notes to the Consolidated Financial Statements

                                       26
<PAGE>
             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of
Last Mile Logistics Group, Inc. and Subsidiary
Elkridge, Maryland

We have audited the accompanying consolidated balance sheet of Last Mile
Logistics Group, Inc. and Subsidiary as of December 31, 2007 and the related
consolidated statements of operations, stockholders' deficit, and cash flows for
the years ended December 31, 2007 and 2006. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Last Mile Logistics
Group, Inc. and Subsidiary as of December 31, 2007 and the results of their
operations and their cash flows for the years ended December 31, 2007 and 2006
in conformity with accounting principles generally accepted in the United States
of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 13 to
the financial statements, the Company has a working capital deficit, negative
cash flows from operations, and losses from inception which raises substantial
doubt about its ability to continue as a going concern. Management's plans in
regard to these matters are also described in Note 13. These consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.


/s/ Bouwhuis, Morrill & Company
    ---------------------------
Bouwhuis, Morrill & Company
Layton, Utah
March 24, 2008

                                       27
<PAGE>
                 LAST MILE LOGISTICS GROUP, INC. AND SUBSIDIARY
                           Consolidated Balance Sheet

                                                               DECEMBER 31, 2007
                                                               -----------------
                                     ASSETS
    CURRENT ASSETS
        Cash and cash equivalents                                   $    21,390
        Accounts receivable, net (Note 2)                               386,564
        Prepaid and other current assets                                  9,510
                                                                    -----------

            Total Current Assets                                        417,464
                                                                    -----------

    PROPERTY & EQUIPMENT - NET (Note 2)                                  31,157
                                                                    -----------

    OTHER ASSETS
        Deposits                                                         21,525
                                                                    -----------

            Total Other Assets                                           21,525
                                                                    -----------

            TOTAL ASSETS                                            $   470,146
                                                                    ===========

                    LIABILITIES AND STOCKHOLDERS' DEFICIT
    CURRENT LIABILITIES
        Accounts payable                                            $   198,491
        Accrued expenses                                                409,807
        Current portion of long-term debt (Note 5)                      466,632
                                                                    -----------

            Total Current Liabilities                                 1,074,930
                                                                    -----------

    LONG-TERM LIABILITIES
        Long-term debt (Note 5)                                         230,352
        Note payable to related parties (Note 4)                        612,834
                                                                    -----------

            Total Long-Term Liabilities                                 843,186
                                                                    -----------

            TOTAL LIABILITIES                                         1,918,116
                                                                    -----------

    STOCKHOLDERS' DEFICIT
        Common stock, $.0001 par value; 100,000,000 shares
        authorized, 50,152,667 issued and outstanding                     5,016
        Additional paid-in capital                                      248,425
        Accumulated deficit                                          (1,701,411)
                                                                    -----------

            TOTAL STOCKHOLDERS' DEFICIT                              (1,447,970)
                                                                    -----------

            TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT             $   470,146
                                                                    ===========

              The accompanying notes are an integral part of these
                       consolidated finncial statements.

                                       28
<PAGE>
                 LAST MILE LOGISTICS GROUP, INC. AND SUBSIDIARY
                      Consolidated Statements of Operations
<TABLE>
<CAPTION>
                                                               YEAR ENDED DECEMBER 31,
                                                           ----------------------------
                                                               2007             2006
                                                           ------------    ------------
<S>                                                        <C>             <C>
NET SALES                                                  $  1,941,627    $  1,708,726

COST OF SALES
   Purchased transportation                                     267,842         367,628
   Wages and employee benefits                                  414,663         320,431
   Fuel                                                         151,403         137,169
   Vehicle lease and rental                                      98,050         114,241
   Other direct costs                                           222,567         150,592
                                                           ------------    ------------
      Total Cost of Sales                                     1,154,525       1,090,061
                                                           ------------    ------------

GROSS MARGIN                                                    787,102         618,665
                                                           ------------    ------------

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
   Salaries and employee benefits                               654,210         425,316
   Insurance                                                     85,252         113,294
   Rent                                                         133,511         115,755
   Professional fees                                            220,641         204,507
   Bad debt expense                                              46,432          53,028
   Facility expenses                                             33,729          37,517
   Employee recruiting costs                                      7,025          31,713
   Relocation expenses                                               --          39,414
   Other                                                        134,988          95,558
                                                           ------------    ------------
      Total Selling, General and Administrative Expenses      1,315,788       1,116,102
                                                           ------------    ------------

OTHER OPERATING LOSSES
   Loss on impairment of goodwill                                    --         698,320
   Loss on sale of assets                                            --           8,015
                                                           ------------    ------------
      Total Other (Income) Expenses                                  --         706,335
                                                           ------------    ------------

LOSS FROM OPERATIONS                                           (528,686)     (1,203,772)
                                                           ------------    ------------

INTEREST EXPENSE                                                102,791          79,505
                                                           ------------    ------------

NET LOSS BEFORE INCOME TAXES                                   (631,477)     (1,283,277)

PROVISION FOR INCOME TAXES                                           --              --
                                                           ------------    ------------

NET LOSS                                                   $   (631,477)   $ (1,283,277)
                                                           ============    ============

BASIC NET LOSS PER SHARE                                   $      (0.01)   $      (0.03)
                                                           ============    ============

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING                49,894,219      45,975,452
                                                           ============    ============
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated finncial statements.

                                       29
<PAGE>
                 LAST MILE LOGISTICS GROUP, INC. AND SUBSIDIARY
                Consolidated Statements of Stockholders' Deficit
                 For the Years Ended December 31, 2007 and 2006
<TABLE>
<CAPTION>
                                                  COMMON STOCK          ADDITIONAL
                                           -------------------------      PAID-IN     ACCUMULATED
                                              SHARES        AMOUNT        CAPITAL       DEFICIT
                                           -----------   -----------   -----------    -----------
<S>                                         <C>          <C>           <C>            <C>
Balance, December 31, 2005                  43,650,000   $     4,365   $   185,465    $   213,343

Common stock issued in exchange
for services rendered                        1,350,000           135         9,865             --

Recapitalization of Chesapeake Logistics
LLC through reverse merger with Last
Mile Logistics Group, Inc.                   3,986,000           399      (125,399)            --

Stock options and warrants issued                   --            --         2,260             --

Net loss for the year ended
December 31, 2006                                   --            --            --     (1,283,277)
                                           -----------   -----------   -----------    -----------

Balance, December 31, 2006                  48,986,000         4,899        72,191     (1,069,934)

Common stock issued for cash                 1,166,667           117       174,883             --

Stock options and warrants issued                   --            --         1,351             --

Net loss for the year ended
December 31, 2007                                   --            --            --       (631,477)

                                           -----------   -----------   -----------    -----------
Balance, December 31, 2007                  50,152,667   $     5,016   $   248,425    $(1,701,411)
                                           ===========   ===========   ===========    ===========
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated finncial statements.

                                       30
<PAGE>
                  LAST MILE LOGISTIC GROUP, INC. AND SUBSIDIARY
                      Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
                                                                            YEAR ENDED DECEMBER 31,
                                                                          --------------------------
                                                                              2007          2006
                                                                          -----------    -----------
<S>                                                                       <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net loss                                                             $  (631,477)   $(1,283,277)
     Adjustments to reconcile net loss to net cash
     used in operating activities:
         Depreciation                                                          18,190         16,876
         Loss on impairment of goodwill                                            --        698,320
         Bad debt expense                                                      46,432         53,028
         Loss on sale of assets                                                    --          8,015
         Issuance of shares, options and warrants for services rendered         1,351         12,260

     Changes in assets and liabilities:
         Accounts receivable                                                 (104,721)      (110,404)
         Prepaids and other assets                                             13,319         19,112
         Accounts payable and accrued expenses                                352,616        103,447
                                                                          -----------    -----------
             Net Cash Used in Operating Activities                           (304,290)      (482,623)
                                                                          -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of property and equipment                                        (3,501)       (24,095)

                                                                          -----------    -----------
             Net Cash Used in Investing Activities                             (3,501)       (24,095)
                                                                          -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from issuance of common stock                                   175,000             --
     Proceeds from issuance of long-term debt                                  40,875        430,000
     Principal payments on long-term debt                                    (110,666)      (344,136)
     Proceeds from loan payable - related party                               158,000        462,834
     Payments on loan payable - related party                                  (8,000)       (34,960)

                                                                          -----------    -----------
             Net Cash Provided by Financing Activities                        255,209        513,738
                                                                          -----------    -----------

NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS                               (52,582)         7,020

CASH AND EQUIVALENTS, BEGINNING OF PERIOD                                      73,972         66,952
                                                                          -----------    -----------

CASH AND EQUIVALENTS, END OF PERIOD                                       $    21,390    $    73,972
                                                                          ===========    ===========

SUPPLEMENTAL CASH FLOW INFORMATION
     Cash payments for interest                                           $    37,782    $    60,047
     Cash payments for income taxes                                       $        --    $        --

NON-CASH INVESTING AND FINANCING ACTIVITIES
     Issuance of shares, options and warrants for services rendered       $     1,014    $    10,000
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated finncial statements.

