<PAGE>   1


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

[X]   Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
      Act of 1934 for the Fiscal Year ended December 31, 1999 or

[ ]   Transition report pursuant to Section 13 or 15(d) of the Securities
      Exchange  Act of 1934 for the  transition  period from _________
      to _________

                        COMMISSION FILE NUMBER: 000-22571

                  PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
             (Exact Name of Registrant as Specified in Its Charter)

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   <S>                                                             <C>
                               Georgia                                             58-1915632
   (State or Other Jurisdiction of Incorporation or Organization)     (I.R.S. Employer Identification No.)

        1950 Spectrum Circle, Suite B-100, Marietta, Georgia                          30067
              (Address of Principal Executive Offices)                             (Zip Code)

          (Issuer's Telephone Number, Including Area Code):                      (678) 264-0400

  Securities registered under to Section 12(b) of the Exchange Act:

                                None                                                  None
                        (Title of Each Class)                      (Name of Each Exchange on Which Registered)
</TABLE>

   Securities registered under Section 12(g) of the Exchange Act:

                      Common Stock, No Par Value Per Share
                    Redeemable Common Stock Purchase Warrants
                                (Title of Class)

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 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 [ ]

Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-K is not contained herein, and will not 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-K or any amendment to this
Form 10-K. [X]

The estimated aggregate market value of the voting and nonvoting Common Stock
held by non-affiliates computed by reference to the closing sale price of Common
Stock on April 12, 2000, as reported on the Nasdaq Stock Market's SmallCap
Market, was approximately $17.6 million. As of April 12, 2000, the Registrant
had outstanding 6,930,626 shares of Common Stock and 1,437,500 Redeemable Common
Stock Purchase Warrants.

                       DOCUMENTS INCORPORATED BY REFERENCE

Certain exhibits have been incorporated by reference in Part IV of this Form
10-K.


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                               INDEX TO FORM 10-K
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                                                                                                          Page
PART I

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Item 1.      Business........................................................................................3

Item 2.      Properties.....................................................................................15

Item 3.      Legal Proceedings..............................................................................15

Item 4.      Submission of Matters to a Vote of Security Holders............................................15

PART II

Item 5.      Market for Registrant's Common Equity and Related Stockholder Matters..........................15

Item 6.      Selected Consolidated Financial Data...........................................................17

Item 7.      Management's Discussion and Analysis of Financial Condition and Results of Operations..........18

Item 7a.     Quantitative and Qualitative Disclosures About Market Risk.....................................23

Item 8.      Financial Statements and Supplementary Data....................................................23

Item 9.      Changes in and Disagreements with Accountants on Accounting and Financial Disclosure...........23

PART III

Item 10.     Directors and Executive Officers of the Registrant.............................................24

Item 11.     Executive Compensation.........................................................................27

Item 12.     Security Ownership of Certain Beneficial Owners and Management.................................29

Item 13.     Certain Relationships and Related Transactions.................................................30

PART IV

Item 14.     Exhibits, Financial Statement Schedules and Reports on Form 8-K................................32
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                                     PART I

ITEM 1.  BUSINESS

         This Annual Report contains statements which constitute forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
These statements appear in a number of places in this Report and include all
statements that are not statements of historical fact regarding the intent,
belief or current expectations of the Company, its directors or its officers
with respect to, among other things: (i) the Company's financing plans; (ii)
trends affecting the Company's financial condition or results of operations;
(iii) the Company's growth strategy and operating strategy; and (iv) the
declaration and payment of dividends. The words "may," "would," "could," "will,"
"expect," "estimate," "anticipate," "believe," "intend," "plans," and similar
expressions and variations thereof are intended to identify forward-looking
statements. Investors are cautioned that any such forward-looking statements are
not guarantees of future performance and involve risks and uncertainties, many
of which are beyond the Company's ability to control. Actual results may differ
materially from those projected in the forward-looking statements as a result of
various factors. Among the key risks, assumptions and factors that may affect
operating results, performance and financial condition are the Company's
reliance on a small number of customers for a larger portion of its revenues,
fluctuations in its quarterly results, ability to continue and manage its
growth, liquidity and other capital resources issues, competition and the other
factors discussed in detail in the Company's filings with the Securities and
Exchange Commission, including the "Risk Factors" section of the Company's
Registration Statement on Form S-3 (Registration Number 333-70985), as declared
effective by the Securities and Exchange Commission on February 5, 1999.

OVERVIEW

         Professional Transportation Group Ltd., Inc., a Georgia corporation
(the "Company"), is a transportation services company that provides ground
transportation and logistics services for the air freight and floorcovering
industries throughout the continental United States. The Company was founded by
Dennis A. Bakal in October 1990, and he is the Company's Chief Executive Officer
and President. The Company serves as a holding company for its two operating
subsidiaries: Timely Transportation, Inc. ("Timely") and Truck-Net, Inc.
("Truck-Net"). For the year ended December 31, 1999, Timely accounted for
approximately $34.5 million or 84% of the Company's revenues and Truck-Net
accounted for approximately $6.3 million or 15% of the Company's revenues.

         The Company's consolidated revenues decreased by 25% from 1998 to 1999.
The Company attributes this decrease to a reduction in revenues generated from
the carpet industry in that the Company did not operate this portion of its
business in 1999 as well as the inclusion of revenues from the Company's Timely
North subsidiary during 1998 which were not included in 1999. Management
believes that revenues will increase in future periods, as trends toward an
expansion of core carrier relationships and a trend toward reductions of private
fleets and greater outsourcing by shippers favor more efficient and
cost-effective providers of transportation services.

         On December 3, 1999, the Company's majority shareholder, Chief
Executive Officer, President and director, Dennis A. Bakal, entered into an
agreement with Logistics Management, L.L.C., a Kentucky limited liability
company ("Logistics"), under which Mr. Bakal sold to Logistics all 2.5 million
shares of common stock owned by him. At the time, the purchase


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comprises approximately 56% of the outstanding voting shares of the Company. The
purchase price for the shares was $3 million and included a $500,000 loan to Mr.
Bakal, which by the terms of the agreement Mr. Bakal contributed to the Company
as a capital contribution. Logistics is a controlling shareholder in U.S.
Trucking, Inc. (OTC: USTK).

INDUSTRY

         The Company's main businesses, Timely and Truck-Net, operate in the
expedited, time-definite truckload market and target a customer base in the air
cargo industry. The total U.S. expedited air cargo market is expected to
generate $82.4 billion in revenue in 2000, a 5.7% increase over 1999 levels.
This segment will lead the domestic air market. About 60% of all shipments will
move as deferred package shipments, an 8.6% gain from 1999. Carriers serving the
U.S. expedited air cargo market will carry approximately 223 billion pounds of
freight in 2000, a 2.4% increase from 1999.

         The air freight industry has changed dramatically over the last two
decades. Prior to 1980, shippers of air freight used both freighter aircraft
operated by passenger and freight airlines and passenger aircraft, with the
limited capacity of their cargo compartments, for the movement of goods. In the
late 1970s and the early 1980s, fundamental changes in the air freight industry
began to constrain freight activity. The passenger airlines gradually eliminated
their freighter aircraft, coinciding with the consolidation of the major U.S.
based all-freight airlines and the emergence and growth of the integrated
carriers, such as Federal Express Corporation ("FedEx"), United Parcel Service
("UPS"), Emery Worldwide ("Emery"), Burlington Air Express ("Burlington") and
Airborne Freight. Although these integrated carriers operate their own dedicated
fleets of aircraft, trucks and delivery vans, they focus on the shipment of
size- and weight-restricted packages and freight. Freighters and "combi"
(combination passenger/freight) aircraft continue to carry international
freight, but domestic packages and freight not meeting the restrictions of the
integrated carriers were relegated to available space in the limited-capacity
cargo holds of passenger aircraft. Passenger aircraft operate predominantly
during the daytime, although freight had historically moved at night. The
imposition of curfews at major airports to reduce noise during early morning
hours and the elimination of freighter aircraft operated by passenger airlines
limited freight activity even more.

         All of these changes resulted in the development of the concept of
"deferred freight," which is freight that generally is time sensitive (two or
three day delivery), but does not have the immediacy of next day or overnight
delivery. The additional time available for completion of a deferred freight
shipment makes overland transportation by truck a viable alternative to
transportation by air. Time definite trucking of air freight has developed as
the answer to the overland movement of deferred freight. While many in the
industry have focused on regional business, Timely's and Truck-Net's emphasis
has been on servicing the "deferred freight" needs of the air freight industry
nationally. This service meets the required delivery parameters of the
customers, but in a much more cost sensitive environment than overnight freight.
The overnight delivery so common in today's business environment is primarily
limited to package (letter and document) freight and the movement of heavier
freight (up to 150 pounds per piece or 300 pounds per shipment). The deferred
freight market has developed to primarily handle shipments of greater than 300
pounds. The Company, through the operations of Timely and Truck-Net, has
positioned itself to serve the needs of this market.


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STRATEGY

         The Company's business strategy is to establish itself as a preferred
provider of high-quality, cost-effective transportation and logistics services
to the air freight and floorcovering industries. Key elements of the Company's
strategy include the following:

                  Deliver Superior Customer Service and Add Value. Expedited
         on-time delivery is the mission of the Company's customers, and in
         order to meet their needs, the Company provides time-definite pickup
         and delivery. Compared with deferred air freight services, the Company
         offers comparable transit times at much lower prices for its customers
         in the air freight industry. The Company uses experienced driver teams
         and modern technology to ensure that customers receive quality service.
         The Company does not always strive to be the lowest-cost carrier for
         its customers, but instead focuses on providing value (such as real
         time tracking of a shipment) beyond any marginally higher price its
         customers might pay.

                  Utilize Available Technology and Modern Equipment. Due to
         customer demands for real time information on their shipments and
         on-time deliveries, the Company utilizes modern satellite technology to
         track its vehicles. The Company's use of the Qualcomm tracking system
         allows the Company to provide customers with precise information on the
         status of their shipments and notify them of any potential delays. In
         addition, the system provides valuable information on a truck's speed,
         mileage, fuel consumption, and other factors that enable the Company to
         increase efficiency and reduce costs. The Company also has developed a
         proprietary route optimization software program to assist management in
         analyzing the most cost-effective route system for the Company's fleet.

                  Attract and Retain Highly-Skilled and Motivated Employees. To
         provide superior customer service, the Company relies on a dedicated
         team of professional drivers, administrators and managers committed to
         serving customers. Through a recruitment and hiring program, the
         Company hires only professional drivers who are selected based on
         experience, safety record, and a personal evaluation. The competition
         for experienced drivers is intense, but by providing modern equipment
         and offering competitive salaries and dedicated routes, the Company is
         successful in recruiting and retaining productive, satisfied drivers.
         The Company's success in reducing driver turnover rate has contributed
         to an overall increase in its efficiency and reduction of the expenses
         associated with hiring, training and integrating new employees.

         The Company intends to continue to invest in modern equipment, to
expand its marketing capabilities and to improve its operating and distribution
efficiencies through acquisitions, strategic alliances and capital expenditures.
In implementing this plan, the Company believes it will increase its market
share, obtain greater control over the quality, availability and cost of its
services, and improve operating margins.

TRANSPORTATION SERVICES

         Through its Timely subsidiary, which was formed in 1991, the Company
provides time-definite truckload transportation services for companies in the
air freight and expedited delivery and floor covering markets. Operating both
common carrier and dedicated fleet services for its customers, Timely moves
freight across long and short distances with very precise schedules for pickups
and deliveries. The Company's "Almost as Fast as Air"SM service has transit
times comparable to those of deferred air freight services. The Company focuses
on the marketing of


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its services to the large carpet manufacturers located in the southeastern U.S.
The Company's services to these customers include multiple drops; appointment
pick-ups and deliveries; assistance in loading and unloading; dedicated
equipment with extra trailers that can be located for the convenience of
customers; and the assignment of particular drivers and equipment to prescribed
routes, providing better service to customers while maintaining a high equipment
utilization.

         As of December 31, 1999, Timely operated approximately 200
Company-owned or leased tractors and used 30 owner-operators that may provide
one or more pieces of operating equipment. Timely agents operated 45 tractors as
of December 31, 1999. Timely operates in all of the 48 contiguous states, but
its primary activity is in the eastern half of the U.S. As of December 31, 1999,
approximately 65% of the tractors operated by Timely served dedicated lane
segments.

LOGISTICS-MANAGEMENT SERVICES

         Through its Truck-Net subsidiary, which was acquired by Mr. Bakal in
July 1991, the Company operates as a broker of truckload services to the air
freight industry. Since many air cargo carriers and air freight forwarders do
not own trucks, they rely upon third party carriers for ground transportation
services. Through logistics companies like Truck-Net, a shipper can place a
single call to arrange truckload services anywhere in the United States, without
having to contact numerous individual carriers who may or may not have a truck
available for a particular shipment to a particular destination.

         Truck-Net maintains a network of over 600 truckload carriers. Upon
receiving a call from a customer, a Truck-Net representative contacts various
truckload carriers until locating one that has the time and the proper equipment
to transfer the freight. The Truck-Net representative will make all of the
arrangements to have the freight picked up and delivered. In addition, Truck-Net
tracks the vehicles and monitors the shipment from pickup through delivery,
enabling customers to contact Truck-Net rather than the individual carrier to
get information on their shipment. Truck-Net's customers are sent a single
invoice for all shipments and payments for those shipments are made directly to
Truck-Net. Truck-Net then pays the hired carrier, retaining a portion of the fee
paid by the customer. Thus, customers avoid having to pay multiple invoices from
carriers.

AGENCY AND BUSINESS-TO-BUSINESS PROGRAMS

         Since its inception in April 1999, the Company has operated an agency
program and expects to continue to develop this program through its wholly-owned
subsidiary, Timely Services, Inc., which was organized in January 2000. The
Company's agency program is essentially a cooperative for smaller,
time-definite, expedited truckload carriers whereby the Company permits these
carriers to operate under the Company's authority as agent. The agent provides
its customers and business. The Company bills the agent carrier's customers and
collects the revenues for these shipments. The Company in substance acts as an
application service provider ("ASP") for its agents by affording the agents
access to the Company's web-enabled application software and global positioning
technologies. In addition, the agents receive economies of scale by
participating in the purchase of certain overhead and other items, such as
maintenance and fuel. We also provide the agent with liability insurance
coverage and certain administrative services such as human resource
administration, safety and risk management, Department of Transportation
compliance, billing and collecting receivables. By freeing the agents from
administrative tasks, they are able to focus on growing their businesses. Since
its


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inception in April 1999, the Company has signed seven agents that have
approximately $14 million in annual revenue.

         The Company intends to exploit its existing and developing technology
to enhance not only its agency program but also to develop a business-to
business ("B2B") load-booking, load sharing, and third-party logistics ("3PL")
enterprises. The Company announced on April 6, 2000 its TranzPartners.com
subsidiary, a B2B cost savings and load sharing Web site for the trucking and
3PL industries.

         Long since web-enabled, the Company has implemented and offered to its
customers detailed load booking and truck position mapping programs; therefore
the centralized database is a perfect ingression for partner exchange of load
and truck availability. This database of information will allow partners
improved utilization and cost reductions. Unlike other co-ops, the Company is
encouraging asset as well as non-asset based partners as this will afford a full
complement of logistics and supply chain companies to come together for the
benefit of all. The TranzPartners.com site is expected to be complete on or
about May 15, 2000.

CUSTOMERS

         The Company's customers are primarily businesses in the air freight and
floorcovering industries. The Company's customers include traditional air
freight forwarders and integrated carriers such as FedEx, UPS, Emery, and
Burlington, all of whom operate fleets of their own dedicated aircraft, trucks
and delivery vans. The Company's customers in the floorcovering industry include
Aladdin Mills and Mohawk Industries.

         Major customers of the Company, such as FedEx, have developed the
concept of "core carriers" for the contract movement of their freight by
independent trucking companies. Under this concept, a limited number of carriers
are selected to perform the line haul (point to point, or terminal to terminal)
carriage of the shipper's freight. Core carrier relationships offer steady
revenues from dedicated lane segments, which allows the Company to offer its
drivers regular routes. As a means of diversifying its customer base, the
Company may seek to establish core carrier relationships with businesses in
industries outside the air freight or floorcovering industries.

         FedEx is the Company's largest customer, and the Company serves as one
of eight core carriers for FedEx. The Company has entered into an agreement to
provide services for FedEx over certain lane segments. The lane segments are
awarded based on competitive bids solicited among the group of core carriers. As
new lane segments become available, the Company bids for such segments, and any
new segments awarded will terminate at the termination of the agreement which
will expire in May 2000. The Company is currently in negotiations with regarding
a renewal of this agreement. The Company expects to announce this renewal in the
very near future. Fedex is not precluded from performing the services itself or
through its subsidiaries or affiliates. In addition, FedEx may terminate its
agreement with the company upon 30 days notice and the payment of a termination
charge. The Company is required under the agreement to maintain a minimum
service level, and its performance to date has exceeded the minimum operating
performance requirements of the agreement. There can be no assurance, that the
Company's agreement with Fedex will be renewed.

         For the year ended December 31, 1999, the Company's five largest
customers accounted for approximately 70% of the Company's consolidated
revenues. Of these five customers, FedEx accounted for approximately 41% of the
revenues generated during the year ended December 31,


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1999. No other customer accounted for more than 10% of the Company's
consolidated revenues during the year ended December 31, 1999. The loss of FedEx
would have a material adverse effect on the results of operations for the
Company.