                                       31
<PAGE>
                 LAST MILE LOGISTICS GROUP, INC. AND SUBSIDIARY
                 Notes to the Consolidated Financial Statements
                                December 31, 2007

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

         Last Mile Logistics Group, Inc., (the "Company" or "LMLG") was
         incorporated in the state of Florida on April 23, 1998. LMLG is a
         logistics company headquartered in Elkridge, Maryland that is engaged
         in the home delivery of large consumer goods, and the courier delivery
         of small packages.

         Effective October 2, 2006, the Company entered into a Contribution
         Agreement (the "Agreement") with Chesapeake Logistics LLC
         ("Chesapeake"), a limited liability company, whereby the Company issued
         45,000,000 shares, for all the outstanding membership units of
         Chesapeake which numbered 36,000,000 immediately prior to the merger.
         As a result of the Agreement, the members of Chesapeake owned
         approximately 92% of the outstanding post-merger shares of the Company,
         and Chesapeake has been deemed the accounting acquirer (a reverse
         acquisition in which Chesapeake is considered the acquirer for
         accounting purposes). Accordingly, the historical financial information
         presented for the periods prior to October 2, 2006 is that of
         Chesapeake, which was organized as a limited liability company in the
         state of Maryland on October 22, 1997. The results of operations of the
         Company have been included with the results of operations of Chesapeake
         in the accompanying financial statements from the date of acquisition.
         As a result of this reverse acquisition, there were no assets acquired
         or liabilities assumed.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

         This summary of significant accounting policies of the Company is
         presented to assist in understanding the Company's financial
         statements. The financial statements and notes are representations of
         the Company's management who are responsible for their integrity and
         objectivity. These accounting policies conform to accounting principles
         generally accepted in the United States of America and have been
         consistently applied in the preparation of the consolidated financial
         statements. The following policies are considered to be significant:

         a. Basis of Consolidation

         The consolidated financial statements include the operations of the
         Company from October 2, 2006 to December 31, 2007 and the operations of
         its wholly owned subsidiary, Chesapeake Logistics LLC (accounting
         acquirer) from its inception. Significant intercompany balances and
         transactions have been eliminated upon consolidation.

         b. Accounting Method

         The Company recognizes income and expenses based on the accrual method
         of accounting. Accordingly, revenues are recognized when earned and
         expenses are recognized when incurred. The Company has elected a
         December 31 year-end.

         c. Cash and Cash Equivalents

         Cash equivalents are generally comprised of certain highly liquid
         investments with original maturities of less than three months.

                                       32
<PAGE>
                 LAST MILE LOGISTICS GROUP, INC. AND SUBSIDIARY
                 Notes to the Consolidated Financial Statements
                                December 31, 2007

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (continued)

         d. Use of Estimates in the Preparation of Financial Statements

         The preparation of financial statements in conformity with generally
         accepted accounting principles requires management to make estimates
         and assumptions that affect the reported amounts of assets and
         liabilities and disclosure of contingent assets and liabilities at the
         date of the financial statements and the reported amounts of revenues
         and expenses during the reporting period. Actual results could differ
         from those estimates.

         e. Revenue Recognition Policy

         Revenue is recognized upon delivery of goods where the sales price is
         fixed or determinable and collectibility is reasonably assured. Revenue
         is not recognized until persuasive evidence of an arrangement exists.
         Advance customer payments are recorded as deferred revenue until such
         time as they are recognized. Returns or discounts, if any, are netted
         against gross revenues. For the years ended December 31, 2007 and 2006,
         sales are reported net of the allowance for returns and discounts of
         $-0-. Products delivered are not warranted by the Company and may be
         subject only to warranties that may be provided by the product
         manufacturer.

         f. Allowance for Doubtful Accounts

         Accounts receivable are recorded net of the allowance for doubtful
         accounts. The Company generally offers 30-day credit terms on sales to
         its customers and requires no collateral. The Company maintains an
         allowance for doubtful accounts which is determined based on a number
         of factors, including each customer's financial condition, general
         economic trends, age of receivables, and management judgment. As of
         December 31, 2007, allowance for doubtful accounts was $87,467. Bad
         debt expense was $46,432 and $53,028, for the years ended December 31,
         2007 and 2006, respectively.

         g. Property and Equipment

         Property and equipment are stated at cost less accumulated
         depreciation. Depreciation is calculated using the straight-line method
         over the estimated useful lives of the assets. When assets are disposed
         of, the cost and accumulated depreciation (net book value of the
         assets) are eliminated and any resultant gain or loss reflected
         accordingly. Betterments and improvements are capitalized over their
         estimated useful lives whereas repairs and maintenance expenditures on
         the assets are charged to expense as incurred.

                                                       LIFE    DECEMBER 31, 2007
                                                     -------   -----------------
                 Vehicles                            5 Years       $ 61,630
                 Furniture & Fixtures                5 Years       $  4,460
                 Computer Equipment                  3 Years       $ 17,280
                 Software                            3 Years       $ 19,000
                 Leasehold Improvements              5 Years       $ 22,526
                                                                   --------
                 Total Cost                                        $124,896
                 Less - Accumulated Depreciation                   $(93,739)
                                                                   --------

                 Net Property and Equipment                        $ 31,157
                                                                   ========

         Depreciation expense for the years ended December 31, 2007 and 2006 was
         $18,190 and $16,876, respectively.

                                       33
<PAGE>
                 LAST MILE LOGISTICS GROUP, INC. AND SUBSIDIARY
                 Notes to the Consolidated Financial Statements
                                December 31, 2007

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (continued)

         h. Recent Accounting Pronouncements

         In February 2007, the Financial Accounting Standards Board ("FASB")
         issued FASB Statement No. 159, "The Fair Value Option for Financial
         Assets and Financial Liabilities -- Including an Amendment of FASB
         Statement No. 115, Accounting for Certain Investments in Debt and
         Equity Securities" ("SFAS No. 159"). SFAS No. 159 permits an entity to
         choose to measure many financial instruments and certain items at fair
         value. The objective of this standard is to improve financial reporting
         by providing entities with the opportunity to mitigate volatility in
         reporting earnings caused by measuring related assets and liabilities
         differently without having to apply complex hedge accounting
         provisions. SFAS No. 159 permits all entities to choose to measure
         eligible items at fair value at specified election dates. Entities will
         report unrealized gains and losses on items for which the fair value
         option has been elected in earnings at each subsequent reporting date.
         The fair value option: (a) may be applied instrument by instrument,
         with a few exceptions, such as investments accounted for by the equity
         method; (b) is irrevocable (unless a new election date occurs); and (c)
         is applied only to entire instruments and not to portions of
         instruments. SFAS No. 159 is effective as of the beginning of an
         entity's first fiscal year that begins after November 15, 2007. Early
         adoption is permitted. We are currently evaluating the impact that the
         adoption of SFAS No. 159 will have on our consolidated financial
         statements.

         In December 2007, the FASB issued SFAS No. 141(R), "Business
         Combinations" ("SFAS 141(R)"). SFAS 141(R) replaces SFAS No. 141,
         "Business Combinations", but retains the requirement that the purchase
         method of accounting for acquisitions be used for all business
         combinations. SFAS 141(R) expands on the disclosures previously
         required by SFAS 141, better defines the acquirer and the acquisition
         date in a business combination, and establishes principles for
         recognizing and measuring the assets acquired (including goodwill), the
         liabilities assumed and any non-controlling interests in the acquired
         business. SFAS 141(R) also requires an acquirer to record an adjustment
         to income tax expense for changes in valuation allowances or uncertain
         tax positions related to acquired businesses. SFAS 141(R) is effective
         for all business combinations with an acquisition date in the first
         annual period following December 15, 2008; early adoption is not
         permitted. The impact of SFAS 141(R) will have on our consolidated
         financial statements will depend on the nature and size of acquisitions
         we complete after we adopt SFAS 141(R).