EQUIPMENT AND TECHNOLOGY

         Most of the Company's equipment is utilized by Timely. As of December
31, 1999, the Company operated a modern fleet of approximately 230 tractors with
an average age of less than two years. The Company leases its tractors from
large national leasing companies or through the leasing programs of the
manufacturer. This leasing strategy gives the Company the availability of
nationwide maintenance facilities to ensure minimal down time in case of
mechanical failure, as well as a nationwide system for the performance of
scheduled preventative maintenance, no matter where the individual unit is
located. The Company launched a program in 1996 to purchase or lease, on more
favorable terms, its operating equipment. Prior to 1996, most of the Company's
operating equipment was leased under terms which included a 15% premium for
rented tractors, and a mileage charge for maintenance on the vehicles.

         In the early years of Timely's operations, it also leased its trailer
fleet. In 1995 and 1996 the Company began purchasing its trailers through either
direct bank borrowings or capitalized leases. In coming to the decision to own
rather than lease trailers, the Company considered the longer life, relatively
higher salvage value, simplified maintenance costs of trailers as compared with
tractors, and the need to install required cargo handling systems in certain
trailers. While it has been necessary to install cargo handling systems in
certain leased trailers in the past, it is the Company's intention to install
the required equipment only in Company-owned vehicles in the future. Any cargo
handling equipment will be removed from leased trailers at the termination of
the lease agreement. The current trailer fleet mostly contains modern, 53-foot
long, high cubic capacity units, many equipped with roller systems to facilitate
cargo loading and unloading. The average age of the trailer fleet is less than
four years. As of December 31, 1999, the Company operated a fleet of
approximately 500 trailers, of which approximately 23% were leased.

         The Company has invested heavily in modern computer and communications
technology, and considers itself a leader in the industry in this aspect. The
modern tractor fleet operated by Timely (and most of the equipment operated by
companies utilized by Truck-Net) utilizes onboard computers with satellite
communications capabilities. Each tractor in the Timely fleet is equipped with a
Qualcomm satellite communications system, which allows the dispatchers to follow
the progress of a vehicle, its speed, fuel consumption, and most importantly,
its adherence to schedule, while allowing the timely and efficient communication
of operating data, such as pickup and delivery instructions, directions to
customer facilities, loading instructions, routing, fuel, taxes, mileage,
payroll, safety, weather advisories, and traffic and maintenance information.
The satellite tracking of the movement of the vehicles, the constant monitoring
of schedule, speed, and fuel consumption, and the availability of two-way
communication has allowed the Company to fine-tune its operation and deliver its
customers a high level of on-time service.

         In order to maintain the highest level of quality control and maintain
the Company's and its customers' strict performance standards, the Company's
central dispatching/customer service units operate 24 hours a day, seven days a
week. If any problem should develop, managers and supervisors are either on hand
or readily available to the dispatch center.


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DRIVERS AND EMPLOYEES

         Beginning in 1995, the Company faced increasing costs of workers'
compensation insurance and related items. To address this problem the Company
has transferred all of its drivers (and certain of its other employees) to an
employee leasing company owned by an unrelated third party. New drivers are
located through a recruitment and hiring program managed by the Company and,
after completing the required testing and orientation, are hired by the leasing
company. The Company reimburses the leasing company for all of the direct costs
associated with the driver payroll, plus a percentage fee of the total amount of
the payroll. The leasing company is able to obtain lower rates for certain
expenses, such as workers' compensation insurance and employee benefits, due to
the large size of its employee pool. Thus, even after payment of the percentage
fee, the Company believes it has reduced its driver costs per mile by utilizing
the third party leasing company. The agreement with the leasing company is
open-ended in that it covers all of the individuals designated by the Company to
be enrolled thereunder. Employees are enrolled for the duration of their
employment (which is at the Company's will) and not solely for a specific
one-time delivery. The Company may terminate the agreement at any time upon
notice to the leasing company.

         The recruitment, training and retention of qualified drivers is
essential to support the Company's continued growth and to meet the service
requirements of the Company's customers. Drivers are selected in accordance with
Company-specific quality guidelines relating primarily to safety history,
driving experience, road test evaluations and other personal evaluations,
including physical examinations and mandatory drug and alcohol testing. Drivers
are trained in all phases of the Company's policies and procedures, including
customer service requirements, general operations, fuel conservation and
equipment maintenance, operation and safety.

         The Company seeks to maintain a qualified driver force by providing
attractive and comfortable equipment, direct communication with senior
management, competitive wages and benefits and other incentives designed to
encourage driver retention and long-term employment. Many drivers are assigned
to dedicated or semi-dedicated routes, thereby enhancing job predictability.
Drivers are recognized for providing superior service and developing good safety
records and must successfully complete driver reviews administered by the
Company's safety department.

         As of December 31, 1999, the Company employed 304 persons, 228 of whom
were drivers; five were in sales and customer service; 42 were in operations;
one was in maintenance and 28 were in administration and management. The Company
also had contracted with 30 independent contractors as of December 31, 1999, to
provide tractors. None of the Company's employees are represented by a labor
union. The Company believes its relationship with its employees is good.

INDEPENDENT CONTRACTORS

         Because independent contractors provide their own tractors, they
provide the Company an alternative method of obtaining additional revenue
equipment. The Company intends to continue to increase its use of independent
contractors. As of December 31, 1999, the Company utilized 30 independent
contractors. Each independent contractor enters into a contract with the Company
pursuant to which it is required to furnish a tractor and a driver or team of
drivers exclusively to transport, load and unload goods carried by the Company.
Independent contractors are paid a fixed level of compensation based on a fee
per mile. Independent contractors are


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obligated to maintain their own equipment and pay for their own fuel. The
Company provides trailers for each independent contractor.

SAFETY AND RISK MANAGEMENT

         The Company is committed to ensuring that it has safe drivers and
independent contractors. The Company regularly communicates with drivers to
promote safety and to instill safe work habits through Company media and safety
review sessions. These programs reinforce the importance of driving safety,
abiding by all laws and regulations, regarding such matters as speed and driving
hours, and performing equipment inspections. The Company conducts quarterly
safety training meetings for its drivers and independent contractors. In
addition, the Company has a recognition program for driver safety performance.

         The Company's Safety Director reviews all accidents, takes appropriate
action related to drivers, examines trends and implements changes in procedures
or communications to address any safety issues. Management's emphasis on safety
also is demonstrated through its equipment specifications and maintenance
programs.

         The Company requires prospective drivers to meet or exceed the
qualification standards required by the U.S. Department of Transportation
("DOT"). The DOT requires the Company's drivers and independent contractors to
obtain national commercial drivers' licenses pursuant to regulations promulgated
by the DOT. The DOT also requires that the Company implement a drug testing
program in accordance with DOT regulations. The Company's program includes
pre-employment, random, post-accident and post-injury drug testing.

         The principal claims arising in the Company's business consist of cargo
loss and damage, and auto liability (personal injury and property damage). The
Company's insurance policies provide for general liability coverage up to
$1,000,000 per occurrence and automobile liability coverage up to $1,000,000 per
occurrence. The Company carefully monitors claims and participates actively in
claims estimates and adjustments.

REGULATION

         Historically, the Interstate Commerce Commission ("ICC") and various
state agencies regulated truckload carriers' rights, accounting systems, rates
and charges, safety, mergers and acquisitions, periodic financial reporting and
other matters. In 1995, the passage of federal legislation preempted, in many
respects, state regulation of prices, rates, and services of motor carriers and
eliminated the ICC. Several ICC functions were transferred to the DOT, and will
be administered by the Surface Transportation Board, but a lack of implementing
regulations to date currently prevents the Company from assessing the full
impact of this action. Generally, the trucking industry is subject to regulatory
and legislative changes that can have a material effect on operations.

         Interstate motor carrier operations are subject to safety requirements
prescribed by the DOT. Such matters as weight and dimensions of equipment are
also subject to federal and state regulation. In 1988, the DOT began requiring
national commercial drivers' licenses for interstate truck drivers.

         The Company's motor carrier operations are also subject to federal and
state environmental laws and regulations, including laws and regulations dealing
with the transportation of hazardous materials and other environmental matters.
Specifically, the U.S.


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Environmental Protection Agency ("EPA") requires motor carrier operators to
obtain a Certificate of Registration in order to transport hazardous materials.
The Company has initiated programs to comply with all applicable environmental
regulations. For example, the Company requires each of its drivers to
participate in training regarding the handling of hazardous materials, including
tests given to the drivers after such training to ensure that the basic skills
have been achieved. As part of its safety and risk management program, the
Company periodically performs an internal environmental review to assist in
environmental compliance and avoid environmental risk. The Company has operating
authority (in the form of the EPA-required Certificate of Registration) to ship
environmentally hazardous substances and, to date, has experienced no claims for
hazardous substance shipments. The shipment of hazardous materials has not been
a material part of the Company's business, to date.

         The Company believes it is currently in material compliance with
applicable laws and regulations and that the cost of compliance has not
materially affected results of operations.

FUEL

         The Company purchases fuel from numerous suppliers and is not
materially dependent on any one or a group of suppliers for its fuel
requirements, however, the Company has and will continue to make arrangements
with fuel suppliers to achieve the best possible pricing. Derivatives are not
used by the Company to hedge against increased fuel prices. With the rise in
fuel prices during the course of 1999, the Company instituted a fuel surcharge
to its customers in September 1999. The surcharge was determined weekly by the
ICC fuel survey as reported by the ICC and published at "www.EIA.DOE.gov."
Although fuel price increases were passed through to the Company's customers,
increases in fuel taxes or fuel prices would have a direct effect on the
Company's operating results if the Company is unable to pass on such increase.
Similarly, any increases in fuel taxes or fuel prices could also adversely
affect the profitability of independent contractors and the Company's cost of
retaining such contractors, to the extent such increases could not be passed
along to the Company's customers. As of the date of this report, the Company has
received a favorable reaction from its customers regarding the surcharge and the
fuel index indicates fuel prices are stabilizing and coming down from the high
levels experienced during the fall of 1999.

COMPETITION

         The truckload transportation industry is heavily fragmented and
intensely competitive. The Company has numerous competitors that vary in size,
ranging from small operators who can compete on certain lane segments due to
lower overhead, to significantly larger companies with greater financial
resources, more equipment, and larger volume capacities than the Company's. The
main competitive factors in the truckload industry are service, pricing,
efficiency and availability of equipment.

         Within the logistics services industry, key competitive factors include
information technology and carrier relationships. There are a number of other
companies in the logistics services business that have more employees and a
greater number of branch offices than the Company. Management believes that
Truck-Net is one of the largest logistics companies exclusively serving the air
freight industry in the United States.


                                       11
<PAGE>   12


PROPERTIES

         The Company's principal offices and corporate headquarters are located
in approximately 12,580 square feet of office space in Marietta, Georgia. The
lease for this space commenced on May 1, 1999 for a term of seven years.

         The Company leases a maintenance facility in Lake City, Georgia
strategically located in close proximity to Atlanta's Hartsfield International
Airport where the Company's customers have facilities. This facility performs
routine preventive and secondary maintenance on all Timely equipment, which
virtually eliminates the Company's need to outsource maintenance except for
breakdowns that occur in other locations.

         The Company believes that these facilities are adequate for its present
needs.

LITIGATION

         An involuntary bankruptcy petition was filed on or about May 26, 1998
against Continental American, the parent corporation of Carpet Transport, Inc.
(" CTI" ), in the case styled In re: Continental American Transportation, Inc.,
Case No. 98-41900 HR, U.S. Bankruptcy Court for the Northern District of Georgia
(Rome Division). This action was initiated by several parties purporting to be
creditors of Continental American. The involuntary bankruptcy petition resulted
in the appointment of a trustee. The trustee has pursued all bankruptcy claims
against the Company under the Carpet Transport bankruptcy. See below.

         An involuntary bankruptcy petition was filed on or about August 7, 1998
by CTI Properties, Inc., a wholly-owned subsidiary of Continental American, in
the case styled In re: CTI Properties, Inc., Case No. R98-42886-HR, U.S.
Bankruptcy Court for the Northern District of Georgia (Rome Division). The same
trustee has been appointed for both Continental American and CTI Properties. The
trustee has filed an adversary proceeding against the Company asserting that the
Company's first priority security deed may be avoided as a fraudulent conveyance
claiming that CTI Properties did not receive the benefit of the loans. The
Company has answered the trustee's complaint and intend to contest the case
vigorously. Discovery in this case has been conducted within the Carpet
Transport bankruptcy. See below.

         On or about June 17, 1998, a lawsuit was filed against Timely North and
the Company in the case styled CIT Finance Group, Inc. v. Timely North, Inc. and
Professional Transportation Group Ltd., Inc., Case No. 98-CV2280-2, Superior
Court of Clayton County, Georgia. This action was filed by a lessor of rolling
stock to CTI. The complaint alleges generally that Timely North and the Company
are indebted to CIT in an amount to be determined at trial, but that CIT alleges
to be approximately $350,000, an amount disputed by the Company. While neither
Timely North nor the Company has had any contractual relationship with CIT, CIT
asserts in its complaint that the use of its rolling stock entitles CIT to
receive from Timely North and the Company the fair rental value of the rolling
stock during the period of time that Timely North used the rolling stock. Timely
North and the Company have timely filed answers to CIT's complaint, and intend
to contest the case vigorously. Discovery in the case is proceeding.

         An involuntary bankruptcy petition was filed on or about June 17, 1998
against CTI in the case styled In re: Carpet Transport, Inc., Case No. 98-42224
HR, U.S. Bankruptcy Court for the Northern District of Georgia (Rome Division).
This action was filed by several parties purporting to be creditors of CTI and
alleges among other things that Timely North or its affiliates had collected a
portion of CTI's receivables, that a representative of the Company had


                                       12
<PAGE>   13


caused CTI's withholding tax payments to the IRS to be diverted to Timely
North's benefit (to pay Form 2290 taxes), and that Timely North had sold
portions of CTI's equipment without accounting for the sales proceeds. A trustee
has been appointed and is investigating these potential claims. The trustee has
also questioned the receipt by the Company of a payment it received for a
consulting and non-competition agreement. The trustee also questioned the
fully-secured status and priority of the Company's September 12, 1997 secured
loan to CTI and its affiliates. The Trustee has also asserted that Timely North
and Timely Transportation are "successor" corporations of CTI and therefore
liable for the debts of CTI and responsible to account for the revenues of CTI
from September 1997 to date. The trustee questioned whether the Company was
entitled to the proceeds of the sale of certain rolling stock formerly leased by
CTI. The trustee has filed a Partial Motion for Summary Judgment against Timely
Transportation and the Company seeking an accounting based upon an alleged
fiduciary relationship between CTI and the Company or Timely Transportation or
Timely North. Timely North is not a party to the action. Timely Transportation
and the Company have responded to the Motion and deny the trustee's allegations
that Timely Transportation and the Company owe a fiduciary duty to CTI. In the
event that the trustee should pursue any of these claims against the Company or
its affiliates, the Company and/or its affiliates intend to vigorously defend
against any such claim. Discovery in this case is proceeding.

         On or about July 30, 1998, an action was brought against Timely and
other defendants in the case styled The CIT Group/Equipment Financing, Inc. v.
Timely Transportation, Inc., et al., Case No. 98-14395, Court of Common Pleas of
Montgomery County, Pennsylvania. The plaintiff as a secured creditor of various
defendants other than Timely alleges that those defendants defaulted in their
installment payments to the plaintiff, that the plaintiff sold the collateral in
a foreclosure sale, that the plaintiff has been damaged in the amount of
approximately $151,000, and that Timely is a " successor" to the other
defendants and therefore owes to ClT Group its damages. The parties have reached
a settlement in this case and are in the process of reducing the settlement
terms to a consent judgment.

         On or about September 4, 1998, an action was filed against the Company,
Timely and Timely North in the case styled U.S. Bancorp Leasing & Financial v.
Timely North, Inc., Timely Transportation, Inc. and Professional Transportation
Group Ltd., Inc., Case No. 34611, Superior Court of Gordon County, Georgia. This
action was filed by a lessor of rolling stock to CTI. The complaint alleges
generally that the Company, Timely and Timely North, are indebted to U.S.
Bancorp in an amount to be determined at trial. U.S. Bancorp is seeking
$290,534.50, an amount disputed by the Company. While neither Timely, Timely
North nor the company has had any contractual relationship with U.S. Bancorp,
U.S. Bancorp asserts in its complaint that the use of its rolling stock entitles
it to receive from Timely, Timely North and the Company the fair rental value of
the rolling stock during the period of time that Timely North used the rolling
stock. Timely, Timely North and the Company have filed answers to U.S. Bancorp's
complaint, and intend to contest the case vigorously.

         Scott Logistics Corporation v. Timely North, Inc. and Timely
Transportation, Inc., Civil Action File No. 34324, Superior Court of Gordon
County, Georgia. The plaintiff filed suit in response to Timely North's efforts
to collect $9,709.23 due on account from the plaintiff. The plaintiff filed suit
against both Timely North and Timely seeking claims for $8,342.34 for alleged
damages to freight and approximately $60,000 based on allegations of tortious
interference with plaintiff's relationships with one or more of its customers.
Timely and Timely North have filed an answer to the suit and are vigorously
defending against plaintiff's claims. In addition, Timely North has filed a
counterclaim in the amount of $9,709.23 for sums due on account from the
plaintiff.