         In December 2007, the FASB issued SFAS No. 160, "Noncontrolling
         Interests in Consolidated Financial Statements-an amendment of ARB No.
         51" (SFAS 160). SFAS 160 requires that non-controlling (or minority)
         interests in subsidiaries be reported in the equity section of the
         company's balance sheet, rather than in a mezzanine section of the
         balance sheet between liabilities and equity. SFAS 160 also changes the
         manner in which the net income of the subsidiary is reported and
         disclosed in the controlling company's income statement. SFAS 160 also
         establishes guidelines for accounting for changes in ownership
         percentages and for deconsolidation. SFAS 160 is effective for
         financial statements for fiscal years beginning on or after December 1,
         2008 and interim periods within those years; early adoption is not
         permitted. The adoption of SFAS 160 is not expected to have a material
         impact on our financial position, results of operations or cash flows.

                                       34
<PAGE>
                 LAST MILE LOGISTICS GROUP, INC. AND SUBSIDIARY
                 Notes to the Consolidated Financial Statements
                                December 31, 2007

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (continued)

         i.  Income Taxes

         The Company accounts for income taxes in accordance with Statement of
         Financial Accounting Standards Board (SFAS) No. 109, "Accounting for
         Income Taxes." Under this method, deferred income taxes are determined
         based on the difference between the financial statement and tax bases
         of assets and liabilities using enacted tax rates in effect for the
         year in which differences are expected to reverse. In accordance with
         the provisions of SFAS No. 109, a valuation allowance would be
         established to reduce deferred tax assets if it were more likely than
         not that all or some portion of such deferred tax assets would not be
         realized.

         At December 31, 2007, the Company had net operating loss carryforwards
         of $1,060,687, that may be offset against future taxable income through
         2027. No tax benefits have been reported in the financial statements
         because the potential tax benefits of the net operating loss
         carryforwards are offset by a valuation allowance of the same amount.

         Due to the change in ownership provisions of the Tax Reform Act of
         1986, net operating loss carryforwards for Federal income tax reporting
         purposes are subject to annual limitations. Should a change in
         ownership occur, net operating loss carryforwards may be limited as to
         its future use by the Company.

NOTE 3 - GOODWILL

         Goodwill represents the excess of cost over the fair value of net
         assets acquired through acquisitions. In September 2000, Chesapeake
         purchased the assets of U.S. Couriers, and this excess of cost over net
         assets acquired amounted to $698,320. In accordance with the provisions
         of Statement of Financial Accounting Standards No. 142, management of
         the Company has determined that an impairment loss of the full goodwill
         amount of $698,320 be recorded for the year ended December 31, 2006.
         This estimate of goodwill impairment is based on the Company's negative
         cash flows and recurring operating losses, and associated substantial
         doubt about the Company's ability to continue as a going concern.

NOTE 4 - RELATED PARTY TRANSACTIONS

         At December 31, 2007, the Company had a related party note payable of
         $612,834, which represents advances made by officers of the Company,
         and evidenced by a promissory note signed on December 5, 2006, with
         interest effective January 1, 2006 and based on the prime rate. The
         principal and interest on this note are payable in full by the Company
         on January 2, 2009, with accrued interest as of December 31, 2007
         amounting to $51,537. From May 10, 2007 to November 1, 2007, the
         Company received $158,000 from officers of the Company, adding to the
         promissory note payable signed on December 5, 2006, with interest based
         on the prime rate.

         The Company made payments for officer compensation of $175,000 and
         $56,970 for years ended December 31, 2007 and December 31, 2006,
         respectively, and owed an additional $156,731 for officer compensation
         as of December 31, 2007.

                                       35
<PAGE>
                 LAST MILE LOGISTICS GROUP, INC. AND SUBSIDIARY
                 Notes to the Consolidated Financial Statements
                                December 31, 2007

NOTE 4 - RELATED PARTY TRANSACTIONS (continued)

         On October 2, 2006, the Company entered into five year employment
         agreements with its two executive officers, Regina R. Flood and Brian
         P. Flood. The agreements were amended effective October 1, 2007
         modifying the term and salary of the original agreements. The term of
         the agreements is now six years expiring on September 30, 2012.
         Pursuant to the employment agreement with Regina R. Flood, Ms. Flood
         serves as Chairman of the Board and Chief Executive Officer of the
         Company at an annual salary of $175,000 per annum and amended to
         $75,000 per annum. Her salary is adjusted annually in accordance with
         changes in the cost of living index. Ms. Flood is entitled to receive
         performance bonuses as may from time to time be determined by the Board
         of Directors and certain fringe benefits. Ms. Flood is subject to
         non-competition and confidentiality requirements. Pursuant to the
         employment agreement with Brian P. Flood, Mr. Flood serves as
         President, Chief Operating Officer, Chief Financial Officer, Chief
         Accounting Officer and Secretary of the Company at an annual salary of
         $125,000 per annum and amended to $75,000 per annum. His salary is
         adjusted annually in accordance with changes in the cost of living
         index. Mr. Flood is entitled to receive performance bonuses as may from
         time to time be determined by the Board of Directors and certain fringe
         benefits. Mr. Flood is subject to non-competition and confidentiality
         requirements.

         On October 2, 2006, the Company entered into stock option agreements
         with its two executive officers, Regina R. Flood and Brian P. Flood.
         Options were granted to purchase 1,000,000 shares of common stock to
         each of Regina R. Flood and Brian P. Flood. The options were granted at
         an exercise price of $0.10 per share. For each person, 250,000 options
         vest on October 1, 2007, an additional 250,000 options vest on October
         1, 2008, an additional 250,000 options vest on October 1, 2009 and an
         additional 250,000 options vest on October 1, 2010. Vested options may
         be exercised at any time through September 30, 2016.

NOTE 5 - LONG-TERM DEBT

         Long-term debt consists of the following:

                                                      DECEMBER 31, 2007
                                                      -----------------

         Note payable to Wachovia SBA Lending, Inc. (a)   $ 276,659

         Credit line payable to M&T Bank (b)                180,000

         Note payable to James Rose (c)                      75,000

         Note payable to Charles Devries (d)                100,000

         Vehicle loans with Ford Credit (e)                  10,971

         Credit Line with Zions Bank (f)
                                                             40,875

         Credit line with American Express (g)               13,479
                                                          ---------

         Total debt                                         696,984

         Less: current portion                             (466,632)
                                                          ---------

         Long-Term Debt                                   $ 230,352
                                                          =========

                                       36
<PAGE>
                 LAST MILE LOGISTICS GROUP, INC. AND SUBSIDIARY
                 Notes to the Consolidated Financial Statements
                                December 31, 2007

NOTE 5 - LONG-TERM DEBT (continued)

         (a) On September 29, 2000, the Company entered into a ten-year $700,000
             note agreement with Wachovia SBA Lending, Inc. (f/k/a The Money
             Store Investment Corporation), guaranteed by the U.S. Small
             Business Administration. The interest rate is adjusted quarterly,
             at a rate 1.5 percentage points above the prime rate, as published
             in the Wall Street Journal.

         (b) On November 29, 2005, the Company entered into a flexible line of
             credit note for $180,000 with M&T Bank. This note agreement charges
             interest at a rate 1.5 percentage points above the highest prime
             rate published by the Wall Street Journal. This debt facility is
             secured by the Company's accounts receivable, along with personal
             guaranties of the principal management of the Company. While the
             note requires monthly interest payments only, M&T Bank may, upon
             written notice to borrower, convert this debt to a three-year term
             obligation.

         (c) On October 2, 2006, the Company entered into a two-year promissory
             note with James Rose in the amount of $125,000, with interest
             payable at a rate of 6% per annum.

         (d) On September 1, 2006, the Company entered into a six-month note
             agreement with Charles Devries in the amount of $100,000, with
             interest payable monthly at a rate of 9% per annum. On October 1,
             2006, this promissory note was cancelled and a new promissory note
             in the principal amount of $100,000, and warrants to purchase
             1,000,000 shares of common stock, were issued by Last Mile
             Logistics Group, Inc. These warrants are exercisable through June
             30, 2007 at an exercise price of $0.10 per share. The fair value of
             the warrants, amounting to $1,000, have been accounted for as debt
             issuance costs and are being amortized to interest expense over the
             term of the note. Adjusted for the effects of these warrants, the
             effective interest rate on this note is 10.2%. On June 18, 2007,
             the Company entered into a Second Modification Agreement with
             Charles H. DeVries pursuant to which a previously issued Promissory
             Note and Warrants were canceled, and a Promissory Note in the
             principal amount of $100,000 and warrants to purchase 1,000,000
             shares of our common stock were issued to Mr. DeVries. The
             promissory note bears interest at 9% per annum, is unsecured and is
             finally due and payable on June 30, 2008. The warrants are
             exercisable through June 30, 2008 at an exercise price of $0.10 per
             share. The effect of this Second Modification Agreement is to
             extend the due date of the original promissory note and the
             exercise period of the original warrants, and has no material
             effect on the Company's financial statements.

         (e) The Company purchased two vehicles in 2003, with the entire total
             purchase price of $58,587 payable under an agreement with Ford
             Credit, at no interest, for a 5-year period.

         (f) On November 17, 2007, the Company entered into an unsecured line of
             credit with Zions Bank for $50,000, with a variable interest rate
             of 2.0% over the prime rate published by the Wall Street Journal.

         (g) On March 17, 2005, the Company entered into an unsecured line of
             credit with American Express for $20,000, with a variable interest
             rate of 1.99% over the prime rate published by the Wall Street
             Journal.

                                       37
<PAGE>
                 LAST MILE LOGISTICS GROUP, INC. AND SUBSIDIARY
                 Notes to the Consolidated Financial Statements
                                December 31, 2007

NOTE 6 - EQUITY TRANSACTIONS

         As of January 2, 2006, Chesapeake Logistics, LLC issued 1,080,000 units
         of membership (converted to 1,350,000 shares of common stock in the
         recapitalization) for legal services rendered valued at $10,000.

         On September 22, 2006, the Company amended its Articles of
         Incorporation to assign a par value of $0.0001 to each of its classes
         of shares as follows: Common stock 100,000,000 shares authorized and
         preferred stock 5,000,000 shares authorized. All references to shares
         in the financial statements have been retroactively restated to reflect
         the effects of this change in capital structure.

         On October 2, 2006, the Company issued 45,000,000 shares of common
         stock in exchange for all units of membership in Chesapeake Logistics
         LLC which numbered 36,000,000. As a result of this transaction,
         Chesapeake Logistics LLC has become a wholly-owned subsidiary of the
         Company. This business combination was accounted for as a reverse
         acquisition in accordance with FAS 142, and treated as a
         recapitalization for financial reporting purposes, with Chesapeake
         Logistics treated as the accounting acquirer.

         On March 14, 2007, the Company sold 1,000,000 shares of common stock
         through a private placement at $0.15 per share for $150,000.

         On March 22, 2007, the Company sold 166,667 shares of common stock
         through a private placement at $0.15 per share for $25,000.

NOTE 7 - BASIC NET LOSS PER SHARE OF COMMON STOCK

         In accordance with Financial Accounting Standards No. 128, "Earnings
         per Share," basic net loss per common share is based on the weighted
         average number of shares outstanding during the periods presented.
         Diluted earnings per share is computed using weighted average number of
         common shares plus dilutive common share equivalents outstanding during
         the period. Dilutive instruments have not been included and calculated
         for the year end computations as their effect is antidilutive for the
         periods presented.

         As of December 31, 2007, warrants exercisable into 3,000,000 shares of
         common stock were outstanding, which could potentially dilute net loss
         or income per share in the future.
<TABLE>
<CAPTION>
                                                                     DECEMBER 31,
                                                             ----------------------------
                                                                 2007             2006
                                                             ------------    ------------
<S>                                                          <C>             <C>
         Net loss (numerator)                                $   (631,477)   $ (1,283,277)

         Weighted average shares outstanding (denominator)     49,894,219      45,975,452

         Loss per share amount                               $      (0.01)   $      (0.03)
</TABLE>

                                       38
<PAGE>
                 LAST MILE LOGISTICS GROUP, INC. AND SUBSIDIARY
                 Notes to the Consolidated Financial Statements
                                December 31, 2007

NOTE 8 - STOCK OPTIONS AND WARRANTS

         The Company has adopted FASB Statement 123(R), "Share-Based Payments"
         ("SFAS No. 123R") to account for its stock options and warrants. The
         Company estimates the fair value of each stock award at the grant date
         by using the Black-Scholes option pricing model. The assumptions used
         to calculate the fair value of options and warrants granted are
         evaluated and revised, as necessary, to reflect market conditions and
         our experience. Compensation expense is recognized only for those
         options expected to vest, with forfeitures estimated at the date of
         grant based on our historical experience and future expectations. The
         fair value of the employee stock options and stock warrants granted
         during 2007 was calculated using the following assumptions: dividend
         yield of zero percent for all years; expected volatility of 21.0
         percent; risk-free interest rate of 5.25 percent; and, expected life of
         5.0 years.

         Employee Stock Options
         ----------------------

         The following tables summarize the information regarding employee stock
         options at December 31, 2007:
<TABLE>
<CAPTION>
                                                                            EMPLOYEE
                                                                          STOCK OPTIONS
                                                                            ---------
<S>                                                                         <C>
         Outstanding December 31, 2006                                      2,000,000

         Granted                                                            1,000,000

         Cancelled                                                                 --

         Exercised                                                                 --
                                                                            ---------

         Outstanding December 31, 2007                                      3,000,000
                                                                            =========

         Weighted average exercise price of options outstanding at
         December 31, 2007                                                  $    0.10
                                                                            =========
</TABLE>

<TABLE>
<CAPTION>
                        OUTSTANDING OPTIONS                                        EXERCISABLE
---------------------------------------------------------------------    -------------------------------
                                         WEIGHTED
                                         AVERAGE
                        NUMBER          REMAINING         WEIGHTED           NUMBER          WEIGHTED
                    OUTSTANDING AT     CONTRACTUAL         AVERAGE       EXERCISABLE AT       AVERAGE
EXERCISE PRICES        12/31/07         LIFE (YRS)     EXERCISE PRICE       12/31/07      EXERCISE PRICE
---------------     --------------     -----------     --------------    --------------   --------------
<S>                   <C>                  <C>             <C>              <C>                <C>
     $0.10            3,000,000            8.92            $0.10            500,000            $0.10
</TABLE>

                                       39
<PAGE>
                 LAST MILE LOGISTICS GROUP, INC. AND SUBSIDIARY
                 Notes to the Consolidated Financial Statements
                                December 31, 2007

NOTE 8 - STOCK OPTIONS AND WARRANTS (continued)

         During the years ended December 31, 2007 and December 31, 2006, the
         Company recognized share-based compensation expense of $1,351 and $260,
         respectively as a component of operating expenses, for the stock
         options issued, of which $916 and $260, respectively, related to
         officers of the Company. As of December 31, 2007 and December 31, 2006,
         there was $1,389 and $1,740, respectively of total unrecognized
         compensation costs related to non-vested stock options, which is
         expected to be recorded to compensation expense through 2011, based on
         the graded vesting attribution method as follows:

         YEAR               COMPENSATION EXPENSE
         ----               --------------------
         2008                       $792
         2009                       $417
         2010                       $170
         2011                       $ 10

         Stock Warrants
         --------------

         The following tables summarize the information regarding stock warrants
         at December 31, 2006:

                                                       STOCK WARRANTS
                                                       --------------

     Outstanding December 31, 2006                        2,000,000

     Granted                                                     --

     Cancelled                                                   --

     Exercised                                                   --
                                                          ---------

     Outstanding December 31, 2007                        2,000,000
                                                          =========

Weighted average exercise price of warrants outstanding
at December 31, 2007                                          $0.10
                                                          =========
<TABLE>
<CAPTION>
                        OUTSTANDING OPTIONS                                        EXERCISABLE
---------------------------------------------------------------------    -------------------------------
                                         WEIGHTED
                                         AVERAGE
                        NUMBER          REMAINING         WEIGHTED           NUMBER          WEIGHTED
                    OUTSTANDING AT     CONTRACTUAL         AVERAGE       EXERCISABLE AT       AVERAGE
EXERCISE PRICES        12/31/07         LIFE (YRS)     EXERCISE PRICE       12/31/07      EXERCISE PRICE
---------------     --------------     -----------     --------------    --------------   --------------
<S>                   <C>                  <C>             <C>              <C>                <C>
     $0.10            2,000,000            2.63            $0.10            2,000,000          $0.10
</TABLE>

                                       40
<PAGE>
                 LAST MILE LOGISTICS GROUP, INC. AND SUBSIDIARY
                 Notes to the Consolidated Financial Statements
                                December 31, 2007

NOTE 8 - STOCK OPTIONS AND WARRANTS (continued)

         Warrants issued with debt (see Note 5(d)) and expiring on June 30, 2008
         generated unamortized debt discount of $1,000, of which $600 and $400
         was recorded to interest expense in 2007 and 2006, respectively using
         the effective interest method, in accordance with Accounting Principles
         Board Opinion No. 14.