                                       13
<PAGE>   14


         T.M.B. Inc. v. Timely Transportation Inc. and Timely North, Inc., Case
No. 98-CV-1931, U.S. District Court for the Northern District of Georgia,
Atlanta Division. The plaintiff seeks to recover $99,998.52 for services
rendered and goods supplied. Timely has filed an answer denying liability, and
intends to vigorously defend on the merits. The plaintiff has attempted to add
Professional Transportation Group Ltd., Inc. as a defendant and to bring
additional claims based on alleged breaches of certain equipment leases. The
amount of the plaintiff's additional claims has yet to be determined, but the
court has, thus far, denied the plaintiff's attempts to add such additional
claims. In any event, the Company was not the lessee under the equipment lease
in issue, and intends to vigorously defend against such claims in the event an
additional lawsuit is filed. The plaintiff has filed a motion for summary
judgment that the Company intends to respond to in a timely manner.

         Trailer Leasing Company v. Timely Transportation, Inc., Case No.
98-L-05447, Circuit Court of Cook County, Illinois. The plaintiff seeks to
recover $137,970.53 for alleged equipment rental charges. Timely disputed the
amount claimed by the plaintiff. In April 1999, this matter was settled. The
Company has agreed to pay the plaintiff a total of $108,000 in 18 equal monthly
installments.

         L.T.D. Logistics, Inc. and Arrow Lines Services, Inc. v. Timely
Transportation, Inc., Timely North, Inc. and Professional Transportation Group
Ltd., Inc., Civil Action File No. 981-6827-99, Superior Court of Cobb County,
Georgia. The plaintiffs claim that they are owed $71,328.30 for services
allegedly rendered. The Company filed an answer denying liability and asserting
that the liability, if any, is solely that of Timely North, Inc. In addition,
Timely North, Inc. has asserted setoffs to the plaintiff's claims..

         USF&G v. Timely Transportation, et al, Civil Action No. 98A5879-4,
State Court of Cobb County, Georgia. USF&G is seeking recovery in the amount of
$52,229.66 for alleged workers' compensation insurance audit premiums, dating
back to 1994. Timely has filed an answer denying responsibility for such
premiums and intends to vigorously defend this matter.

         Gainey Transportation Services, Inc. v. Timely Transportation, Inc.,
Timely North, Inc. and Professional Transportation Group Ltd., Inc., Civil
Action File No. 99-1-5811-99, Superior Court of Cobb County, Georgia. The
plaintiff filed suit claiming that it is owed approximately $65,356.22 for
services rendered. The Company has filed an answer denying liability and
asserting that the liability, if any, is solely that of Timely North.

         Client Server Solutions, Inc. v. Professional Transportation Group
Ltd., Inc., Case No. 99-CV-01909D, State Court of Clayton County, Georgia. The
plaintiff seeks to recover approximately $87,448.62 for services allegedly
rendered. The Company disputes the plaintiff's claim and filed an answer denying
liability. It appears that the Company may have counterclaims against the
plaintiff, and counsel is presently investigating such counterclaims, which will
likely be added to the lawsuit in the near future.

         Michelin North America, Inc. v. Professional Transportation Group Ltd.,
Inc., Case No. 2000A854-5, State Court of Cobb County, Georgia. Plaintiff filed
suit in February 2000, seeking $56,373.19 allegedly past due on account for
goods sold, plus interest. The time for the Company to file an answer has not
yet run, and the Company is attempting to negotiate a settlement with Plaintiff.

         International Container Express, Inc. v. Truck-Net, Inc., Case No.
99L14111, Circuit Court of Cook County, Illinois. Plaintiff filed suit in
December 1999, seeking recovery of $98,020.77


                                       14
<PAGE>   15


allegedly owed by the Company's subsidiary, Truck-Net, Inc. for services
rendered. Truck-Net, Inc. has retained counsel in Illinois to defend the matter.
The answer is not yet due. The amounts owed are disputed and the Company has
several counterclaims which it intends to assert. Settlement discussions are
ongoing.

         The Company is not a party to any other material legal proceedings.


ITEM 2.  PROPERTIES

         See the information provided in Item 1 above entitled "Business --
Properties" for information with respect to the Company's facilities.

ITEM 3   LEGAL PROCEEDINGS

         See the information provided in Item 1 above entitled "Business --
Litigation" for information with respect to the Company's material legal
proceedings.

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

         No matter was submitted to a vote of the Company's security holders
during the fourth quarter of the year ended December 31, 1999.


                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

         (a) The Company's Common Stock and Redeemable Common Stock Purchase
Warrants (the "Warrants") are traded on the Nasdaq Small Cap Market under the
symbols "TRUC" and "TRUCW," respectively. The reported high- and low-bid and ask
prices for the Common Stock and the Warrants are shown below for the period from
June 19, 1997 (the date of the Company's initial public offering):


                                       15
<PAGE>   16


<TABLE>
<CAPTION>
                                                                          Common Stock
                                                               ------------------------------

                                                                High                    Low
                                                               ------                  ------

<S>                                                            <C>                     <C>
1999
----

First Quarter ...............................                   $3.25                   $1.00
Second Quarter ..............................                    2.38                    1.13
Third Quarter ...............................                    1.75                    0.88
Fourth Quarter ..............................                    2.00                    0.31

1998
----

First Quarter ...............................                   $4.09                   $2.50
Second Quarter ..............................                    3.31                    2.75
Third Quarter ...............................                    2.44                    1.06
Fourth Quarter ..............................                    3.25                    1.53
</TABLE>

<TABLE>
<CAPTION>
                                                                            Warrants
                                                               ------------------------------

                                                                High                    Low
                                                               ------                  ------

<S>                                                            <C>                     <C>
1999
----

First Quarter ...............................                   $0.47                   $0.22
Second Quarter ..............................                    0.47                    0.13
Third Quarter ...............................                    0.38                    0.19
Fourth Quarter ..............................                    0.38                    0.19

1998
----

First Quarter ...............................                   $0.70                   $0.38
Second Quarter ..............................                    0.69                    0.38
Third Quarter ...............................                    0.50                    0.16
Fourth Quarter ..............................                    0.41                    0.22
</TABLE>

         The last reported sale price of the Company's Common Stock and Warrants
as of April 12, 2000 was $4.00 per share and $1.00 per Warrant, as reported by
Nasdaq. The prices represented above are bid and ask prices which represent
prices between broker-dealers, do not include retail mark-ups, mark-downs or any
commissions to broker-dealers and do not reflect prices in actual transactions.
As of April 12, 2000, there were approximately 40 record owners (for over 400
beneficial owners) of Common Stock and four record owners of Warrants.

         The Company intends to retain any future earnings for the operation and
expansion of its business and does not anticipate paying any cash dividends in
the foreseeable future. Any future determination as to the payment of cash
dividends will depend upon a number of factors,


                                       16
<PAGE>   17


including the Company's earnings, capital requirements, financial condition and
other factors considered relevant by the Company's Board of Directors. In
addition, the terms of the Company's Amended and Restated Commercial Loan
Agreement with SouthTrust Bank, N.A. and other agreements restrict the Company's
ability to declare or pay dividends.

ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA

         The following selected consolidated financial data are qualified by
reference to, and should be read in conjunction with the Consolidated Financial
Statements and the related Notes thereto and other financial information
included elsewhere in this Annual Report, as well as "Management's Discussion
and Analysis of Financial Condition and Results of Operations" in Item 7 below.
The selected consolidated financial data of the Company for the years ended
December 31, 1995, 1996, 1997 and 1998 were derived from the Company's
Consolidated Financial Statements, which were audited by Arthur Andersen LLP,
independent public accountants. The selected consolidated financial data for the
year ended December 31, 1999 were derived from the Company's Consolidated
Financial Statements, which have been audited by Yohalem, Gillman & Company,
independent public accountants. These results may not be indicative of future
results.

<TABLE>
<CAPTION>
                                                                             YEARS ENDED DECEMBER 31,
                                                  -------------------------------------------------------------------------------
                                                      1995             1996             1997             1998             1999
                                                  -----------      -----------      -----------      -----------      -----------
                                                                         (IN THOUSANDS, EXCEPT SHARE DATA)
<S>                                               <C>              <C>              <C>              <C>              <C>
STATEMENTS OF OPERATIONS DATA:
Operating revenues ..........................     $    17,485      $    21,172      $    43,065      $    55,067      $    41,356
Total operating expenses ....................          17,705           20,630           44,587           55,879           42,492
Operating income (loss) .....................            (220)             542           (1,523)            (812)          (2,135)
Other income (expense), net .................             (30)            (221)              (1)          (2,686)            (759)
Income (loss) before provision for
   income taxes .............................            (250)             321           (1,524)          (3,498)          (2,895)
Provision (benefit) for income taxes ........             (95)             137              246               --               --
Net income (loss) ...........................            (155)             184           (1,770)          (3,498)          (2,895)
Basic and diluted net income (loss) per
common share(5) .............................           (0.06)            0.06            (0.54)           (0.90)           (0.67)
Weighted average common shares
   outstanding ..............................       2,500,000        3,281,862        3,273,932        3,867,883        4,301,507
</TABLE>

<TABLE>
<CAPTION>
                                                                                 AS OF DECEMBER 31,
                                                  -------------------------------------------------------------------------------
                                                      1995             1996             1997             1998             1999
                                                  -----------      -----------      -----------      -----------      -----------
<S>                                               <C>              <C>              <C>              <C>              <C>
BALANCE SHEET DATA:
Cash and cash equivalents ...................     $        17      $       248      $     1,423      $     1,004      $       199
Working capital (deficit) ...................            (385)             354             (388)          (4,565)          (6,192)
Total assets ................................           4,016            5,346           21,450           19,819           17,486
Long-term debt ..............................           1,523            1,187            3,057            4,269            3,841
Shareholders' (deficit) equity ..............            (305)              (1)           4,036              859             (418)
</TABLE>


                                       17
<PAGE>   18
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

         The following analysis of the Company's financial condition as of
December 31, 1999, and the Company's results of operations for the years ended
December 31, 1997, 1998 and 1999, should be read in conjunction with the
Company's Consolidated Financial Statements and notes thereto included elsewhere
in this Annual Report. The following discussion contains forward-looking
statements that involve risk and uncertainties. The Company's actual results may
differ significantly from the results discussed in the forward-looking
statements. The financial information listed below has been rounded in order to
simplify its presentation. However, the percentages provided below are
calculated using the detailed financial information contained in the
Consolidated Financial Statements, the notes thereto and the other financial
data included elsewhere in this Annual Report.

OVERVIEW

         Through December 31, 1996 the Company, Timely and Truck-Net operated as
three separate entities. At such time, Dennis A. Bakal, the Company's the
majority stockholder and sole director owned all of the shares of Timely and
Truck-Net. Effective January 1, 1997, Mr. Bakal contributed his ownership in
Timely and Truck-Net to the Company, along with his ownership of another entity,
a previously inactive company. On June 19, 1997, the Company completed its
initial public offering, which resulted in net proceeds to the Company of
approximately $5.7 million.

         On December 3, 1999, the Company's majority shareholder, Chief
Executive Officer, President and director, Dennis A. Bakal, entered into an
agreement with Logistics Management, L.L.C., a Kentucky limited liability
company ("Logistics"), under which Mr. Bakal sold to Logistics all 2.5 million
shares of common stock owned by him. At the time, the purchase comprises
approximately 56% of the outstanding voting shares of the Company. The purchase
price for the shares was $3 million and included a $500,000 loan to Mr. Bakal,
which by the terms of the agreement Mr. Bakal contributed to the Company as a
capital contribution. Logistics is a controlling shareholder in U.S. Trucking,
Inc. (OTC: USTK).

         Timely, organized in 1991, performs contract truckload ground
transportation services primarily for customers in the air freight and expedited
delivery markets. In November 1995, Timely entered into an agreement to perform
trucking services for FedEx and became one of FedEx's eight core carriers. Under
the core carrier concept, a limited number of carriers are selected by a shipper
to provide scheduled services between points for a contractually determined
period of time. Such agreements specify routes, pricing (normally determined by
route), equipment specifications and performance standards. In addition, such
agreements generally provide for pricing adjustments based on fuel pricing or
changes in cost structure at predetermined times. For the years ended December
31, 1999, 1998 and 1997, FedEx accounted for approximately 40.9%, 32.7% and
41.2%, respectively, of the consolidated operating revenues of the Company.
Since the inception of the agreement, the Company has consistently exceeded the
required performance standards under the agreement, and management anticipates
the renewal of the agreement when it expires in May 2000. Although the Company
is currently in discussions with Fedex, there can be no assurance, however, that
this agreement will be renewed.

         In developing its niche in the industry, Timely has concentrated, since
January 1994, on the contract carriage of truckload freight for the air freight
and expedited delivery markets. By concentrating in these markets, the Company
has eliminated the need for terminals and has been able to focus its efforts on
acquiring equipment and recruiting drivers and other personnel.

                                       18
<PAGE>   19

         In October 1997, the Company organized Timely North in order to enter
into a marketing agreement (the "Marketing Agreement") with Continental American
Transportation, Inc. ("Continental"). Under that agreement, Timely North, on
November 1, 1997, leased or sub-leased from Continental and its two main
operating subsidiaries, Carpet Transport, Inc. and Blue Mack Transport, Inc.,
(collectively "CTI"), substantially all of their operating assets and terminals.
In addition, all of the employees of CTI were hired by Timely North effective
November 1, 1997.

         Under the Marketing Agreement, Timely North would service the former
customers of CTI, pay fair market value rent for the equipment and facilities of
CTI and pay to CTI a commission on all retained business for the period from
November 1, 1997 to July 31, 1998. The Marketing Agreement also granted Timely
North the exclusive option to acquire substantially all of CTI's assets for a
period which expired on July 31, 1998. The Marketing Agreement terminated on
July 31, 1998. The primary business of CTI was the truckload and
less-than-truckload ("LTL") cartage of carpet from the manufacturing facilities
located in north Georgia to customers primarily located in the eastern and
southern United States. The business was headquartered in Calhoun, Georgia, the
heart of the carpet manufacturing industry in the United States, and served most
of the major carpet mills. The movement of carpet is primarily a one direction
movement with most of the carpet movement being outbound from north Georgia,
making it necessary to find sufficient back-haul business to bring the trucks
back to Georgia at the lowest possible cost. CTI operated 17 remote terminals to
handle the LTL freight it received from the mills. These terminals were located
in 10 states. On November 1, 1997 Timely North began operating these terminals
and began an analysis of the LTL business. In January 1998, Timely North
announced a substantial rate increase to its LTL customers in an attempt to
bring this part of the operation to a profitable level. On March 27, 1998,
Timely North entered into an agreement with CSI/Crown, Inc. ("CSI/Crown"), an
industry competitor and subsidiary of US Xpress Enterprises, Inc., under which
Timely North terminated its LTL operations as of April 1, 1998 and used its
reasonable best efforts to persuade the LTL customers to transfer their business
to CSI/Crown. At the time of termination, all LTL terminals were closed,
employees terminated and equipment and records prepared for return to the
Calhoun location. All terminal location leases were either leased by CTI or are
owned by a former subsidiary of Continental. Neither the Company nor Timely
North is a party to any of the leases or finance contracts entered into by CTI
or Continental.

         During the second quarter of 1998, the Company consolidated the
operations of Timely and Timely North which allowed it to eliminate duplicative
functions and permitted the free interchange of drivers and equipment between
fleets. The Company believes that this consolidation has improved customer
service, lowered "deadhead" miles and lowered its operating costs.

         Truck-Net, a licensed freight broker, performs truckload brokerage
services in the same air freight and expedited delivery markets served by
Timely. As a broker, Truck-Net matches a shipper with a specific routing and/or
equipment need with a carrier able to satisfy the shipper's particular
requirements. All carriers used by Truck-Net are required to be properly
certificated and to have a current certificate of insurance. When logistically
feasible, Truck-Net utilizes Timely's equipment to complete the brokerage
contracts. During the year ended December 31, 1999, Truck-Net was able to
utilize Timely's equipment for approximately 35% of its shipments.


                                       19
<PAGE>   20

         Truck-Net offers its services to customers on a contract basis. Some of
its services provide specific scheduled runs for a definite time period, and
others provide deliveries on an as needed basis by the shipper. Truck-Net's
largest customer, Panalpina, the U.S. subsidiary of a major European air freight
forwarder, accounted for approximately 8%, 10% and 13% of the Company's
consolidated operating revenues for the years ended December 31, 1999, 1998 and
1997, respectively. In August 1999, Panalpina began providing these services on
its own and the relationship with the Company was significantly reduced.

RESULTS OF OPERATIONS

         Year Ended December 31, 1999 compared to year ended December 31, 1998

         Associated with the change in control of the Company in December 1999
and an assessment of the Company's financial condition, management proposed that
the following transactions be recorded in the fourth quarter of 1999: to fully
reserve and write-off approximately $1.2 million of 1998 accounts receivable;
and of $2.1 million of sales that, upon review by management, were determined to
have been inappropriately recorded during the first nine months of 1999. This
aggressively conservative approach is consistent with management's current
policies. The Company is unable to determine the amount of any future recoveries
that may be made against these write-offs.

         Consolidated operating revenues were $41.4 million for the year ended
December 31, 1999 compared to $55.1 million for the same period in 1998, a 24.9%
decrease. The operations of Timely North were discontinued in the second quarter
of 1998 and the Company continued to service Timely North's customers in the
carpet industry through Timely. During 1999 the Company discontinued service in
the carpet segment, except for a few select customers. The loss of carpet
revenue was partially offset by the introduction of the Company's agency program
which began in April 1999. Consolidated revenues were further reduced in 1999 by
the reduction in sales from Truck-Net's largest customer, Panalpina, and the
reversal of sales discussed above. Timely accounted for approximately $34.5
million, or 83.5% of the Company's revenues ($36.5 million, or 66.2%, in 1998).
Included in the 1999 revenue for Timely is approximately $2.3 million of sales
from the Company's agency program. Truck-Net accounted for approximately $6.3
million, or 15.1%, of the Company's revenues ($7.9 million, or 14.4%, in 1998),
PTG accounted for approximately $563,000, or 1.4%, of the Company's revenues
($584,000, or 1.1%, in 1998). In 1998 Timely North reported approximately $10.1
million in revenues, or 18.3% of the Company's consolidated revenue.