NOTE 9 - FINANCIAL INSTRUMENTS

         Statement of Financial Accounting Standards No. 107 (SFAS 107),
         "Disclosures about Fair Value of Financial Instruments" requires
         disclosure of the fair value of financial instruments held by the
         Company. SFAS 107 defines the fair value of a financial instrument as
         the amount at which the instrument could be exchanged in a current
         transaction between willing parties. The following methods and
         assumptions were used to estimate fair value:

         The carrying amount of cash equivalents, accounts receivable, accounts
         payable and the current portion of long-term debt approximate fair
         value due to their short-term nature.

         The fair value of the Company's long-term debt and notes payable to
         related parties approximates the carrying amount based on borrowing
         rates currently available for bank loans with similar terms and
         maturities.

NOTE 10 - COMMITMENTS AND CONTINGENCIES

         Operating Lease - Facility
         --------------------------

         The Company is obligated under a seven-year agreement for the lease of
         its office and warehouse facility. The current monthly lease obligation
         is approximately $6,708, with an increase to approximately $10,364
         effective September 2007, based on a contract escalation clause. Rent
         expense is recognized on a straight-line basis in accordance with
         Statement of Financial Accounting Standards No. 13. The annual
         estimated lease obligations in future years are as follows:

              -------------------------- --------------------------
                                           ANNUAL MINIMUM LEASE
                        YEAR                     PAYMENTS
              -------------------------- --------------------------
                        2008                     $125,612
              -------------------------- --------------------------
                        2009                     $129,384
              -------------------------- --------------------------
                        2010                     $133,268
              -------------------------- --------------------------
                        2011                     $137,260
              -------------------------- --------------------------
                        2012                     $141,383
              -------------------------- --------------------------
                     Thereafter                  $ 96,121
              -------------------------- --------------------------

         Rent expense for the years ended December 31, 2007 and December 31,
         2006 was $133,511 and $115,755, respectively.

                                       41
<PAGE>
                 LAST MILE LOGISTICS GROUP, INC. AND SUBSIDIARY
                 Notes to the Consolidated Financial Statements
                                December 31, 2007

NOTE 10 - COMMITMENTS AND CONTINGENCIES (continued)

          Operating Lease - Vehicles
          --------------------------

          The Company is obligated under a lease and service agreement with
          Ryder Truck Rental, Inc., for the lease, insurance and maintenance of
          five trucks used in the operation. The current monthly fixed
          obligation for the lease and insurance is approximately $11,320,
          subject to annual escalation based on the Consumer Price Index.

          The annual estimated lease obligations in future years are as follows:

              -------------------------- --------------------------
                                           ANNUAL MINIMUM LEASE
                        YEAR                     PAYMENTS
              -------------------------- --------------------------
                        2008                     $107,034
              -------------------------- --------------------------
                        2009                     $ 78,753
              -------------------------- --------------------------
                        2010                     $ 72,235
              -------------------------- --------------------------
                        2011                     $ 48,105
              -------------------------- --------------------------
                        2012                     $ 33,480
              -------------------------- --------------------------

NOTE 11 - CONCENTRATIONS OF RISK

          Major Customers
          ---------------

          For the year ended December 31, 2007, two customers generated revenues
          in excess of 10% of the Company's total consolidated revenues.
          Revenues from these customers totaled $490,482 and $242,044, or 25.3%
          and 12.5%, respectively. At December 31, 2007, accounts receivable for
          these two customers totaled $152,773 and $117,380, or 32.3% and 24.8%,
          respectively, of total gross receivables of $474,031.

NOTE 12 - SUBSEQUENT EVENTS

          On January 14, 2008, the Company issued 200,000 restricted common
          shares as part of an Investor Relations Marketing agreement entered
          into on August 1, 2007. For the year ended December 31, 2007
          consulting fees have been accrued in the amount of $30,000 to reflect
          the fair value of the shares issued.

NOTE 13 - GOING CONCERN CONSIDERATIONS

          The accompanying financial statements have been prepared using
          generally accepted accounting principles applicable to a going concern
          which contemplates the realization of assets and liquidation of
          liabilities in the normal course of business. As reported in the
          financial statements, the Company has a working capital deficit,
          negative cash flows from operations and recurring operating losses.
          These factors combined, raise substantial doubt about the Company's
          ability to continue as a going concern. Management's plans to address
          and alleviate these concerns are as follows:

                                       42
<PAGE>
                 LAST MILE LOGISTICS GROUP, INC. AND SUBSIDIARY
                 Notes to the Consolidated Financial Statements
                                December 31, 2007

NOTE 13 - GOING CONCERN CONSIDERATIONS (continued)

          The Company's current negative cash flow is largely due to its
          initiation of a plan to rapidly grow the business by adding personnel,
          committing to a larger facility to handle more business, costs of new
          software and marketing, and incurring consulting, legal and accounting
          costs associated with the Company's initiative to become registered
          under the Securities Exchange Act of 1934. As part of this plan,
          management is exploring options to raise additional operating capital
          through debt and/or equity financing. No assurance can be given that
          funds will be available, or, if available, that it will be on terms
          deemed satisfactory to management.

          The ability of the Company to continue as a going concern is dependent
          upon its ability to successfully accomplish the plans described in the
          preceding paragraph and eventually attain profitable operations. The
          accompanying financial statements do not include any adjustments
          relating to the recoverability and classification of asset carrying
          amounts or the amount and classification of liabilities that might
          result from the outcome of these uncertainties.

                                       43
<PAGE>

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

         There have been no changes in accountants. There have been no
disagreements with our accountants on accounting and financial disclosure.

ITEM 8A(T). CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

         An evaluation was carried out under the supervision and with the
participation of the Company's management, including its Chief Executive Officer
and its Chief Financial Officer, of the effectiveness of the Company's
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934) as of the end of the period covered
by this report. Based upon this review, management concluded that our disclosure
controls and procedures are effective.

         There have been no significant changes in internal control over
financial reporting (as defined in Rules 13a-15 and 15d-15 under the Securities
Exchange Act of 1934) that occurred during the fiscal period covered by this
report that have materially affected, or are reasonably likely to materially
affect, the Company's internal control over financial reporting.

MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

         Our management is responsible for establishing and maintaining adequate
internal control over financial reporting (as defined in Rules 13a-15(f) and
15d-5(f) under the Securities Exchange Act of 1934). Our management assessed the
effectiveness of our internal control over financial reporting as of December
31, 2007. In making this assessment, our management used the criteria set forth
by the Committee of Sponsoring Organizations of the Treadway Commission in
Internal Control-Integrated Framework. Our management has concluded that, as of
December 31, 2007, our internal control over financial reporting is effective
based on these criteria.

         This annual report does not include an attestation report of the
Company's registered public accounting firm regarding internal control over
financial reporting. Management's report was not subject to attestation by the
Company's independent registered public accounting firm pursuant to temporary
rules of the Securities and Exchange Commission that permit the Company to
provide only management's report in this annual report.

LIMITATIONS OF DISCLOSURE CONTROLS AND PROCEDURES

         Our management, including our Chief Executive Officer and our Chief
Financial Officer, does not expect that our disclosure controls or internal
control over financial reporting will prevent all errors or all instances of
fraud. A control system, no matter how well designed and operated, can provide
only reasonable, not absolute, assurance that the control system's


                                       44
<PAGE>

objectives will be met. Further, the design of a control system must reflect the
fact that there are resource constraints, and the benefits of controls must be
considered relative to their costs. Because of the inherent limitations in all
control systems, no evaluation of controls can provide absolute assurance that
all control issues and instances of fraud, if any, within our Company have been
detected. These inherent limitations include the realities that judgments in
decision-making can be faulty and that breakdowns can occur because of simple
error or mistake. Controls can also be circumvented by the individual acts of
some persons, by collusion of two or more people, or by management override of
the controls. The design of any system of controls is based in part upon certain
assumptions about the likelihood of future events, and any design may not
succeed in achieving its stated goals under all potential future conditions.
Over time, controls may become inadequate because of changes in conditions or
deterioration in the degree of compliance with policies or procedures. Because
of the inherent limitation of a cost-effective control system, misstatements due
to error or fraud may occur and not be detected.

ITEM 8B. OTHER INFORMATION.

         Not applicable.

                                    PART III

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

DIRECTORS AND EXECUTIVE OFFICERS

         The names, ages and positions of all of our current directors and
executive officers are listed below, followed by a summary of their respective
business experience during the past five years.

NAME                       AGE            POSITION
----                       ---            --------
Regina R. Flood            49             Chairman of the Board and
                                          Chief Executive Officer

Brian P. Flood             50             President, Chief Operating Officer,
                                          Chief Financial Officer,
                                          Chief Accounting Officer
                                          and Secretary

         Regina R. Flood is one of the founders of Chesapeake Logistics. She has
served as Chairman of the Board and Chief Executive Officer of Chesapeake
Logistics since its inception in November 1997. From 1999 to 2000, she also
served as President of Oxford Consulting Group, LLC. From 1988 to 1999, she held
various positions with Price Waterhouse. Ms. Flood received a Bachelor of
Science degree from the University of Notre Dame and a Master of Business
Administration degree from Loyola University of Chicago.


                                       45
<PAGE>

         Brian P. Flood is one of the founders of Chesapeake Logistics. He has
served as President, Chief Operating Officer and Chief Financial Officer of
Chesapeake Logistics since its inception in November 1997. From 1992 to 1997, he
served as Senior Vice President and Chief Financial Officer of TNT Logistics
Corporation. From 1987 to 1992, he held various positions with Ryder System,
Inc. Mr. Flood received a Bachelor of Business Administration degree from the
University of Notre Dame and a Master of Business Administration degree from the
University of Chicago.

TERMS OF OFFICE

         The Company's Amended and Restated Articles of Incorporation provide
for three classes of directors, and further provide that directors elected to
succeed those directors whose terms expire will be elected for a term of office
to expire at the third succeeding annual meeting of shareholders after their
election. Subject to the rights of the holders of any series of Preferred Stock
then outstanding, newly created directorships resulting from any increase in the
authorized number of directors or any vacancies in the Board of Directors
resulting from death, resignation, retirement, disqualification, removal from
office or other cause will be filled by a majority vote of the directors then in
office, and the directors so chosen will hold office for a term expiring at the
annual meeting of shareholders at which the term of the class to which they have
been elected expires. No decrease in the number of directors constituting the
Board of Directors will shorten the term of any incumbent director. All
directors hold office, subject to such staggered board provisions, until the
next annual meeting of shareholders of the Company and until their successors
are elected and qualified.

         Officers are normally appointed annually by the Board of Directors at a
meeting of the directors immediately following the annual meeting of
shareholders. Officers hold office until the first meeting of directors
following the next annual meeting of shareholders and until their successors are
elected and qualified, subject to earlier removal by the Board of Directors.

FAMILY RELATIONSHIPS

         Regina R. Flood and Brian P. Flood are married. There are no other
family relationships among the directors or executive officers of the Company.

INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

         None of our officers, directors, promoters or control persons has been
involved in the past five years in any of the following:

         (1) any bankruptcy petition filed by or against any business of which
such person was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that time;

         (2) any conviction in a criminal proceedings or being subject to a
pending criminal proceeding (excluding traffic violations and other minor
offenses);

                                       46
<PAGE>

         (3) Being subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, or any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise limiting
his involvement in any type of business, securities or banking activities; or

         (4) Being found by a court of competent jurisdiction (in a civil
action), the SEC or the U.S. Commodity Futures Trading Commission to have
violated a federal or state securities laws or commodities law, and the judgment
has not been reversed, suspended, or vacated.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Section 16(a) of the Securities Exchange Act of 1934 (the "1934 Act")
requires the Company's directors and executive officers, and persons who own
more than ten percent of the Company's shares of common stock, to file with the
SEC initial reports of ownership and reports of changes in ownership the
Company's shares of common stock. During 2006, none of our directors, officers
or more than ten percent shareholders failed to file or filed on an untimely
basis any filings required under Section 16(a) of the 1934 Act.

CODE OF ETHICS

         In February 2007, the Company adopted a written code of ethics that
applies to the Company's principal executive officer, principal financial
officer, principal accounting officer and controller and any persons performing
similar functions. A copy of our Code of Ethics is attached as Exhibit 14.0 to
our Annual Report on Form 10-KSB filed on April 5, 2007. The Company will
provide a copy of its code of ethics to any person without charge upon written
request addressed to Last Mile Logistics Group, Inc., 6675 Amberton Drive,
Elkridge, Maryland 21075, Attention: Chief Financial Officer.

NO COMMITTEES

         Our Board of Directors does not, at present, have an audit,
compensation or nominating committee, or any committee or committees performing
similar functions. All of these functions are, at present, performed by the
Board of Directors as a whole.

                                       47
<PAGE>

ITEM 10. EXECUTIVE COMPENSATION

MANAGEMENT COMPENSATION

         The following table set forth certain information as to the
compensation paid to our two executive officers for 2007 and 2006:

                           SUMMARY COMPENSATION TABLE

NAME AND                               CASH        OPTION
PRINCIPAL POSITION         YEAR       SALARY       AWARDS         TOTAL
------------------         ----       -------      --------      -------
Regina R. Flood            2007       $76,442      $458 (1)      $76,900
Chief Executive
Officer                    2006       $76,790      $130 (1)      $76,920

Brian P. Flood             2007       $98,558      $458 (1)      $99,016
President, Chief
Operating Officer          2006       $55,180      $130 (1)      $55,310
and Chief Financial
Officer

James A. Rose, II          2007             0         0                0
President (2)
                           2006             0    $1,000           $1,000
----------
(1)  For a description of the valuation of option awards, please see Note 8 to
     the Notes to the Financial Statements.

(2)  Mr. Rose served as the President of LMLG from June 30, 2005 until October
     2, 2006.

EMPLOYMENT AGREEMENTS

         On October 2, 2006, we entered into five year employment agreements
with our two executive officers, Regina R. Flood and Brian P. Flood that were
modified effective October 1, 2007. Pursuant to our employment agreement with
Regina R. Flood, Ms. Flood serves as Chairman of the Board and Chief Executive
Officer of the Company at an annual salary of $75,000 per annum. Her salary is
adjusted annually in accordance with changes in the cost of living index. Ms.
Flood is entitled to receive performance bonuses as may from time to time be
determined by the Board of Directors and certain fringe benefits. Ms. Flood is
subject to non-competition and confidentiality requirements.

                                       48
<PAGE>

         Pursuant to our employment agreement with Brian P. Flood, Mr. Flood
serves as President and Chief Operating Officer, Chief Financial Officer, Chief
Accounting Officer and Secretary of the Company at an annual salary of $75,000
per annum. His salary is adjusted annually in accordance with changes in the
cost of living index. Mr. Flood is entitled to receive performance bonuses as
may from time to time be determined by the Board of Directors and certain fringe
benefits. Mr. Flood is subject to non-competition and confidentiality
requirements.

         The following table sets forth certain information as to outstanding
stock options as of December 31, 2007:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
                                   OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2007
------------------------ ------------------------------ --------------------- ----------------- ----------------------
         NAME                NUMBER OF SECURITIES            NUMBER OF        OPTION EXERCISE     OPTION EXPIRATION
                            UNDERLYING UNEXERCISED           SECURITIES            PRICE                DATE
                                   OPTIONS/                  UNDERLYING
                                  EXERCISABLE               UNEXERCISED
                                    OPTIONS/
                                  UNEXERCISABLE
------------------------ ------------------------------ --------------------- ----------------- ----------------------
<S>                            <C>                       <C>                       <C>             <C>
    Regina R. Flood            1,000,000/250,000         1,000,000/750,000         $0.10           Sept. 30, 2016
------------------------ ------------------------------ --------------------- ----------------- ----------------------

------------------------ ------------------------------ --------------------- ----------------- ----------------------
    Brian P. Flood             1,000,000/250,000         1,000,000/750,000         $0.10           Sept. 30, 2016
------------------------ ------------------------------ --------------------- ----------------- ----------------------
</TABLE>

STOCK OPTIONS

         On October 2, 2006, in order to induce them to enter into their
respective employment agreements with us, we granted options to purchase
1,000,000 shares of our common stock to each of Regina R. Flood and Brian P.
Flood. The options were granted at an exercise price of $0.10 per share. For
each person, 250,000 options vest on October 1, 2007, an additional 250,000
options vest on October 1, 2008, an additional 250,000 options vest on October
1, 2009 and an additional 250,000 options vest on October 1, 2010. Vested
options may be exercised at any time through September 30, 2016.