         The Company's operating expenses were $43.5 million for the year ended
December 31, 1999 compared to $55.9 million in 1998, a 28.5% decrease, primarily
as the result of the decrease in revenues and the increased provision for
uncollectible accounts described above. The Company's operating expenses consist
primarily of the direct costs attributable to operation of the Company's
equipment including driver payroll and related costs, fuel, equipment rental,
etc., and in the case of Truck-Net, the cost of purchased transportation. Timely
recorded approximately $35.8 million, or 82.3% of the Company's operating
expenses ($35.4 million, or 63.4%, in 1998), Truck-Net recorded approximately
$5.7 million, or 13.0% of operating expenses ($7.5 million, or 13.5% in 1998),
PTG recorded approximately $954,000, or 2.0% of operating expenses ($1.6
million, or 2.8%, in 1998) and Timely North reported approximately $1.1 million,
or 2.5%, of the Company's operating expenses ($11.4 million, or 20.3% in 1998).

         Net non-operating expenses were approximately $759,000 in 1999 compared
to $2.7 million in 1998 due to a $1.8 million charge related to the termination
of Timely North operations in 1998. Interest expense declined 18.0% to
approximately $1.1 million for the year ended December 31, 1999 from $1.3
million in the previous year, primarily as the result of retirement of long-term
debt in 1999 and a $141,000 charge related to the issuance of convertible
debentures in 1998.

         No income tax expense has been recognized for the years ended December
31, 1999 or 1998 due to available net operating loss carryforwards.

         The Company's net loss was $2.9 million, or (0.67 cents per share) and
$3.5 million, or (0.90 cents per share) for the years ended December 31, 1999
and 1998 respectively.


                                       20
<PAGE>   21

         Year Ended December 31, 1998 compared to Year Ended December 31, 1997

         The Company's operating revenues increased 27.9%, or $12.0 million, to
$55.1 million for the year ended December 31, 1998 from $43.1 million for the
same period last year, primarily due to increases in business from Timely's core
accounts and revenues generated from an expanded customer base. Timely accounted
for approximately $36.5 million, or 66.2%, of the Company's revenues ($25.3
million, or 58.8%, in 1997), Truck-Net accounted for approximately $7.9 million,
or 14.4%, of the Company's revenues ($8.7 million, or 20.1%, in 1997), Timely
North accounted for approximately $10.1 million, or 18.3%, of the Company's
revenues ($8.2 million, or 19.0%, in 1997), and PTG accounted for approximately
$584,000, or 1.1%, of the Company's revenues ($902,000, or 2.1%, in 1997). The
Company terminated the operations of Timely North in April 1998.

         The Company's operating expenses increased 25.3%, or $11.3 million, to
$55.9 million for the year ended December 31, 1998 from $44.6 million for the
same period of 1997, primarily as the result of costs associated with increased
revenues discussed above. Timely accounted for approximately $35.4 million, or
63.4%, of the Company's operating expenses ($24.8 million, or 55.6%, in 1997),
Truck-Net accounted for approximately $7.5 million, or 13.5%, of the Company's
operating expenses ($8.2 million, or 18.6%, in 1997), Timely North accounted for
approximately $11.4 million or 20.3 % of the Company's operating expenses ($10.1
million, or 22.5%, in 1997), and PTG accounted for approximately $1.6 million,
or 2.8%, of the Company's operating expenses ($1.5 million, or 3.3%, in 1997).

         Net non-operating expense increased $2.7 million for the calendar year
of 1998 compared to the same period in 1997. During 1998, the Company recorded
approximately $1.8 million in nonrecurring charges related to its terminated
marketing agreement with CTI. Interest expense increased approximately $1.0
million in the year ended December 31, 1998 compared to the same period in 1997.
This increase was the result of (i) borrowings under the Company's lines of
credit during the last quarter of 1997, (ii) new financing related to the
purchase of equipment in lieu of leasing and (iii) the recognition of $141,000
of nonrecurring interest expense related to the issuance in December 1998 of
convertible debentures. The above expenses were partially offset by a $100,000
increase in other income

         During the first quarter of 1997, the Company recognized a tax
provision of $246,000 which is a one-time charge related to the termination of
the S corporation election of the Company and certain of its subsidiaries and
represents the recognition of deferred tax liabilities attributable to these
entities, which treatment is mandated by SFAS Statement No. 109, "Accounting for
Income Taxes". No tax benefit was recognized for consolidated losses incurred
during 1997 and 1998 as it is not probable that such benefits will be realized
by the Company. The losses will be carried forward to offset taxable income in
future periods.

         The Company's net loss increased approximately $1.7 million to $3.5
million for the year ended December 31, 1998 compared to $1.8 million for the
comparable period of 1997. Losses from the operations of Timely North combined
with costs incurred to discontinue those operations and costs related to the
termination of the marketing agreement with CTI amounted to approximately $3.3
million in 1998.

LIQUIDITY AND CAPITAL RESOURCES

         The Company had negative working capital of approximately $6.2 million
at December 31,1999 compared to a working capital deficit of approximately $4.6
million at December 31, 1998. Cash and cash equivalents decreased by
approximately $1.1 million, accounts receivable decreased $1.2 million and


                                       21
<PAGE>   22

other current assets declined $485,000. A $262,000 reduction in current
liabilities was the result of a $929,000 reduction in accounts payable and
accrued liabilities, a $201,000 repayment of the Company's line of credit and a
$75,000 decrease in current maturities of long-term debt.

         Net cash used in operating activities was approximately $1.3 million
for the year ended December 31, 1999, compared to net cash provided of
approximately $925,000 for the year ended December 31, 1998. This decrease in
cash flow from operations arose primarily from a $1.2 million reduction in trade
accounts receivable compared to a decrease in accounts receivable of $3.3
million in 1998. Cash used in investing activities was approximately $920,000 in
1999 compared to $3.1 million in 1998. This decrease was primarily due to the
acquisition of approximately $2.9 million of property and equipment in 1998.
Cash provided by financing activities was $1.1 million in 1999 compared to $1.8
million in 1998.

         The Company has available a combined $9.0 million line of credit with a
lending institution to provide for the Company's working capital and letter of
credit requirements. The loan is guaranteed by the Company's principal
shareholder and bears interest at a rate equal to 0.75% above the bank's base
rate (as defined in the agreement). At December 31, 1999, the Company had $6.5
million outstanding under the line of credit with no availability remaining
pursuant to the terms of the agreement. The Company is currently renegotiating
the renewal terms of this facility, which matured on March 31, 2000. The Company
anticipates extending the current facility or entering into new arrangements
with the bank or another lending institution. However, there can be no assurance
that the Company will be able to further extend or enter into new arrangements
with the bank or another lending institution on terms favorable to the Company,
if at all, which might necessitate that the Company raise additional funds
through the issuance of equity or convertible debt securities. Pursuant to the
loan agreement with the bank, the Company must satisfy certain financial and
other covenants. As of December 31, 1999, the Company was in default under
several non-monetary covenants. The Company has requested from the bank
waivers of compliance with these covenants.

         The Company believes that the operating changes instituted since April
1998 will assist in improving its cash flow from operations. The Company
believes that this along with (1) funds from its existing lines of credit, if
extended or otherwise renewed or replaced, (2) funds received from the sale of
equity securities or from the exercise of outstanding options and/or warrants
during December 1999 and to date during 2000, and (3) funds which the Company
expects to receive from the exercise of its publicly-traded warrants resulting
from the anticipated formal call of these warrants (which the Company hopes to
send by April 30, 2000) will be sufficient to satisfy its contemplated cash
requirements over the next 12 months. The Company's financial requirements will
depend upon, among other things, the growth rate of the Company's business, the
amount of cash generated by operations, any acquisitions the Company might make
and the Company's ability to borrow funds or enter into lease or purchase
financing arrangements for the acquisition of new equipment or for working
capital purposes. Should the Company require additional debt or equity financing
to support its operations or to make acquisitions, there can be no assurance
that such additional financing will be available to the Company on commercially
reasonable terms, or at all. As a result of these factors, the Company's
independent public accountants have added an explanatory paragraph to their
report on the Company's December 31, 1999 financial statements which makes
reference to the uncertainties regarding the Company's ability to continue as a
going concern. These statements are "forward-looking" statements which are
subject to the risks and uncertainties discussed above.


                                       22
<PAGE>   23


INFLATION

         Inflation has not had a material effect on the Company's operations. If
inflation increases, the Company will attempt to increase its rates to offset
its increased expenses. No assurances can be given, however, that the Company
will be able to adequately increase its prices in response to inflation.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT RISK NOT APPLICABLE

         The Company does not use derivative financial instruments in its
operations or investments. The Company is exposed to market risk from changes in
interest rates. At December 31, 1999, the fair value of the Company's total
variable rate debt was estimated to be $10.8 million. At this borrowing level, a
hypothetical 10% adverse change in interest rates on the debt would increase
interest expense and decrease income before income taxes by approximately
$102,000.

         The above market risk discussion and the estimated amounts presented
are "forward-looking" statements of market risk based on the assumed occurrence
of certain adverse market conditions. Actual results in the future may differ
materially from those projected due to actual developments in the market.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The consolidated financial statements of the Company as of December 31,
1999 and for the three years in the period ending December 31, 1999, together
with the report of Yohalem, Gillman & Company, dated April 11, 2000, appear on
pages F-1 to F-32 herein.


ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURES

         As reported in its current report on Form 8-K dated March 3, 2000, the
Company and Arthur Andersen LLP mutually agreed to terminate the engagement of
Arthur Andersen to audit the Company's 1999 financial statements. As reported in
the report, the Company had no disagreements on accounting or financial
disclosure matters with Arthur Andersen.


                                       23
<PAGE>   24


                                    PART III

         Certain information required by Part III is omitted from this Annual
Report in that the Registrant will file a definitive Proxy Statement pursuant to
Regulation 14A of the Securities Exchange Act of 1934 (the "Proxy Statement")
not later than 120 days after the end of the financial year covered by this
Annual Report, and certain information included therein is incorporated herein
by reference.


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

EXECUTIVE OFFICERS AND DIRECTORS

         The executive officers and directors of the Company and their ages as
of April 12, 2000 are as follows:

<TABLE>
<CAPTION>

     NAME                                  AGE            POSITION
     ----                                 -----           --------
     <S>                                  <C>             <C>
     W. Anthony Huff                       38             Chairman and Director
     Dennis A. Bakal .............         55             Chief Executive Officer and President, Director
     Linda K. Roberts.............         52             Vice President/Administration and Secretary
     Susan P. Dial................         54             Chief Financial Officer
     William M. Kelly.............         52             Vice President/Transportation
     Stanley E. Laiken............         58             Vice President/Sales
     William R. Asbell, Jr.                47             Vice President and General Counsel
     Robert E. Altenbach (1)(2)...         53             Director
     Gregory G. Hardwick(1)(2)....         52             Director
     Danny L. Pixler                       51             Director
</TABLE>

---------------
(1)      Member of Compensation Committee.
(2)      Member of Audit Committee.


         Mr. Huff has been a director and Chairman of the Company since December
3, 1999. Mr. Huff has served as Executive Vice President and Chairman of the
Board of U.S. Trucking, Inc. since September 8, 1998. He has provided various
administrative services to U.S. Trucking-Nevada since February 1997 and has
served as Executive Vice President and a director since May 1998. He has also
provided various services to Gulf Northern since March 1995 and he has served as
a director since February 1996 and as Vice President since June 1998. Mr. Huff
has also served as Vice President and Assistant Secretary of Mencor since June
1998. From approximately November 1995 until January 1997, he served as
President and a director of United Acquisition Corp. II, a company formed to
acquire companies in the trucking business. From February 1992 until December
1996, Mr. Huff served as President of the North American Trucking Association,
an association of independent truckers engaged in the business of providing
administrative and financial services to its members. Mr. Huff spends
approximately 50% of his time on the Company's business and the remainder of his
time consulting with various other companies.


                                       24
<PAGE>   25

         Due to a large judgment awarded against Mr. Huff in 1994 resulting from
Mr. Huff's guaranty of a defaulted bank loan for a company of which he was a
shareholder, Mr. Huff filed for personal bankruptcy under Chapter 7 of the U.S.
Bankruptcy Code in 1994 (discharge granted in 1995). Corporate Insurance
Services, a company of which Mr. Huff was President and an owner, was also a
guarantor of this debt and filed for bankruptcy at this time (Chapter 11
converted to Chapter 7). Mr. Huff was a minority shareholder and provided
services to the company (KHW Foods, Inc.) relating to store location and
development, but was not otherwise involved in management of the company.

         Mr. Bakal is President and Chief Executive Officer of the Company. From
1990 until December 3, 1999, Mr. Bakal served as a director of the Company. On
April 10, 2000, Mr. Bakal was reappointed to the Board of Directors. His career
in the airfreight industry began over 30 years ago and includes all operational,
marketing and sales aspects associated with the business. Immediately prior to
founding the Company in 1990, he was the President and Chief Executive Officer
of LEP Profit, responsible for its North and South American marketing and
operations.

         Mr. Bakal joined Profit Freight Systems ("Profit") in 1973 and
progressed from District Manager to Regional Manager, Regional Vice President,
Vice President of Operations and Senior Vice President. During this period, he
was a leader in the development, implementation and selling of the company's
successful pharmaceutical distribution program between Puerto Rico and the
United States. In 1983, Mr. Bakal was promoted to Chief Operating Officer of
Profit. In 1984, he was named President and in 1988 he was named Chief Executive
Officer. He directed the company's successful merger with the British-based LEP
Group, one of the world's largest international freight forwarding companies.
Mr. Bakal served on the LIM (LEP International Management) Board of Directors
and was responsible for all LEP Group companies in North and South America.

         In 1978, Mr. Bakal received the Air Cargo News Achievement of the Year
Award for his outstanding industry contribution. He has served as an Air Cargo
World Magazine advisory board member and Vice President of the Air Freight
Association since July 1987 and was appointed to their Board of Directors in
July 1988. Mr. Bakal graduated from the New York Institute of Technology with a
degree in Business Science in 1966.

         Ms. Roberts co-founded the Company with Mr. Bakal and is currently Vice
President/Administration and Secretary of the Company. Ms. Roberts served as a
director of the Company from July 1997 until December 1999. Her career in the
airfreight industry began over 16 years ago and includes all administrative,
operations and marketing aspects associated with the business. Immediately prior
to joining the Company, she was Assistant to the Chief Executive Officer of
Profit. She joined Profit in June 1980 and progressed from various
administrative and staff jobs to become Assistant to the Chief Executive
Officer. During this period, Ms. Roberts was involved in the implementation of
various sales, as well as internal, programs for the company.

         Ms. Dial is Chief Financial Officer of the Company. Ms. Dial served as
a director of the Company from February 1999 until December 1999. Ms. Dial
joined the Company as Controller in 1997. Ms. Dial has more than 25 years of
accounting and finance experience in the transportation industry. From 1984 to
1994, Ms. Dial served as Assistant Vice President and Controller for Atlantic
Southeast Airlines, Inc. Ms Dial is a former board member and President of the
Atlanta Chapter of the Institute of Management Accountants. Ms. Dial is a
graduate of Georgia State University.

         Mr. Kelly is Vice President/Transportation of the Company and is in
charge of the day-to-day operations of the Company and is also responsible for
federal and state regulatory compliance, safety and


                                       25
<PAGE>   26

maintenance programs, equipment acquisition and logistics planning. Immediately
prior to joining the Company in November 1991, he was Vice President of Wayne
Systems, in charge of operations. Prior to joining Wayne Systems, he was General
Manager for Pinto Trucking, where he was responsible for regulatory compliance
and the complete operations of a fleet in excess of 200 tractors.

         Mr. Laiken, a 1963 graduate of Pratt Institute with a Bachelor of
Engineering degree, is Vice President/ Sales of the Company. Immediately prior
to joining the Company in February 1993, Mr. Laiken was Vice President/National
Accounts with Profit and had also served Profit as Operations Manager, Regional
Vice President and Vice President/Agent Development. Prior to joining Profit in
1974, Mr. Laiken was employed by Johns-Manville Corporation in various
capacities including Traffic Manager and Physical Distribution Manager.

         Mr. Asbell has served as Vice President and General Counsel for the
Company since March 2000. Mr. Asbell had been in the private practice of law
from his graduation in June 1980 until March 2000. From April 1996 until
February 2000, Mr. Asbell was a partner in the Atlanta office of the law firm of
Nelson Mullins Riley & Scarborough, L.L.P. From February 1994 until April 1996,
Mr. Asbell was a partner in the law firm of Swift, Currie, McGhee & Hiers. Mr.
Asbell graduated from the University of Georgia School of Law in 1980.

         Mr. Altenbach is a partner in the Atlanta office of the law firm Kutak
Rock. He is the former General Counsel, Secretary and a member of the Senior
Management Team of Vista 2000, Inc., a publicly-traded consumer products
company. He is a former partner of the Johnson & Montgomery law firm, which
merged with Chamberlain, Hrdlicka, White, Williams & Martin. Mr. Altenbach's law
practice is primarily in the areas of corporate, finance and securities, having
represented a number of public and private service and investment firms in
financings, work-outs and restructurings and underwriters that concentrate on
private placements and initial public offerings. Mr. Altenbach has practiced law
in Atlanta since 1972 after receiving undergraduate and law degrees from the
University of Tennessee. Mr. Altenbach was a founding partner of the law firm of
Somers & Altenbach, organized in 1974 and which dissolved in 1990.