         On February 19, 2007, in order to induce an individual to become an
employee of LMLG, LMLG granted options to purchase 1,000,000 shares of its
common stock. The options were granted at an exercise price of $0.10 per share.
250,000 options vest on February 18, 2008, an additional 250,000 options vest on
February 18, 2009, an additional 250,000 options vest on February 18, 2010, and
an additional 250,000 options vest on February 18, 2011. Vested options may be
exercised at any time through February 18, 2017.

COMPENSATION OF DIRECTORS

         We have not yet implemented any standard arrangements for the
compensation of directors of the Company. We anticipate that we will reimburse
non-officer directors for their out-of-pocket expenses necessary to attend
meetings of the Board of Directors.

                                       49
<PAGE>

CHANGE IN CONTROL OF THE COMPANY

         There are no provisions in our Amended and Restated Articles of
Incorporation or our Amended and Restated Bylaws that would delay, defer, or
prevent a change in control, except to the extent as may be influenced by the
staggered board of directors provisions in our Amended and Restated Articles of
Incorporation and the ability of the Board of Directors to issue shares of
preferred stock with such designations, rights and preferences as the Board of
Directors may, in its sole discretion, determine. We have no current plans to
issue any of such preferred stock.

         If, subsequent to a change in control of the Company which is not
approved by the Company's Board of Directors, the employment of Regina R. Flood
or Brian P. Flood is terminated for any reason other than death, disability,
cause or good reason, then we are obligated to pay to either or both of Mrs.
Flood or Mr. Flood, as the case may be, an amount in cash equal to the sum of
that person's then current salary and most recent bonus, multiplied by three.

         Upon a change in control of the Company which is not approved by the
Company's Board of Directors, all outstanding options to purchase our shares of
common stock which have not previously vested will vest and become immediately
exercisable. As a result, upon a change in control of the Company which is not
approved by the Company's Board of Directors, up to 3,000,000 options to
purchase shares could vest and become exercisable.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS.

EQUITY COMPENSATION PLANS

         As of December 31, 2007, the following securities were authorized for
issuance under equity compensation plans:
<TABLE>
<CAPTION>
                      NUMBER OF SHARES TO BE    EXERCISE PRICE    NUMBER OF SECURITIES
PLAN                   ISSUED UPON EXERCISE     OF OUTSTANDING    REMAINING AVAILABLE
CATEGORY              OF OUTSTANDING OPTIONS       OPTIONS        FOR FUTURE ISSUANCE
--------              ----------------------    --------------    --------------------
<S>                        <C>                        <C>                   <C>
Equity Compensation
Plans Approved by
the Shareholders                   0                     0                  0

Equity Compensation
Plans Not Approved by
the Shareholders           3,000,000                  0.10                  0
</TABLE>

                                       50
<PAGE>

STOCK OPTIONS

         On October 2, 2006, in order to induce them to enter into their
respective employment agreements, we granted options to purchase 1,000,000
shares of our common stock to each of Regina R. Flood and Brian P. Flood. The
options were granted at an exercise price of $0.10 per share. For each person,
250,000 options vest on October 1, 2007, an additional 250,000 options vest on
October 1, 2008, an additional 250,000 options vest on October 1, 2009 and an
additional 250,000 options vest on October 1, 2010. Vested options may be
exercised at any time through September 30, 2016.

         On February 19, 2007, in order to induce an individual to become an
employee of LMLG, LMLG granted options to purchase 1,000,000 shares of its
common stock.. The options were granted at an exercise price of $0.10 per share.
250,000 options vest on February 18, 2008, an additional 250,000 options vest on
February 18, 2009, an additional 250,000 options vest on February 18, 2010, and
an additional 250,000 options vest on February 18, 2011. Vested options may be
exercised at any time through February 18, 2017.

BENEFICIAL OWNERSHIP TABLES

         The following information relates to those persons who are the
beneficial owners of five percent or more of our outstanding shares of common
stock:

NAME AND ADDRESS OF      AMOUNT AND NATURE OF       PERCENT
BENEFICIAL OWNER (1)     BENEFICIAL OWNERSHIP     OF CLASS (4)
--------------------     --------------------     ------------

Regina R. Flood              35,011,500 (2)           66.24

Brian P. Flood                9,138,500 (3)           17.29
----------
(1)  The address for each of the persons listed above is c/o LMLG, 6675 Amberton
     Drive, Elkridge, Maryland 21075.

(2)  Includes 34,761,500 shares of common stock and immediately exercisable
     options to purchase 250,000 shares of common stock.

(3)  Includes 8,888,500 shares of common stock and immediately exercisable
     options to purchase 250,000 shares of common stock.

(4)  The percentage is based upon 50,352,667 shares of issued and outstanding
     common stock, immediately exercisable warrants to purchase 2,000,000 shares
     of common stock and immediately exercisable options to purchase 500,000
     shares of common stock, all as of March 31, 2008.

                                       51
<PAGE>

         The following information relates to the shares of common stock
beneficially owned by each of our directors and executive officers and all of
our directors and executive officers as a group:

NAME AND ADDRESS OF      AMOUNT AND NATURE OF       PERCENT
BENEFICIAL OWNER (1)     BENEFICIAL OWNERSHIP     OF CLASS (5)
--------------------     --------------------     ------------
Regina R. Flood              35,011,500 (2)           66.24

Brian P. Flood                9,138,500 (3)           17.29

All directors and
executive officers
as a group (two persons)     44,150,000 (4)           83.53

----------
(1)  The address for each of the persons listed above is c/o LMLG, 6675 Amberton
     Drive, Elkridge, Maryland 21075.

(2)  Includes 34,761,500 shares of common stock and immediately exercisable
     options to purchase 250,000 shares of common stock.

(3)  Includes 8,888,500 shares of common stock and immediately exercisable
     options to purchase 250,000 shares of common stock.

(4)  Includes 43,650,000 shares of common stock and immediately exercisable
     options to purchase 500,000 shares of common stock.

(5)  The percentage is based upon 50,352,667 shares of issued and outstanding
     common stock, immediately exercisable warrants to purchase 2,000,000 shares
     of common stock and immediately exercisable options to purchase 500,000
     shares of common stock, all as of March 31, 2008.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         During the past two years, we have not entered into a transaction, nor
are any transactions currently proposed, with a value in excess of $60,000 with
an officer, director or beneficial owner of 5% or more of our common stock, or
with any member of the immediate family of any of the foregoing named persons or
entities, except as follows:

         During 2006, Mr. and Ms. Flood advanced an aggregate of $462,834 to
Chesapeake Logistics and received from Chesapeake Logistics loan payments of
$34,960. In the period from January 1, 2007 through December31, 2007, Mr. and
Ms. Flood advanced a total of $158,000 to Chesapeake Logistics and received no
loan payment from Chesapeake Logistics loan payments. At December 31, 2007,
Chesapeake Logistics was indebted to Mr. and Ms. Flood in the amount of
$612,834.

                                       52
<PAGE>

         As of December 5, 2006, Chesapeake Logistics executed and delivered a
promissory note in the principal amount of $462,834 to Mr. and Ms. Flood and was
added to with the advancements made in 2007. The entire principal amount of the
promissory note, together with all interest accrued thereon, is due and payable
on January 2, 2009. The promissory note bears interest at the prime rate of
interest from time to time published in The Wall Street Journal and is
unsecured. Payment of the promissory note is subordinated to the debts and
obligations of Chesapeake Logistics to all other parties. At December 31, 2007,
interest accrued on this note totaled $51,537.

ITEM 13. EXHIBITS.