         Mr. Hardwick has been a Certified Public Accountant in public practice
since 1974. Mr. Hardwick has been a director of the Company since 1997. Mr.
Hardwick received a Bachelor of Science degree in Accounting from Miami (Ohio)
University in 1970.

         Mr. Pixler has been a director of the Company since December 3, 1999.
Mr. Pixler has served as the President, CEO and a director of U.S.Trucking, Inc.
since September 8, 1998, when it completed the acquisition of U.S.
Trucking-Nevada. He has served as President, Secretary and Treasurer of U.S.
Trucking-Nevada since February 1997, and as a director since May 1998. He served
as Vice President and a director of Mencor from March 1994 until July 1998 when
he became President. He has served as President, CEO and director of Gulf
Northern since March 1995. From January 1993 until March1994, he served as
President of Joseph Land Group (a transportation company with annual sales of
approximately $130 million). From 1989 until 1993, he served as President of
Apple Lines, Inc., a truckload refrigerated carrier with $16 million in
revenues. From 1983 until 1989, he was employed by D.F.C. Transportation, the
transportation division of Dean Foods, Inc., where his final position was
Executive Vice President and General Manager responsible for the company's
truckload division with annual sales of $80 million.

         Mr. Bakal and Mr. Laiken are brothers-in-law.


                                       26
<PAGE>   27


COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934

         Section 16(a) of the Exchange Act requires the Company's executive
officers and directors and persons who beneficially own more than 10% of a
registered class of the Company's equity securities to file reports of
securities ownership and changes in such ownership with the SEC and Nasdaq.
Officers, directors and greater than 10% beneficial owners also are required by
rules promulgated by the SEC to furnish the Company with copies of all Section
16(a) forms they file. Based solely on review of the copies of such reports
furnished to the Company and written representations that no other reports were
required, the Company believes that, during the year ended December 31, 1999,
its executive officers, directors and greater than 10% beneficial owners
complied with all applicable Section 16(a) filing requirements.

ITEM 11. EXECUTIVE COMPENSATION

      The following table summarizes the compensation paid or accrued by the
Company for services rendered during the years indicated to the Company's Chief
Executive Officer. No other executive officer's total salary and bonus exceeded
$100,000 during the year ended December 31, 1999. The Company did not grant any
stock appreciation rights or make any long-term incentive plan payouts during
the periods shown.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>

                                                                                           LONG-TERM
                                                                                          COMPENSATION
                                                       ANNUAL COMPENSATION                   AWARDS
                                          -------------------------------------------    ----------------
                                                                           OTHER           SECURITIES             ALL
                                                                           ANNUAL           UNDERLYING           OTHER
                                YEAR      SALARY($)     BONUS($)(1)     COMPENSATION     OPTIONS/SARS (2)    COMPENSATION ($)
                                ----      ---------     -----------     ------------     ----------------    ----------------
<S>                             <C>       <C>           <C>             <C>              <C>                 <C>
Dennis A. Bakal
  Chairman of the Board and
  Chief Executive Officer....   1999        300,000          ---          23,101(3)              ---                 ---
                                1998        300,000          ---          16,488(4)              ---                 ---
                                1997        150,000          ---          25,231(5)          250,000                 ---

</TABLE>

--------------------
(1)  Bonuses for each year include amounts earned for that year, even if paid in
     the subsequent year, and exclude bonuses paid during that year but earned
     for a prior year.
(2)  All figures in this column reflect options to purchase shares of Common
     Stock.
(3)  Consists solely of payments made on Mr. Bakal's automobile.
(4)  Includes $14,568 for payments made on Mr. Bakal's automobile and $1,920 for
     country club dues.
(5)  Includes $9,811 for payments made on Mr. Bakal's automobile, $13,500 for a
     country club membership and $1,920 for country club dues.

         OPTION GRANTS IN LAST FISCAL YEAR

         There were no grants of options to the Company's Chief Executive
Officer during 1999.

AGGREGATED OPTION EXERCISES AND YEAR-END OPTION VALUES

         The following table sets forth the number of options and the value of
options held by the named executive officer as of December 31, 1999.


                                       27
<PAGE>   28



              AGGREGATE OPTION/SAR EXERCISE IN LAST FISCAL YEAR AND
                          FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>

                                                 NUMBER OF UNEXERCISED
                                                 SECURITIES UNDERLYING                  VALUE OF UNEXERCISED
                                                OPTIONS AT FISCAL YEAR                 IN-THE-MONEY OPTIONS AT
                                                        END (#)                        FISCAL YEAR END ($)(1)
                                            --------------------------------       --------------------------------
NAME                                        EXERCISABLE       UNEXERCISABLE        EXERCISABLE       UNEXERCISABLE
----                                        -----------       -------------        -----------       -------------
<S>                                         <C>               <C>                  <C>               <C>
Dennis A. Bakal.........................      1,000,000              -                 $937,500             -
</TABLE>

-------------------
(1)  The closing price of the Common Stock on the Nasdaq SmallCap Market on
     December 31, 1999 was $1.75 per share.

EMPLOYMENT AGREEMENTS

         Bakal Agreement. On April 1, 1997, Mr. Bakal and the Company entered
into an employment agreement (the "Bakal Agreement") pursuant to which he will
serve as the Chief Executive Officer and President of the Company. The Bakal
Agreement provides that Mr. Bakal will receive a base salary of not less than
$300,000 per year and an annual bonus as determined by the Compensation
Committee based upon achievement of targeted levels of performance and such
other criteria as the Compensation Committee shall establish from time to time.
In addition, he may participate in the Company's 1996 Stock Option Plan (the
"Plan"), and will receive health insurance for himself and his dependents,
long-term disability insurance, civic and social club dues, use of an automobile
owned or leased by the Company and other benefits of similarly situated
employees. Mr. Bakal's base salary may be increased upon a periodic review by
the Board of Directors or the Compensation Committee. The Bakal Agreement has a
term of three years and renews daily until either party fixes the remaining term
at three years by giving written notice. The Company can terminate Mr. Bakal's
employment upon his death or disability or for cause, and Mr. Bakal can
terminate his employment for any reason within a 90-day period beginning on the
30th day after any occurrence of any change in control or within a 90-day period
beginning on the one-year anniversary of the occurrence of any change of
control. If Mr. Bakal's employment is terminated by the Company in breach of the
Bakal Agreement or if Mr. Bakal terminates the Bakal Agreement for any reason
after a change in control, the Company must pay Mr. Bakal one-twelfth of his
annual base salary and bonus for each of 36 consecutive 30-day periods following
the termination and must continue Mr. Bakal's life and health insurance until he
reaches 65, and Mr. Bakal's outstanding options to purchase Common Stock would
vest and become immediately exercisable.

         In the Bakal Agreement, the Company also granted Mr. Bakal, with
respect to his shares of Common stock, piggyback and, after any termination of
employment or if he is no longer a director of the Company, demand registration
rights . Under the Bakal Agreement, Mr. Bakal agrees to maintain the
confidentiality of the Company's trade secrets. Mr. Bakal agrees that for a
period of two years, if he is terminated for cause, not to compete with or
solicit employees or customers of the Company within the United States.

         Other Employment Agreements. On April 1, 1997, the Company entered into
employment agreements with each of Messrs. Kelly and Laiken and Ms. Roberts
(collectively, the "Other Agreements"). The Other Agreements provide for a
minimum base salary per year of $100,000, $88,650 and $100,000, respectively,
and an annual bonus as determined by the Chief Executive Officer and President
based upon achievement of targeted levels of performance and such other criteria
as he shall


                                       28
<PAGE>   29

establish from time to time. In addition, each employee may participate in the
Plan and will receive insurance and other benefits of similarly situated
employees. Each of the Other Agreements has a term of three years and renews
daily until either party fixes the remaining term at three years by giving
written notice. The Company can terminate each of the agreements upon death or
disability or for cause, and the employee can terminate employment for any
reason within one year of a change in control with adequate justification. If
the employee's employment is terminated by the Company for any reason within one
year after a change in control or if the employee terminates the agreement with
adequate justification, the Company must pay the employee one-twelfth of his or
her base salary and bonus for each of 36 consecutive 30-day periods following
the termination and must continue the employee's life and health insurance until
age 65, and the employee's outstanding options to purchase Common Stock would
vest and become immediately exercisable. Under the Other Agreements, each
employee agrees to maintain the confidentiality of the Company's trade secrets.
The employee also agrees for a period of one year, if he or she is terminated
for cause or resigns without adequate justification, not to compete with or
solicit employees or customers of the Company within the United States.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
         MANAGEMENT

         The following table sets forth certain information, as of April 12,
2000 with respect to the beneficial ownership of the Common Stock by: (i) each
director; (ii) each executive officer named in the Summary Compensation Table;
(iii) each shareholder known by the Company to be a beneficial owner of more
than 5% of the Common Stock; and (iv) all executive officers and directors as a
group. Unless otherwise indicated, each of the shareholders listed below
exercises sole voting and dispositive power over the shares.

<TABLE>
<CAPTION>

                                                                                    SHARES BENEFICIALLY
                                                                                         OWNED (1)
                                                                               -----------------------------
                                                                                 NUMBER            PERCENT
                                                                               ----------         ----------
<S>                                                                             <C>               <C>
Dennis A. Bakal(2)...................................................           1,300,000              15.8%
Robert E. Altenbach(3)...............................................               6,000                  *
Gregory G. Hardwick(4)...............................................              27,400                  *
Danny L. Pixler(5)...................................................           2,500,000              36.1%
W. Anthony Huff(5)...................................................           2,500,000              36.1%
Logistics Management LLC(6)..........................................           2,500,000              36.1%
All directors and executive officers as a group (10 persons).........           4,307,800              49.4%
</TABLE>

---------------------------
*     Represents less than 1%.

(1)      Unless otherwise noted, the Company believes that all persons named in
         the table have sole voting and investment power with respect to all
         shares of Common Stock beneficially owned by them. Under the rules of
         the Securities and Exchange Commission, a person is deemed to be a
         "beneficial" owner of securities if he or she has or shares the power
         to vote or direct the voting of such securities or the power to dispose
         or direct the disposition of such securities. A person is also deemed
         to be a beneficial owner of any securities which that person has the
         right to acquire beneficial ownership within 60 days. More than one
         person may be deemed to be a beneficial owner of the same securities.
(2)      Consists solely of options to acquire 1,300,000 shares of Common Stock,
         which are currently exercisable at an exercise price of $1.75 per
         share.
(3)      Consists of options to acquire 2,000 and 4,000 shares of Common Stock,
         which are currently


                                       29
<PAGE>   30

         exercisable at exercise prices of $2.58 and $1.50 per share,
         respectively.
(4)      Consists of (1) 20,100 shares held directly; (2) 1,300 shares held for
         the benefit of Mr. Hardwick's grandson; and (3) options to acquire
         2,000 and 4,000 shares of Common Stock, which are currently exercisable
         at exercise prices of $2.58 and $1.44 per share, respectively.
(5)      Represents shares owned by Logistics Management LLC. Messrs. Huff and
         Pixler are the principals of Logistics Management LLC.
(6)      Based solely on the Schedule 13D, dated January 11, 2000, filed by
         Logistics Management LLC. The address of this shareholder is 10602
         Timberwood Circle, Suite 9, Louisville, Kentucky 40223.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Transactions with Dennis A. Bakal and Affiliates. In May 1996, the
Company moved its operations to a facility leased to Professional Sales Group
Ltd. ("PSG"), a company wholly-owned by Dennis A. Bakal. Under the terms of the
sublease with PSG, the Company subleases certain portions of the facility from
PSG at a competitive market rate and is committed to the facility for a period
of seven years (the remaining term of PSG's lease with the owner, an unrelated
third party). Rent expense paid by the Company under this arrangement was
approximately $286,000 in 1999 and $180,000 in 1998. The sublease provides for
escalations for items such as taxes and common area maintenance, with a
scheduled rent increase for the last five years of the term. If Mr. Bakal finds
suitable tenants to take the entire premises currently leased by PSG, it is his
intention to terminate the sublease with the Company and move to other
facilities. Currently, more than 40% of the space leased by PSG has been
subleased to unrelated third parties.

         Certain credit facilities available to the Company have been guaranteed
personally by Mr. Bakal. Pursuant to the employment agreement entered into by
the Company and Mr. Bakal, the Company will use its best efforts to remove and
cause to be terminated all guarantees provided by Mr. Bakal. Because the Company
was unable to do so prior to December 31, 1997, the Company is obligated to
compensate Mr. Bakal for providing such guarantees. Mr. Bakal waived any such
payment in 1999.

         Mr. Bakal has personally guaranteed a portion of the PSG facilities
lease and many of the equipment operating leases and other liabilities of the
Company and its subsidiaries. In the past, Mr. Bakal has personally provided
loans and advances to and has borrowed funds from the Company on an informal
basis. Certain of the loans and advances have been repaid, converted to equity
or remain unpaid at the present time. As of December 31, 1999, the Company had a
net receivable from Mr. Bakal of $231,799.

         On December 31, 1996, PTG, Inc. (a wholly owned subsidiary of the
Company) purchased, in a nonmonetary exchange, the assets of Rapid Transit,
("Rapid") and certain other physical assets from a group of companies owned by
Mr. Bakal. As consideration for the purchase, PTG assumed accounts payable
associated with Rapid from these entities. In addition, PTG agreed to pay to a
related party 5% of the gross sales of Rapid for a period of five years. At
December 31, 1999, the obligation under this agreement was approximately
$51,000. Certain assets of Rapid were sold during 1999 and no additional
obligation was accrued for 1999.

         Mr. Bakal, as the majority owner of the Company (until December 3,
1999) and other entities, directs the operations of the various entities and the
transactions between them. All long-term financial commitments of the Company
and its subsidiaries with Mr. Bakal and/or other companies controlled by him are
subject to written agreements at terms, in the opinion of management, comparable
to arms-length, third-party transactions of a similar nature.


                                       30
<PAGE>   31

         The Company believes that all the foregoing related-party transactions
were on terms no less favorable to the Company than could reasonably be obtained
from unaffiliated third parties. The Company has adopted a policy whereby all
future transactions with affiliates must be approved by a majority of
disinterested directors of the Company and on the terms no less favorable to the
Company than those that are generally available from unaffiliated third parties.


                                       31
<PAGE>   32


                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)      Exhibits

3.1      Amended and Restated Articles of Incorporation of the Company
         (incorporated by reference to Exhibit 3.1 of the Company's Registration
         Statement on Form SB-2, No. 333-24619 (the "Registration Statement")
         and the Company's Registration Statement on Form S-3 filed on November
         15, 1999, No. 333-90955 (the "1999 S-3"))

3.2      Bylaws of the Company (incorporated by reference to Exhibit 3.2 of the
         Registration Statement)

4.1      Specimen Common Stock Certificate (incorporated by reference to Exhibit
         4.1 of the Registration Statement)

4.2      Specimen Redeemable Warrant Certificate (incorporated by reference to
         Exhibit 4.2 of the Registration Statement)

4.3      Form of Purchase Agreement for Series A Preferred Stock (incorporated
         by reference to Exhibit 4.1 of the 1999 S-3)

10.1     Professional Transportation Group Ltd., Inc. 1996 Stock Option Plan
         (incorporated by reference to Exhibit 10.1 of the Registration
         Statement)*

10.2     Employment Agreement by and between the Company and Dennis A. Bakal,
         dated April 1, 1997 (incorporated by reference to Exhibit 10.2 of the
         Registration Statement)*

10.3     Employment Agreement by and between the Company and Linda K. Roberts,
         dated April 1, 1997 (incorporated by reference to Exhibit 10.3 of the
         Registration Statement)*

10.4     Employment Agreement by and between the Company and William M. Kelly,
         dated April 1, 1997 (incorporated by reference to Exhibit 10.4 of the
         Registration Statement)*

10.5     Employment Agreement by and between the Company and Stanley E. Laiken,
         dated April 1, 1997 (incorporated by reference to Exhibit 10.5 of the
         Registration Statement)*

10.6     Form of Director's Indemnification Agreement entered into by and
         between the Company and each of its directors (incorporated by
         reference to Exhibit 10.6 of the Registration Statement)*

10.7     Transportation Agreement, dated November 19, 1995, between Timely
         Transportation, Inc. and Federal Express Corporation (incorporated by
         reference to Exhibit 10.7 of the Registration Statement)+

10.8     OmniTRACS Contract, dated May 8, 1995, by and between Timely
         Transportation, Inc. and QUALCOMM Inc. (incorporated by reference to
         Exhibit 10.8 of the Registration Statement)


                                       32
<PAGE>   33

10.9     Amendment No. 1 to OmniTRACS Contract, dated June 23, 1995, by and
         between Timely Transportation, Inc. and QUALCOMM Inc. (incorporated by
         reference to Exhibit 10.9 of the Registration Statement)

10.10    OmniTRACS Finance Lease, dated June 23, 1995, by and between Timely
         Transportation, Inc. and QUALCOMM Inc. (incorporated by reference to
         Exhibit 10.10 of the Registration Statement)

10.11    Sublease, dated January 1, 1997, by and between the Company and
         Professional Sales Group, Ltd. (incorporated by reference to Exhibit
         10.11 of the Registration Statement)

10.12    Amended and Restated Commercial Loan Agreement, dated March 2,1998, by
         and between the Company, Timely Transportation, Inc., Truck-Net, Inc.,
         PTG, Inc., Timely North, Inc. and SouthTrust Bank, N.A. (incorporated
         by reference to Exhibit 10.1 of the Company's current report on Form
         8-K, date of report March 2, 1998 (the "March 8-K"))