<TABLE>
<CAPTION>
EXHIBIT
NO.               DESCRIPTION                                                   LOCATION
-------           -----------                                                   --------
<S>      <C>                                                  <C>
2.0      Contribution Agreement dated October 2, 2006         Filed as an exhibit to the Registration
         and between Last Mile Logistics Group, Inc.,         Statement on Form 10-SB on
         Chesapeake Logistics, LLC and the members            November 7, 2006
         of Chesapeake Logistics, LLC

3.0      Amended and Restated Articles of Incorporation       Filed as an exhibit to the Registration
         of Last Mile Logistics Group, Inc.                   Statement on Form 10-SB on
                                                              November 7, 2006

3.1      Amended and Restated Bylaws of Last                  Filed as an exhibit to the Registration
         Mile Logistics Group, Inc.                           Statement on Form 10-SB on
                                                              November 7, 2006

4.0      Form of Common Stock Share Certificate of            Filed as an exhibit to the Registration
         Last Mile Logistics Group, Inc.                      Statement on Form 10-SB on
                                                              November 7, 2006

10.0     Promissory Note dated September 29, 2000 in          Filed as an exhibit to the Registration
         the principal amount of $700,000 made by             Statement on Form 10-SB on
         Chesapeake Logistics, LLC to the Order of            November 7, 2006
         Wachovia SBA Lending, Inc. (f/k/a The
         Money Store Investment Corporation)

10.1     Commercial Security Agreement dated                  Filed as an exhibit to the Registration
         September 29, 2000 between Chesapeake                Statement on Form 10-SB on
         Logistics, LLC and Wachovia SBA Lending,             November 7, 2006
         Inc. (f/k/a The Money Store Investment
         Corporation)
</TABLE>

                                       53
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO.               DESCRIPTION                                                   LOCATION
-------           -----------                                                   --------
<S>      <C>                                                  <C>
10.2     Business Flex Line of Credit Note dated              Filed as an exhibit to the Registration
         November 29, 2005 in the principal amount of         Statement on Form 10-SB on
         $180,000 made by Chesapeake Logistics, LLC           November 7, 2006
         to the order of Manufactures and Traders Trust
         Company

10.3     Specific Security Agreement (Maryland) dated         Filed as an exhibit to the Registration
         November 30, 2005 between Chesapeake                 Statement on Form 10-SB on
         Logistics, LLC and Manufactures and Traders          November 7, 2006
         Trust Company

10.4     Promissory Note dated January 6, 2006 in the         Filed as an exhibit to the Registration
         principal amount of $250,000 made by                 Statement on Form 10-SB on
         Chesapeake Logistics, LLC to the Order of            November 7, 2006
         Wachovia Bank, National Association

10.5     Truck Lease and Service Agreement dated              Filed as an exhibit to the Registration
         as of  October 1, 2004 by and between                Statement on Form 10-SB on
         Ryder Truck Rental, Inc. and Chesapeake              November 7, 2006
         Logistics, LLC

10.6     Standard Industrial Lease dated April 3, 2006        Filed as an exhibit to the Registration
         between the Realty Associates Fund, VI, L.P.         Statement on Form 10-SB on
         and Chesapeake Logistics, LLC                        November 7, 2006

10.7     Employment Agreement dated October 2, 2006           Filed as an exhibit to the Registration
         by and between the Last Mile Logistics Group,        Statement on Form 10-SB on
         Inc. and Regina R. Flood                             November 7, 2006

10.8     Employment Agreement dated October 2, 2006           Filed as an exhibit to the Registration
         by and between the Last Mile Logistics Group,        Statement on Form 10-SB on
         Inc. and Brian P. Flood                              November 7, 2006

10.9     Stock Option Agreement dated October 2, 2006         Filed as an exhibit to the Registration
         by and between the Last Mile Logistics Group,        Statement on Form 10-SB on
         Inc. and Regina R. Flood                             November 7, 2006

10.10    Stock Option Agreement dated October 2, 2006         Filed as an exhibit to the Registration
         by and between the Last Mile Logistics Group,        Statement on Form 10-SB on
         Inc. and Brian P. Flood                              November 7, 2006

10.11    Promissory Note dated October 2, 2006 in the         Filed as an exhibit to the Registration
         principal amount of $125,000 made by Last            Statement on Form 10-SB on
         Mile Logistics Group, Inc. to the order of James     November 7, 2006
         A. Rose, II
</TABLE>

                                       54
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO.               DESCRIPTION                                                   LOCATION
-------           -----------                                                   --------
<S>      <C>                                                  <C>

10.12    Modification Agreement dated October 2, 2006         Filed as an exhibit to the Registration
         by and among Last Mile Logistics Group, Inc.,        Statement on Form 10-SB on
         Chesapeake Logistics, LLC and Thomas H.              November 7, 2006
         DeVries

10.13    Warrants dated October 2, 2006 issued by Last        Filed as an exhibit to the Registration
         Mile Logistics Group, Inc. to James A. Rose, II      Statement on Form 10-SB on
                                                              November 7, 2006

10.14    Promissory Note dated December 5, 2006 in the        Filed as an exhibit to Amendment
         principal amount of $462,834.13  made by             No. 1 to Registration Statement on
         Chesapeake Logistics to the order of Brian P.        Form 10-SB on January 3, 2007
         Flood and Regina R. Flood

10.15    Stock Option Agreement dated as of February 19,      Filed as an exhibit to Amendment
         2007 by and between the Last Mile Logistics,         No. 2 to Registration Statement on
         Group, Inc. and Barry Utz                            Form 10-SB on April 4, 2007

10.16    Second Modification Agreement dated as of            Filed as an exhibit to Quarterly
         June 18, 2007 by and between Last Mile Logistics     Report on Form 10-QSB filed on
         Group, Inc., Chesapeake Logistics, LLC and           August 13, 2007
         Charles H. DeVries

14.0     Code of Ethics, adopted March 20, 2007               Filed as an exhibit to Annual Report
                                                              on Form 10-KSB filed on April 5,
                                                              2007

21.0     Subsidiaries of the Registrant                       Filed as an exhibit to the Registration
                                                              Statement on Form 10-SB on
                                                              November 7, 2006

31.0     Certification Pursuant to Rule 13a-14(a) of
         Regina R. Flood                                      Filed herewith

31.1     Certification Pursuant to Rule 13a-14(a) of
         Brian P. Flood                                       Filed herewith

32.0     Certification Pursuant to
         18 U.S.C. Section 1350 of Regina R. Flood            Filed herewith

32.1     Certification Pursuant to
         18 U.S.C. Section 1350 of Brian P. Flood             Filed herewith
</TABLE>

                                       55
<PAGE>

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

AUDIT FEES

         For the fiscal years ended December 31, 2007 and December 31, 2006, the
aggregate fees billed for professional services rendered by Bouwhuis, Morrill &
Company, the Company's independent auditors, for the audit of the Company's
annual financial statements and the reviews of its quarterly financial
statements included in the Company's quarterly reports and filings under the
Securities Exchange Act of 1934 totaled $41,300 and $83,600, respectively.

AUDIT RELATED FEES

         For the fiscal years ended December 31, 2007 and December 31, 2006, no
fees were billed for professional services rendered by Bouwhuis, Morrill &
Company for assurance and related services that are reasonably related to the
performance of the audit or review of the Company's financial statements and are
not disclosed under "Audit Fees" above.

TAX FEES

         For the fiscal years ended December 31, 2007 and December 31, 2006, no
fees were billed by Bouwhuis, Morrill & Company for tax compliance, tax advice
or tax planning.

ALL OTHER FEES

         For the fiscal years ended December 31, 2007 and December 31, 2006, no
fees were billed by Bouwhuis, Morrill & Company for any products or services not
disclosed above.

PRE-APPROVAL POLICIES AND PROCEDURES

         The Company did not have an audit committee during 2007 or 2006 and,
therefore, had no pre-approval policies or procedures.

                                       56
<PAGE>
                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                   LAST MILE LOGISTICS GROUP, INC.


April 7, 2008                      By /s/Regina R. Flood
                                      ------------------
                                   Regina R. Flood, Chairperson and
                                   Chief Executive Officer
                                   (Principal Executive Officer)


April 7, 2008                      By /s/Brian P. Flood
                                      -----------------
                                   Brian P. Flood, President, Chief Operating
                                   Officer and Chief Financial Officer
                                   (Principal Financial and Accounting Officer)

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

NAME                                TITLE                         DATE
----                                -----                         ----

/s/Regina R. Flood         Chairperson of the Board           April 7, 2008
------------------         and Director
Regina R. Flood


/s/Brian P. Flood          Director                           April 7, 2008
-----------------
Brian P. Flood

                                       57