10.13    Amended, Restated and Consolidated Commercial Revolving Note, dated
         March 2, 1998, by and between the Company, Timely North, Inc., and
         SouthTrust Bank, N.A. (incorporated by reference to Exhibit 10.2 of the
         March 8-K)

10.14    Commercial Revolving Note, dated November 19, 1997, by and between the
         Company and SouthTrust Bank, N.A., in the original principal amount of
         $3.7 million (incorporated by reference to Exhibit 10.3 of the
         Company's current report on Form 8-K, date of report November 19, 1997
         (the "November 8-K"))

10.15    Amended and Restated General Security Agreement, dated November 19,
         1997, by and among the Company, Truck-Net, Inc., Timely Transportation,
         Inc., PTG, Inc., Timely North, Inc. and SouthTrust Bank, N.A.
         (incorporated by reference to Exhibit 10.5 of the November 8-K)

10.16    Reaffirmation of Guaranty, dated March 2, 1998, by and among the
         Company, Truck-Net,, Inc., Timely Transportation, Inc., PTG, Inc.,
         Dennis A. Bakal and SouthTrust Bank, N.A. (incorporated by reference to
         Exhibit 10.3 of the March 8-K)

10.17    Reaffirmation of Guaranty, dated March 2, 1998, by and among Truck-Net,
         Inc., Timely Transportation, Inc., PTG, Inc., Timely North, Inc.,
         Dennis A. Bakal and SouthTrust Bank, N.A. (incorporated by reference to
         Exhibit 10.4 of the March 8-K)

10.18    Consulting and Non-Competition Agreement, dated March 27, 1998, between
         Timely North, Inc. and CSI/Crown, Inc. (incorporated by reference to
         Exhibit 10.20 of the Company's Annual Report on Form 10-KSB for the
         year ended December 31, 1997, File No. 000-22571 (the "1997 10-K")+

10.19    First Amendment to the Professional Transportation Group Ltd., Inc.
         1996 Stock Option Plan (incorporated by reference to Exhibit A of the
         Company's proxy statement on Schedule 14A for its 1998 annual meeting
         of shareholders (the "1998 Proxy Statement"), File No. 000-22571)*

10.20    Professional Transportation Group Ltd., Inc. 1998 Director Stock Option
         Plan (incorporated by reference to Exhibit 4.3 of the Company's
         registration statement on Form S-8, File No. 333-57937)*


                                       33
<PAGE>   34

10.21    Professional Transportation Group Ltd., Inc. 1998 Employee Stock
         Purchase Plan (incorporated by reference to Exhibit B of the 1998 Proxy
         Statement)*

10.22    First Amendment to the Professional Transportation Group Ltd., Inc.
         1998 Employee Stock Purchase Plan (incorporated by reference to Exhibit
         10.24 of the Company's Annual Report on Form 10-K for the year ended
         December 31, 1998, File No.
         000-22571)*

10.23    Debenture and Warrant Purchase Agreement (incorporated by reference to
         the Company's current report on Form 8-K, dated of report January 4,
         1999)

10.24    Loan Documents Modification Agreement, dated as of January 15, 2000, by
         and between the Company and SouthTrust Bank, N.A.

10.25    Securities Purchase Agreement, dated as of December 31, 1999, between
         Logistics Management, L.L.C., Dennis A. Bakal and the Company
         (incorporated by reference to the Company's current report on Form 8-K,
         date of report December 6, 1999)

10.26    Letter Agreement, dated as of December 31, 1999, by and between Thomson
         Kernaghan & Co. Ltd. and the Company (incorporated by reference to the
         Company's current report on Form 8-K, date of report December 31, 1999)

13.1     Portions of the Company's 1999 Annual Report to Shareholders

21.1     Subsidiaries of the Company

23.1     Consent of Yohalem, Gillman & Company

23.2     Consent of Arthur Andersen LLP

24.1     Power of Attorney (contained on the signature page of this filing)

27.1     Financial Data Schedule (for Commission purposes only)


---------------
+        Confidential treatment previously granted for portions of this exhibit.

*        This agreement is a compensatory plan or arrangement required to be
         filed as an exhibit to this Form 10-K pursuant to Item 14(c).

(b)      Financial Statement Schedules.

         Report of Independent Public Accountants
         Schedule II - Valuation and Qualifying Accounts for the years ended
         December 31, 1999, 1998 and 1997.

(c)      Reports on Form 8-K.


                                       34
<PAGE>   35

         The Company filed one current report on Form 8-K during the fourth
         quarter of the year ended December 31, 1999: Date of report, December
         6, 1999, regarding change of control of the Company.


                                       35
<PAGE>   36


                                   SIGNATURES


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


                                   Professional Transportation Group, Ltd., Inc.

Date:    April 13, 2000            By:  /s/ Dennis A. Bakal
                                      -----------------------------------------
                                        Dennis A. Bakal
                                        Chief Executive Officer and President



                                POWER OF ATTORNEY

         KNOW BY ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints jointly and severally, Danny L. Pixler
and W. Anthony Huff, and each one of them, his attorneys-in-fact, each with the
power of substitution, for him in any and all capacities, to sign any and all
amendments to this Annual Report (Form 10-K) and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that each said
attorneys-in-fact, or his substitute or substitutes, may do or cause to be done
by virtue hereof.

         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.

<TABLE>
<CAPTION>

SIGNATURES                                           TITLE                                   DATE
----------                                           -----                                   ----
<S>                                                  <C>                                     <C>
    /s/ W. Anthony Huff                              Chairman and Director                   April 13, 2000
------------------------------------
    W. Anthony Huff

    /s/ Dennis A. Bakal                              President and Chief Executive           April 13, 2000
-------------------------------------                Officer, Director (principal
    Dennis A. Bakal                                  executive officer)


    /s/ Susan P. Dial                                Chief Financial Officer (principal      April 13, 2000
------------------------------------                 financial and accounting officer)
    Susan P. Dial

    /s/ Robert E. Altenbach                          Director                                April 13, 2000
------------------------------------
    Robert E. Altenbach

    /s/ Gregory G. Hardwick                          Director                                April 13, 2000
------------------------------------
    Gregory G. Hardwick

    /s/ Danny L. Pixler                              Director                                April 13, 2000
------------------------------------
    Danny L. Pixler

</TABLE>


                                       36
<PAGE>   37
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To Professional Transportation Group Ltd., Inc.
and Subsidiaries

We have audited the accompanying consolidated balance sheets of PROFESSIONAL
TRANSPORTATION GROUP LTD., INC. (a Georgia corporation) AND SUBSIDIARIES as of
December 31, 1999 and the related consolidated statements of operations,
changes in shareholders' equity (deficit), and cash flows for the year then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Professional Transportation
Group Ltd., Inc. and subsidiaries as of December 31, 1999 and the results of
their operations and their cash flows for the year then ended in conformity
with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has incurred net losses in 1998 and 1999 and
has a net working capital deficiency of approximately $6.2 million at December
31, 1999. In addition, the Company's line of credit was due as of March 31,
2000 and the Company is currently in the process of negotiating an extension.
If the line of credit is not extended or alternative financing cannot be found,
the Company may be unable to pay its obligations. These matters raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 1. The
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 should the Company be unable to
continue as a going concern.


/s/  Yohalem Gillman & Company LLP


New York, New York
April 11, 2000


                                      F-1
<PAGE>   38


                               ARTHUR ANDERSEN LLP



                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Professional Transportation Group Ltd., Inc.
and Subsidiaries:

We have audited the accompanying consolidated balance sheets of PROFESSIONAL
TRANSPORTATION GROUP LTD., INC. (a Georgia corporation) AND SUBSIDIARIES as of
December 31, 1998 and the related consolidated statements of operations, changes
in shareholders' equity (deficit), and cash flows for the years ended December
31, 1998 and 1997. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Professional Transportation
Group Ltd., Inc. and subsidiaries as of December 31, 1998 and the results of
their operations and their cash flows for the years ended December 31, 1998 and
1997 in conformity with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has incurred net losses in 1997 and 1998 and
has a net working capital deficiency of approximately $4.6 million at December
31, 1998. These matters raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans in regard to these matters are
also described in Note 1. The 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 should
the Company be unable to continue as a going concern.

/s/ Arthur Andersen LLP
Atlanta, Georgia
March 26, 1999


                                      F-2
<PAGE>   39
PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
ASSETS
                                                                                      DECEMBER 31.

                                                                                 1999               1998
                                                                             ------------       ------------
<S>                                                                          <C>                <C>
CURRENT ASSETS
   Cash                                                                      $    199,803       $  1,003,783
   Certificate of deposit                                                         268,734                 --
   Trade accounts receivable, net of allowance for doubtful accounts of
      $634,765 and $757,765 in 1999 and 1998, respectively                      5,398,210          6,633,732
   Due from affiliate                                                             429,365            429,365
   Due from related parties                                                       402,503            577,197
   Prepaid expenses                                                               401,169            662,176
   Other current assets                                                           534,275            583,311
                                                                             ------------       ------------

            Total current assets                                                7,634,059          9,889,564

PROPERTY AND EQUIPMENT, NET                                                     6,308,225          6,940,060

NONCURRENT NOTE AND OTHER RECEIVABLES                                           3,313,831          2,831,248

OTHER ASSETS                                                                      229,801            157,847
                                                                             ------------       ------------

                                                                             $ 17,485,916       $ 19,818,719
                                                                             ============       ============
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
   Cash overdraft                                                            $    544,610       $         --
                                                                             ------------       ------------
   Line of credit                                                               6,465,742          6,666,722
   Current maturities of long-term debt and capital lease obligations           1,444,167          1,487,025
   Accounts payable                                                             2,674,258          3,226,222
   Accrued liabilities                                                          2,697,036          3,074,145
                                                                             ------------       ------------

            Total current liabilities                                          13,825,813         14,454,114
                                                                             ------------       ------------

LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, NET OF CURRENT
   MATURITIES AND DEBT DISCOUNTS                                                3,840,833          4,268,887
                                                                             ------------       ------------

DEFERRED INCOME TAXES                                                             237,209            237,209
                                                                             ------------       ------------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY (DEFICIT)
   Series A Convertible Preferred stock, no par value,
      3,000 shares authorized, 325 shares issued and outstanding                  325,000                 --
   Common stock, no par value, 20,000,000 shares authorized,
      5,163,422 and 3,868,160 shares issued and outstanding in 1999
      and 1998, respectively                                                           --                 --
   Warrants                                                                       353,867            353,867
   Additional paid-in capital                                                   7,004,655          5,711,466
   Accumulated deficit                                                         (8,101,461)        (5,206,824)
                                                                             ------------       ------------

         Total shareholders' equity (deficit)                                    (417,939)           858,509
                                                                             ------------       ------------

                                                                             $ 17,485,916       $ 19,818,719
                                                                             ============       ============
</TABLE>


See accompanying notes and reports of independent public accountants.

                                       F-3

<PAGE>   40


PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS



<TABLE>
<CAPTION>
                                                                   YEARS ENDED DECEMBER 31,

                                                          1999               1998               1997
                                                      ------------       ------------       ------------
<S>                                                   <C>                <C>                <C>

OPERATING REVENUES                                    $ 41,356,478       $ 55,066,949       $ 43,064,743
                                                      ------------       ------------       ------------

OPERATING EXPENSES
   Salaries, wages, and benefits                        19,218,676         25,684,226         17,126,177
   Purchased transportation                              5,043,994          5,719,410          8,337,627
   Operating supplies and expenses                       8,009,052         11,275,455          9,480,467
   Fuel and fuel taxes                                   5,260,447          6,890,210          5,733,829
   Communications and utilities                            760,822          1,192,990            668,990
   Depreciation                                            997,683            908,386            383,654
   Operating taxes and licenses                            427,703            359,602            148,793
   Bad debt expense                                      1,677,715            512,000            242,829
   Other operating expenses                              2,095,753          3,336,394          2,464,980
                                                      ------------       ------------       ------------

            Total operating expenses                    43,491,845         55,878,673         44,587,346
                                                      ------------       ------------       ------------

LOSS FROM OPERATIONS                                    (2,135,367)          (811,724)        (1,522,603)
                                                      ------------       ------------       ------------

OTHER INCOME (EXPENSE)
   Interest expense                                     (1,066,708)        (1,300,341)          (341,982)
   Other income (expense), net                             307,438         (1,386,346)           340,285
                                                      ------------       ------------       ------------

LOSS BEFORE INCOME TAXES                                (2,894,637)        (3,498,411)        (1,524,300)
                                                      ------------       ------------       ------------

INCOME TAX PROVISION DUE TO CHANGE IN TAX STATUS                --                 --           (246,000)
                                                      ------------       ------------       ------------

NET LOSS                                              $ (2,894,637)      $ (3,498,411)      $ (1,770,300)
                                                      ============       ============       ============

NET LOSS PER COMMON SHARE:

   Basic                                              $      (0.67)      $      (0.90)      $      (0.54)
                                                      ============       ============       ============

   Diluted                                            $      (0.67)      $      (0.90)      $      (0.54)
                                                      ============       ============       ============


WEIGHTED AVERAGE COMMON SHARES OUTSTANDING -
   BASIC AND DILUTED                                     4,301,551          3,867,883          3,273,932
                                                      ============       ============       ============
</TABLE>


See accompanying notes and reports of independent public accountants.

                                       F-4

<PAGE>   41



PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)


<TABLE>
<CAPTION>
                                                              YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

                                                 Common Stock          Preferred Stock               Warrants
                                            ---------------------    ------------------      -----------------------
                                              Shares       Amount    Shares     Amount         Shares        Amount
                                            ---------      ------    ------    --------      ---------      --------
<S>                                         <C>            <C>       <C>       <C>           <C>            <C>
BALANCE, DECEMBER 31, 1996                  2,600,000       $ --       --      $     --             --      $     --
   Pro-forma net loss                              --         --       --            --             --            --
   Initial public offering, net of
      issuance costs                        1,250,000         --       --            --             --            --
   Warrants outstanding                            --         --       --            --      1,437,500       177,117
   Issuance of stock                           20,000         --       --            --             --            --
   Retirement of stock                         (3,000)        --       --            --             --            --
   Pro forma compensation expense                  --         --       --            --             --            --
                                           ----------       ----      ---      --------      ---------      --------

BALANCE, DECEMBER 31, 1997                  3,867,000         --       --            --      1,437,500       177,117

   Net loss                                        --         --       --            --             --            --
   Issuance of convertible debentures
      and warrants                                 --         --       --            --      1,100,000       176,750
   Issuance of stock                            1,160         --       --            --             --            --
                                           ----------       ----      ---      --------      ---------      --------

BALANCE, DECEMBER 31, 1998                  3,868,160         --       --            --      2,537,500       353,867

   Net loss                                        --         --       --            --             --            --
   Issuance of preferred stock                     --         --      325       325,000             --            --
   Issuance of common stock                   735,444         --       --            --             --            --
   Conversion of debentures                   499,188         --       --            --             --            --
   Stock purchase plan                         10,630         --       --            --             --            --
   Exercise of non-publicly
      held warrants                            50,000         --       --            --             --            --
                                           ----------       ----      ---      --------      ---------      --------

BALANCE, DECEMBER 31, 1999                  5,163,422         --      325       325,000      2,537,500      $353,867
                                           ==========       ====      ===      ========      =========      ========

<CAPTION>

                                                Additional
                                                  Paid-In       Accumulated
                                                  Capital         Deficit            Total
                                                ----------      ------------      -----------
<S>                                             <C>             <C>               <C>
BALANCE, DECEMBER 31, 1996                      $   57,166      $   (58,113)      $      (947)
   Pro-forma net loss                                   --       (1,770,300)       (1,770,300)
   Initial public offering, net of
      issuance costs                             5,507,077               --         5,507,077
   Warrants outstanding                                 --               --           177,117
   Issuance of stock                                 3,000               --             3,000
   Retirement of stock                                  --               --                --
   Pro forma compensation expense                       --          120,000           120,000
                                                ----------      -----------       -----------

BALANCE, DECEMBER 31, 1997                       5,567,243       (1,708,413)        4,035,947

   Net loss                                             --       (3,498,411)       (3,498,411)
   Issuance of convertible debentures
      and warrants                                 141,103               --           317,853
   Issuance of stock                                 3,120               --             3,120
                                                ----------      -----------       -----------

BALANCE, DECEMBER 31, 1998                       5,711,466       (5,206,824)          858,509

   Net loss                                             --       (2,894,637)       (2,894,637)
   Issuance of preferred stock                          --               --           325,000
   Issuance of common stock                        950,000               --           950,000
   Conversion of debentures                        328,250               --           328,250
   Stock purchase plan                              14,439               --            14,439
   Exercise of non-publicly
      held warrants                                    500               --               500
                                                ----------      -----------       -----------

BALANCE, DECEMBER 31, 1999                      $7,004,655      $(8,101,461)      $  (417,939)
                                                ==========      ===========       ===========
</TABLE>


See accompanying notes and reports of independent accountants.


                                       F-5

<PAGE>   42



PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                           YEARS ENDED DECEMBER 31,

                                                                  1999             1998               1997
                                                              -----------       -----------       ------------
<S>                                                           <C>               <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss                                                   $(2,894,637)      $(3,498,411)      $ (1,770,300)
                                                              -----------       -----------       ------------
   Adjustments to reconcile net loss to net cash
      provided by (used in) operating activities:
         Pro forma compensation expense                                --                --            120,000
         Interest expense on convertible debentures                    --           141,103                 --
         Deferred income taxes                                         --                --            124,939
         Depreciation                                             997,683           908,386            383,654
         Provision for doubtful accounts                        1,677,715           512,000            242,839
         Changes in operating assets and liabilities:
            Trade accounts receivable, net                       (442,193)        2,764,889         (7,333,435)
            Due from affiliate                                         --            29,250           (229,722)
            Prepaid expenses and other current assets             310,043           117,035         (1,186,157)
            Accounts payable and accrued liabilities             (929,073)          (48,839)         3,627,538
                                                              -----------       -----------       ------------
                Total adjustments                               1,614,175        (4,423,824)        (4,250,344)
                                                              -----------       -----------       ------------

                Net cash provided by (used in) operating
                  activities                                   (1,280,462)          925,413         (6,020,644)
                                                              -----------       -----------       ------------

CASH FLOWS FROM INVESTING ACTIVITIES
   Purchases of property and equipment                           (365,848)       (2,863,459)        (3,689,631)
   Purchase of certificate of deposit                            (268,734)               --                 --
   Note receivable                                               (482,583)         (491,901)        (2,339,346)
   (Increase) decrease in other assets                            (71,954)          235,939           (201,654)
                                                              -----------       -----------       ------------

         Net cash provided by (used in) investing
            activities                                         (1,189,119)       (3,119,421)        (6,230,631)
                                                              -----------       -----------       ------------

CASH FLOWS FROM FINANCING ACTIVITIES
   Net (repayments) proceeds from line of credit                 (200,980)         (162,000)         5,950,343
   Cash overdraft                                                 544,610                --                 --
   Repayments of long-term debt and capital lease
      obligations                                              (4,492,662)       (1,399,825)          (500,701)
   Proceeds from long-term debt                                 4,350,000         2,828,764          2,914,383
   Issuance of convertible debentures and warrants                     --           505,000                 --
   Due (from) to shareholder                                      174,694                --           (625,666)
   Proceeds from sale of common stock and common
      stock purchase warrants                                     964,939             3,120          5,687,194
   Issuance of convertible preferred stock                        325,000                --                 --
                                                              -----------       -----------       ------------

              Net cash provided by financing activities         1,665,601         1,775,059         13,425,553
                                                              -----------       -----------       ------------

NET (DECREASE) INCREASE IN CASH                                  (803,980)         (418,949)         1,174,278

Cash, beginning of year                                         1,003,783         1,422,732            248,454
                                                              -----------       -----------       ------------

CASH, END OF YEAR                                             $   199,803       $ 1,003,783       $  1,422,732
                                                              ===========       ===========       ============
</TABLE>


See accompanying notes and reports of independent public accountants.

                                       F-6

<PAGE>   43



PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997


1.       ORGANIZATION AND OPERATIONS

         Professional Transportation Group Ltd., Inc. ("PTG, Ltd.") serves as a
         holding company for its four operating subsidiaries, Timely
         Transportation, Inc. ("Timely"), Truck-Net, Inc. ("Truck-Net"), Timely
         North, Inc. ("Timely-North"), and PTG, Inc. (collectively, the
         "Subsidiaries") (PTG, Ltd. together with the Subsidiaries is hereafter
         referred to as the "Company"). The Company, through the Subsidiaries,
         provides transportation and logistics services primarily for the air
         freight industry throughout the continental United States. Timely
         operates a fleet of company-owned and leased vehicles to provide
         time-definite truckload transportation services for companies in the
         air freight and expedited delivery markets. Truck-Net provides
         brokerage services to companies, mainly in the air freight industry,
         that are in need of third-party transportation. Timely North provided
         time-definite truckload transportation services for companies in the
         floorcovering industry (1998 and 1997). PTG, Inc. operated a courier
         service in the Atlanta, Georgia, metropolitan region (d.b.a. Rapid
         Transit) and provides third-party logistics services in recovering
         copiers, fax machines, and telephone equipment that are in need of
         repair or under expired leases. The Company terminated the operations
         of both Timely North and Rapid Transit in April 1998 and September
         1999, respectively.

         Prior to January 1997, the Subsidiaries were owned and operated by the
         (then) majority shareholder of the Company as separate operating
         companies. On January l, 1997, the respective shares of stock in the
         Subsidiaries were contributed to PTG, Ltd. by their sole shareholder,
         whereupon each became a wholly owned subsidiary of PTG, Ltd. PTG, Ltd.,
         which had previously been an operating company, then transferred its
         operations to PTG, Inc.

         As the companies were all under common control, the above transactions
         were treated as a reorganization (the "Reorganization") and were
         accounted for in a manner similar to a pooling of interests. All
         references to number of shares and per share information in the
         financial statements have been adjusted to retroactively reflect the
         Reorganization as if it had occurred on December 31, 1995.

         In July 1997, the Company completed an initial public offering (the
         "Offering") of its common stock and redeemable common stock purchase
         warrants and redeemable common stock purchase warrants (Note 3).

         FINANCIAL CONDITION

         The Company incurred net losses of $2.9 million in 1999, $3.5 million
         in 1998 and $1.8 million in 1997. At December 31, 1999, it has a net
         working capital deficiency of $6.2 million. Included in this working
         capital deficiency is a liability of $6.5 million under the Company's
         line of credit agreement. As discussed in Note 6, the maturity date of
         the line was extended to March 31, 2000, however the Company was in
         default under several covenants at December 31, 1999. Management is
         currently negotiating an extension of its line of credit agreement with
         its primary lender. Management expects that if it is unable to extend
         the line of credit, it will seek additional third-party financing to
         satisfy its anticipated cash requirements through 2000. There can be no
         assurance that the Company will be successful in obtaining an extension
         of its credit agreement or in arranging alternative financing under
         commercially reasonable terms or at all.


                                       F-7

<PAGE>   44



PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997



1.       ORGANIZATION AND OPERATIONS (CONTINUED)

         Management has also taken steps to improve the operating performance of
         the Company. The Company terminated its unprofitable marketing
         agreement with Carpet Transport, Inc. (see Note 5) and has discontinued
         service in unprofitable lines of business and on routes where margins
         were unacceptable. Although management believes that its actions have
         had a positive impact on the Company's operations, there can be no
         assurance that the Company will be able to operate profitably.

         As a result of the above factors, there is substantial doubt about the
         Company's ability to continue as a going concern. The financial
         statements do not include any adjustments that might result from the
         outcome of this uncertainty.

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         PRINCIPLES OF CONSOLIDATION

         The accompanying financial statements include the accounts of PTG, Ltd.
         and the Subsidiaries. All significant intercompany balances and
         transactions have been eliminated.

         USE OF ESTIMATES

         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.

         RECOGNITION OF REVENUE

         For financial reporting purposes, the Company recognizes revenue when a
         shipment is loaded and dispatched. Significant related costs associated
         with earning this revenue are accrued at that time. In 1991, the
         Emerging Issues Task Force ("EITF") released Issue 91-B, "Revenue and
         Expense Recognition for Freight Services in Process." The EITF reached
         a consensus that the preferable method of recognizing revenue and
         expenses was either (1) the recognition of both revenue and direct cost
         when the shipment is completed or (2) the allocation of revenue between
         reporting periods based on relative transit time in each reporting
         period and the recognition of expenses as incurred. The difference
         between the Company's method of revenue recognition and the preferable
         methods described above is not material to the accompanying
         consolidated financial statements.


                                       F-8

<PAGE>   45



PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997



2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         CASH, CASH EQUIVALENTS, AND CERTIFICATES OF DEPOSIT

         The Company considers all highly liquid investments with an original
         maturity of three months or less to be cash equivalents.

         At December 31, 1999, approximately $190,000 of cash and a certificate
         of deposit amounting to $268,734 (maturing on June 30, 2000) were
         restricted for use as collateral for certain lines of credit (Note 6).

         PROPERTY AND EQUIPMENT

         Property and equipment are stated at cost. Major property additions,
         replacements, and betterments are capitalized, while maintenance and
         repairs which do not extend the useful lives of these assets are
         expensed as incurred. Depreciation is provided over the estimated
         useful lives of the assets using the straight-line method for financial
         reporting purposes and accelerated methods for income tax purposes.
         Upon retirement or disposal of assets, the cost and related accumulated
         depreciation are removed from the balance sheet, and any gain or loss
         is reflected in earnings.

         The detail of property and equipment at December 31, 1999 and 1998 is
         as follows:

<TABLE>
<CAPTION>
                                                           1999              1998
                                                        -----------       -----------

         <S>                                            <C>               <C>
         Transportation equipment and improvements      $ 6,398,552       $ 5,952,852
         Furniture, fixtures and equipment                2,597,936         2,491,538
         Leasehold improvements                              15,840           242,584
                                                        -----------       -----------

                                                          9,012,328         8,686,974
         Less accumulated depreciation                   (2,704,103)       (1,746,914)
                                                        -----------       -----------

                                                        $ 6,308,225       $ 6,940,060
                                                        ===========       ===========
</TABLE>

         The estimated useful lives of the various classes of physical assets
         were as follows during 1999:

<TABLE>
           <S>                                                    <C>
           Transportation equipment and improvements              7-10 years
           Furniture, fixtures and equipment                        5 years
           Leasehold improvements                                   5 years
</TABLE>

       During 1998, the Company extended the useful lives of its trailers from
       seven to ten years, while the useful lives of trailer improvement and
       tractors remains seven years. As a result, depreciation expense for the
       year ended December 31, 1998, decreased by approximately $180,000.


                                       F-9

<PAGE>   46



PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997



2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         ACCRUED LIABILITIES

         Accrued liabilities consist of the following at December 31, 1999 and
         1998:

<TABLE>
<CAPTION>
                                                  1999            1998
                                              ----------      ----------

            <S>                               <C>             <C>
            Salaries, wages and benefits      $  745,547      $  788,919
            Professional fees                    317,484              --
            Interest                              71,490              --
            Fuel                                  80,838              --
            Other                              1,481,677       2,285,226
                                              ----------      ----------

                                              $2,697,036      $3,074,145
                                              ==========      ==========
</TABLE>

         SALARIES, WAGES AND BENEFITS

         Prior to 1997, the Company leased drivers and certain office personnel
         from an independent personnel leasing company. Effective February 1997,
         the Company transferred all of its employees to the personnel leasing
         company. Under the lease agreement, the Company pays a fixed amount per
         leased employee (in addition to compensation costs) to the personnel
         leasing company to cover payroll processing, unemployment insurance,
         and workers' compensation. Salaries, wages, and benefits on the
         accompanying statements of operations include fees paid to the
         personnel leasing company for processing of payroll of approximately
         $1,615,000 and $2,381,000 for the years ended December 31, 1999 and
         1998, respectively.

         EARNINGS PER SHARE

         The Company adopted Statement of Financial Accounting Standards
         ("SFAS") No. 128, "Earnings Per Share", effective December 31, 1997.
         Earnings per share have been computed based on the weighted average
         shares and dilutive potential common shares outstanding during the
         year. The assumed exercise of outstanding warrants and stock options
         for diluted loss per common share was not applicable because their
         effect was antidilutive.


                                      F-10

<PAGE>   47



PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997



2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         PRO FORMA ADJUSTMENTS

         A pro forma adjustment has been made in the accompanying consolidated
         statement of operations for the year ended December 31, 1997 to reflect
         compensation expenses for the fair value of services provided by the
         majority shareholder prior to July 1, 1997.

         INCOME TAXES

         Prior to the Reorganization, PTG, Ltd. and two of the Subsidiaries
         elected to be treated as S corporations for federal and state income
         tax purposes. Accordingly, all income or losses of these companies were
         recognized by the shareholders on their individual tax returns. In
         connection with the Offering (Note 3), these companies converted from S
         corporation to C corporation status and, accordingly, are subject to
         future federal and state income taxes. The Company follows the practice
         of providing from income taxes based on SFAS No. 109, "Accounting for
         Income Taxes." Under SFAS No. 109, deferred tax assets or liabilities
         at the end of each period are determined using the tax rate expected to
         apply to taxable income in the period in which the deferred tax asset
         or liability is expected to be settled or realized (Note 8).

         FAIR VALUE OF FINANCIAL INSTRUMENTS

         The fair value of financial instruments classified as current assets or
         liabilities, including cash and cash equivalents, accounts receivable,
         and accounts payable, approximate carrying value due to the short-term
         maturity of the instruments. The carrying amount of long-term debt
         approximates fair value based on the borrowing rates currently
         available to the Company for loans with similar terms and average
         maturities.

         SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

<TABLE>
<CAPTION>
                                                   1999            1998
                                            ----------------      ----------

            <S>                             <C>                   <C>
            Cash paid for interest          $        995,218      $1,262,277
            Cash paid for income taxes                    --              --
</TABLE>

       Significant noncash investing and financing activities that are excluded
       from the consolidated cash flow statement for 1999 include conversion of
       $375,000 of debentures to common stock.


                                      F-11

<PAGE>   48



PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997



2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         ACCOUNTING STANDARDS TO BE ADOPTED

         In June 1998, the Financial Accounting Standards Board ("FASB") issued
         SFAS No. 133, "Accounting for Derivative Instruments and Hedging
         Activities". In June 1999, the FASB issued SFAS 137 deferring the
         effective date of SFAS 133 to fiscal years beginning after June 15,
         2000. SFAS No. 133 establishes accounting and reporting standards
         requiring that every derivative instrument (including certain
         derivative instruments embedded in other contracts) be recorded in the
         balance sheet as either an asset or liability measured at its fair
         value and that changes in the derivative's fair value be recognized in
         earnings in the current period unless specific hedge accounting
         criteria are met. The Company plans to adopt SFAS No. 133 in the first
         quarter of fiscal year 2001. Management does not believe the adoption
         of this statement and will have a material impact on the Company's
         financial statements.

3.       THE OFFERING

         Effective June 19, 1997, the Company completed an offering of 1,250,000
         shares of its common stock that raised approximately $6,657,000 in
         aggregate proceeds for the Company. A portion of the approximate
         $5,507,000 net proceeds were used to purchase equipment for the
         Company's operations.

         In connection with the Offering, the Company sold 1,437,500 redeemable
         common stock purchase warrants for $177,117. Each warrant is
         transferable immediately upon issuance and entitles the holder to
         purchase one share of the Company's common stock at a price of $6.90
         per share during the four-year period beginning as of the effective
         date of the Offering. The warrants are redeemable by the Company at a
         redemption price of $.125 per warrant upon the occurrence of certain
         specified conditions (see Note 14 for subsequent change of exercise and
         redemption price).

4.       RELATED-PARTY TRANSACTIONS

         The Company's former majority shareholder (who sold all of his shares
         on December 7, 1999 to an unrelated third party) also owns a
         controlling interest in several other related affiliate companies.
         Significant related-party transactions are detailed hereafter.


                                      F-12

<PAGE>   49



PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997


4.       RELATED-PARTY TRANSACTIONS (CONTINUED)

         In December 1996, PTG, Inc. was involved in a nonmonetary exchange with
         certain affiliated companies (the "Sellers"), whereby PTG, Inc. assumed
         certain liabilities of the Sellers (including amounts due to the
         Subsidiaries of $181,562) in exchange for certain assets, valued at
         $266,386, and the operations of Rapid Transit Delivery Services
         ("Rapid"), a division of the Sellers. PTG, Inc. is obligated to a
         related party to pay 5% of the gross sales of Rapid for a period of
         five years. No payments were made by the Company during 1998 or 1997.
         At December 31, 1998, the obligation under this agreement was
         approximately $51,000. Certain assets of Rapid were sold during 1999
         and no additional obligation was accrued for 1999 (see Note 13).

         In January 1997, the Company signed a noncancelable sublease agreement
         with Professional Sales Group, Ltd. ("PSG") (a company partly owned by
         the former majority shareholder) which expires in April 2005. Prior to
         1997, this arrangement was not formalized. Rent expense paid by the
         Company under this arrangement was approximately $286,000 in 1999,
         $180,000 in 1998 and $120,000 in 1997.

         The former majority shareholder has both borrowed and advanced amounts
         to the Company, both personally and through affiliated companies, on an
         informal basis. The Company had a net receivable from a former
         shareholder of the Company of $231,799 and receivables due from other
         current shareholders of $188,704  at December 31, 1999 and $577,197
         at December 31, 1998 resulting from such transactions.

         The Company had a total receivable of $429,365 at both December 31,
         1999 and 1998 due from affiliates on the accompanying balance sheets.
         This receivable has been guaranteed by the Company's former majority
         shareholder.

         Effective December 1999, the Company has secured insurance coverage
         through a captive insurance company controlled indirectly by the new
         Chairman of the Company.

5.       NOTE RECEIVABLE AND MARKETING AGREEMENT

         In September 1997, the Company advanced $1,500,000 to CTI Properties,
         Inc. ("CTI Properties"), Carpet Transport, Inc. ("CTT") and Blue Mack
         Transport, Inc., each a subsidiary of Continental American
         Transportation, Inc. The note is secured by four parcels of real estate
         currently owned by CTI Properties, and is guaranteed by Continental
         American Transportation, Inc. ("Continental American") and the former
         owner of CTI. The note is due on demand, and interest is due monthly at
         16%.

         In October 1997, Timely North entered into a marketing agreement with
         CTI and Continental American whereby Timely North agreed to employ all
         of CTI's employees and to lease and/or sublease all the rolling stock
         and terminal facilities from CTI. The marketing agreement was
         terminated on July 31, 1998.

         At December 31, 1999 and 1998, the Company has recorded advances to and
         receivables from CTI of $1,813,832 and $1,331,248, respectively,
         including accrued interest, in addition to the $1.5 million loan.


                                      F-13

<PAGE>   50



PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997


5.       NOTE RECEIVABLE AND MARKETING AGREEMENT (CONTINUED)

         Although CTI is in bankruptcy and has asserted that the Company's first
         priority security deed may be avoided as a preference (see Note 10) the
         current management intends to vigorously pursue and expects to collect
         these notes and advances. There can be no assurance, however, that such
         receivables will be fully collected.

         Total operating losses attributable to Timely North and to the
         termination of the marketing agreement with CTI for the years ended
         December 31, 1998 and 1997 were approximately $3.3 million and $1.8
         million, respectively.

6.       LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS

         LINE OF CREDIT

         During 1997, the Company obtained a line of credit agreement (the "New
         Agreement") with a bank and retired all amounts outstanding under
         previous line of credit subject to certain restrictions. Amounts
         outstanding under the New Agreement bear interest at .75% above the
         bank base rate, as defined (9.50% at December 31, 1999). Interest is
         payable monthly and the line had a maturity date of January 15, 2000.
         In January 2000, the maturity date of borrowings under the New
         Agreement was extended to March 31, 2000. The former majority
         shareholder is a guarantor of the New Agreement. As of December 31,
         1999, the Company borrowed $6,465,742 under the New Agreement and there
         was no remaining availability under the line. The New Agreement
         provides the bank with a security interest in accounts receivable and
         cash of the Company.

         Pursuant to the terms of the New Agreement, the Company must satisfy
         certain financial covenants therein. As of December 31, 1999, the
         Company was in default under several of the covenants.

         LONG-TERM DEBT

         Long-term debt consists of the following at December 31, 1999 and 1998:

<TABLE>
<CAPTION>
                                                      1999          1998
                                                    --------     ---------
         <S>                                        <C>          <C>

         Notes payable for transportation
         equipment, bearing interest at
         14.5%, with monthly principal
         and interest payments totaling
         $6,623, maturing October 1998
         through May 1999                           $     --       $  7,750

         Note payable to a bank, bearing
         interest at 10.85%, with monthly
         principal and interest payments
         of $4,150 through November 2000,
         secured by transportation
         equipment                                   127,201        155,915
</TABLE>


                                      F-14

<PAGE>   51



PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997



6.     LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS (CONTINUED)

<TABLE>
<CAPTION>
                                                   1999              1998
                                                ----------       -----------

        <S>                                     <C>              <C>
        Note payable for transportation
        equipment, bearing interest at
        10.43%, with monthly principal
        and interest payments of $8,176
        through September 2000, secured
        by related transportation
        equipment                               $      --        $   154,305

        Note payable for transportation
        equipment, bearing interest at
        11.25%, with monthly principal
        and interest payments of $6,662
        through February 2001, secured
        by related transportation
        equipment                                      --            147,853

        Note payable for transportation
        equipment, bearing interest at
        8.5%, with monthly principal and
        interest payments of $1,962
        through July 2002, secured by
        related transportation equipment           55,566             72,518

        Note payable for transportation
        equipment, bearing interest at
        8.32%, with monthly principal
        and interest payments of $45,394
        through July 2002, secured by
        related transportation equipment               --          1,831,317

        Note payable to former
        shareholder, bearing interest at
        8.45%, with weekly principal and
        interest payments of $500
        through December 2004                      85,672             93,469

        Note payable to former
        shareholder, bearing interest at
        17.98%, with weekly principal
        and interest payments of $500
        through December 2004                      74,596             95,356

        Note payable to a bank, bearing
        interest at 8.2%, with monthly
        principal and interest payments
        of $22,898 through March 2003,
        secured by related
        transportation equipment                  283,601            983,718

        Note payable to a bank, bearing
        interest at 8.13%, with monthly
        principal and interest payments
        of $11,051 through March 2003,
        secured by related
        transportation equipment                       --            271,851
</TABLE>


                                      F-15

<PAGE>   52



PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997



6.     LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS (CONTINUED)

<TABLE>
<CAPTION>
                                                      1999               1998
                                                  -----------       ------------
        <S>                                       <C>              <C>

        Note payable to a bank, bearing
        interest at 8.25%, with monthly
        principal and interest payments
        of $5,641 through October 2001,
        secured by related
        transportation equipment                  $   105,347      $     162,821

        Note payable to Transamerica
        Equipment Financial Services
        Corporation bearing interest at
        prime plus 1.75% (10.50% at
        December 31, 1999) with monthly
        principal and interest payments
        ranging from $50,707 to $101,978
        through March 15, 2004 secured
        by transportation equipment.
        This note provides for the
        Company to maintain certain
        financial covenants and includes
        a subjective acceleration clause.           4,299,292                 --

        9% convertible debentures due
        December 31, 2000                                  --            500,000
                                                  -----------       ------------

                                                    5,031,275          4,476,873
       Less current maturities                     (1,318,187)        (1,023,923)
       Less debt discount                                  --           (171,750)

                                                  $ 3,713,088       $  3,281,200
                                                  ===========       ============
</TABLE>

       Future maturities of long-term debt at December 31, 1999 are as follows:


<TABLE>
                 <S>                               <C>
                 2000                              $ 1,318,187
                 2001                                1,096,115
                 2002                                1,142,838
                 2003                                1,177,696
                 2004                                  296,439
                 Thereafter                                 --
                                                   -----------

                                                   $ 5,031,275
                                                   ===========
</TABLE>


                                      F-16

<PAGE>   53



PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997


6.       LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS (CONTINUED)

         CONVERTIBLE DEBENTURES

         In December 1998, the Company completed a private placement of $500,000
         of 9% convertible debentures and warrants for the purchase of up to 1.1
         million shares of the company's common stock. One million of the
         warrants are exercisable at a discount to the market price, as defined,
         at the time of exercise and 100,000 are exercisable at $3.50 per share.
         The value of the warrants was $176,750 based on the relative value of
         the warrants on the date of issue. Of this amount, $171,750 has been
         recorded as a discount to the Debentures. These Debentures contain a
         feature which allows their conversion into common stock of the Company
         at a discount from its market price. As this conversion feature was "in
         the money" at the date of issuance, a one-time charge of $141,403 was
         made to interest expense to reflect the value of the conversion
         feature. During the year ended December 31, 1999, the debentures were
         converted into 499,188 shares of common stock.

         In December 1999, the Company arranged for a private placement of up to
         $2,500,000 of 10% convertible debentures. The Company has initially
         sold $600,000 of these debentures in January 2000. As part of the
         transaction, the Company granted the investors a warrant to purchase up
         to 214,285 shares of common stock and to the placement agent a warrant
         to purchase 142,857 shares of common stock. Both warrants carry an
         exercise price of $1.75 which was the closing price of the shares on
         the date of grant. The warrants expire on January 31, 2003.

         CAPITAL LEASES

         The Company leases transportation and other equipment under capital
         leases. During 1999, the company refinanced a majority of their capital
         lease obligations with Transamerica Equipment Financial Services
         Corporation with a term loan. Future minimum lease payments for assets
         under capital leases at December 31, 1999 are as follows:

<TABLE>
                 <S>                                            <C>
                 2000                                           $  149,378
                 2001                                              109,283
                 2002                                               29,790
                                                                ----------

                 Total minimum lease payments                      288,451
                 Less amount representing interest                 (34,726)
                                                                ----------
                 Present value of minimum lease payments           253,725
                 Less current maturities                          (125,980)
                                                                ----------

                                                                $  127,745
                                                                ==========
</TABLE>

         At December 31, 1999, the Company had net assets under capital leases
         of approximately $1,047,560 included in property and equipment on the
         accompanying balance sheet.


                                      F-17

<PAGE>   54



PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997



7.       STOCK-BASED COMPENSATION PLANS

         In February 1996, the Company adopted the Professional Transportation
Group Ltd., Inc. 1996 Stock Option Plan for certain employees (the "Plan"). At
December 31, 1999, the Company reserved 2,270,948 shares of the Company's
common stock for issuance under the Plan. A summary of options granted under
the Plan as well as other options granted pursuant to other agreements during
1999, 1998 and 1997 is as follows:

<TABLE>
<CAPTION>
                                                                                                              Number of
                                                                                     Per                       Options
 Number of                                                                          Share                      Vested at
 Options                                                                          Exercise     Expiration    December 31,
 Granted        Grant Date                       Vesting                            Price         Date           1999
----------    --------------         -----------------------------------------    --------     -----------   ------------
<S>           <C>                   <C>                                           <C>          <C>           <C>
                                    100% in 2001, subject to acceleration upon
  750,000     February 1996         the achievement of certain financial goals       $0.50         2001         600,000

                                    100% on August 18, 1997 (60 days after
  250,000     February 1996         consummation of the Offering                      0.15         2001         250,000

                                    50% on August 18, 1997 (60 days after
                                    consummation of the Offering); 50% on August
                                    18, 1998 (60 days after the one-year
   50,000     February 1996         anniversary of the Offering                       4.00         2001          50,000

  250,000     April 1997            20% in 2000 and 80% in 2001                       6.00         2007               0

   46,177     July 1997             100% on January 3, 1998                           2.69         2002          46,117

   50,000     November 1997         100% on November 13, 1998                         3.69         2002          50,000

    4,000     March 1998            100% on September 13, 1998                        2.58         2008           4,000

  195,000     February 1999         100% on February 11, 19999                        2.97         2009         195,000

    8,000     May 1999              100% on May 21, 1999                              1.50         2004           8,000

  285,630     June 1999             25% a year beginning June 3, 1999                 1.44         2004          68,125

   50,000     June 1999             100% on June 3, 1999                              1.44         2004          50,000

   75,000     September 1999        100% on September 24, 1999                        1.25         2004          75,000

    2,000     December 1999         100% on June 30, 2000                              .75         2004              --

   60,000     December 1999         100% on December 3, 1999                           .75         2004          60,000

   50,000     December 1999         100% on December 31, 1999                         1.00         2004          50,000
</TABLE>


                                      F-18

<PAGE>   55



PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997



7.       STOCK-BASED COMPENSATION PLANS (CONTINUED)

         The following is a summary of stock option information for the Plans:

<TABLE>
<CAPTION>
                                                               1999         1998
                                                           ----------   ----------

               <S>                                         <C>          <C>
               Options outstanding, beginning of year       1,260,230    1,368,467
               Options granted                                725,630        4,000
               Options exercised                                   --       (1,160)
               Options terminated                                  --     (111,077)
                                                           ----------   ----------

               Options outstanding, end of year             1,985,860    1,260,230
                                                           ==========   ==========

               Options available for grant                    310,700      599,753
                                                           ==========   ==========
</TABLE>

         SFAS NO. 123

         During 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based
         Compensation," which defines a fair value-based method of accounting
         for an employee stock option or similar equity instrument and
         encourages all entities to adopt that method of accounting for all of
         their employer stock compensation plans. However, it also allows an
         entity to continue to measure compensation cost for these plans using
         the method of accounting prescribed by Accounting Principles Board
         ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees."
         Entities electing to remain with the accounting in APB No. 25 must make
         pro forma disclosures of net income and, if presented, earnings per
         share, as if the fair value-based method of accounting defined in SFAS
         No. 123 had been applied.

         The Company has elected to account for its stock-based compensation
         plans under APB No. 25, however, the Company has computed for pro forma
         disclosure purposes the value of all options granted for the years
         ended December 31, 1999, 1998 and 1997 using the Black-Scholes option
         pricing model as prescribed by SFAS No. 123 using the following
         weighted average assumptions:

<TABLE>
<CAPTION>
                                              Year of Grant/Option Price
                                   ----------------------------------------------
                                    1999        1998       1997     1997   1997
                                    $1.75       $2.58      $6.00    $3.69  $2.69
                                   -------     -------     -----   ------  -----
       <S>                         <C>          <C>       <C>      <C>     <C>
       Risk-free interest rate       5.28%       5.54%     6.99%    5.77%   5.95%
       Expected dividend yield       0.00%       0.00%     0.00%    0.00%   0.00%
       Expected lives (in years)        1           1         8        3       2
       Expected volatility         112.00%      71.00%    42.00%   42.00%  42.00%
</TABLE>


                                      F-19

<PAGE>   56



PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997



7.       STOCK-BASED COMPENSATION PLANS (CONTINUED)

         The total value of options granted for the years ended December 31,
         1999, 1998 and 1997, was computed as approximately $1,200,000, $7,000
         and $988,000, respectively, which would be amortized on a pro forma
         basis over the vesting period of the options.

         Had compensation cost been determined under SFAS No. 123 utilizing the
         assumptions detailed above, the effect on the Company's net income and
         net income per common share would have been as follows:

<TABLE>
<CAPTION>
                                                 1999             1998              1997
                                               -------------    -------------     ------------

          <S>                                  <C>              <C>               <C>
          Net loss as reported                 $ (2,894,637)     $(3,498,411)      $(1,770,300)
          Net loss including compensation        (3,744,637)      (3,798,934)       (1,986,342)
          Net EPS as reported                  $      (0.67)     $     (0.90)      $     (0.54)
          Net EPS including compensation       $      (0.87)           (0.98)            (0.61)
</TABLE>

8.       INCOME TAXES

         Prior to the Reorganization, PTG, Ltd. and two of the Subsidiaries
         elected to be treated as S corporations for federal and state income
         tax purposes. Accordingly, all income and losses of these companies
         were recognized by the shareholders on their individual tax returns.
         Truck-Net was a C corporation for federal and state income tax
         purposes.

         For all periods presented, the accompanying financial statements
         reflect provisions for income taxes computed in accordance with the
         requirements of SFAS No. 109, "Accounting for Income Taxes."

         The significant components of the provision for income taxes are as
         follows:

<TABLE>
<CAPTION>
                                               1999                1998               1997
                                        -----------------   -----------------  ----------------

               <S>                      <C>                 <C>                <C>
               Current provision        $              --   $              --  $        121,061
               Deferred provision                      --                  --           124,939
                                        -----------------   -----------------  ----------------

               Total provision          $              --   $              --  $        246,000
                                        =================   =================  ================
</TABLE>


                                      F-20

<PAGE>   57



PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997



8.       INCOME TAXES (CONTINUED)

         A reconciliation of the provision (benefit) for income taxes at the
         statutory federal income tax rate to the Company's tax provision as
         reported in the accompanying statements of operations is as follows:

<TABLE>
<CAPTION>
                                                            1999              1998            1997
                                                         ---------       -----------       ---------

         <S>                                             <C>             <C>               <C>
         Federal statutory income tax rate               $(984,000)      $(1,189,460)      $(492,000)
         State income taxes, net of federal benefit       (116,000)         (139,936)        (56,800)
         Change in tax status                                   --                --         246,000
         Change in valuation allowance                     731,126         1,281,082         500,807
         Other                                             368,874            48,314          47,993
                                                         ---------       -----------       ---------

         Total provision                                 $      --       $        --       $ 246,000
                                                         =========       ===========       =========
</TABLE>

         In connection with the Reorganization, PTG, Ltd. and the Subsidiaries,
         which had previously been treated as S corporations for tax purposes,
         were converted to C corporations. As a result of this change in tax
         status, the Company recorded an increase in its provision for income
         taxes of approximately $246,000 for the year ended December 31, 1997 to
         reflect the income taxes attributable to those entities which had
         previously been exempt from federal income taxation.

         The components of deferred income taxes are as follows:

<TABLE>
<CAPTION>
                                                      1999              1998
                                                 -----------       -----------

         <S>                                     <C>               <C>
         Deferred tax assets:
           Accounts receivable                   $   241,211       $   287,951
           Accrued liabilities                       423,559           603,226
           Net operating loss carryforwards        2,799,737         1,533,640
                                                 -----------       -----------

                                                   3,464,507         2,424,817
         Less valuation allowance                 (2,685,306)       (1,954,180)
                                                 -----------       -----------

         Net deferred tax assets                     779,201           470,637
                                                 -----------       -----------

         Deferred tax liabilities:
           Depreciation                           (1,016,410)         (707,846)
                                                 -----------       -----------

         Net deferred tax liability              $  (237,209)      $  (237,209)
                                                 ===========       ===========
</TABLE>


                                      F-21

<PAGE>   58



PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997



8.       INCOME TAXES (CONTINUED)

         A valuation allowance has been established to offset those deferred tax
         assets for which a benefit is not likely to be realized. At December
         31, 1999, the Company has approximately $6 million of net operating
         loss carryforwards which will expire beginning 2013 if not utilized.

9.       MAJOR CUSTOMERS

         The Company's five largest customers accounted for approximately 70%,
         52% and 65% of revenues for the years ended December 31, 1999, 1998 and
         1997, respectively. Of these customers, one company accounted for a
         total of approximately 41% of net revenues for the year ended December
         31, 1999. The loss of this customer would have a material adverse
         effect on the Company, its profitability, and its financial condition.
         The Company's agreement with FedEx (the Company's largest customer)
         expires in May 2000, and there can be no assurance that the agreement
         will be renewed.

10.      COMMITMENTS AND CONTINGENCIES

         OPERATING LEASES-UNRELATED PARTIES

         The Company leases transportation and office equipment under
         noncancelable operating leases with unrelated parties. The expense for
         noncancelable operating leases was approximately $3,818,000,
         $4,894,000, and $5,814,000 for the years ended December 31, 1999, 1998
         and 1997, respectively.

         Future minimum rental commitments under all noncancelable operating
         lease agreements, excluding lease agreements that expire within one
         year, are as follows as of December 31, 1999:

<TABLE>
                        <S>                                  <C>
                        2000                                 $ 3,740,796
                        2001                                   3,093,069
                        2002                                   1,981,124
                                                             -----------

                                                             $ 8,814,989
                                                             ===========
</TABLE>


                                      F-22

<PAGE>   59



PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997



10.      COMMITMENTS AND CONTINGENCIES (CONTINUED)

         LEGAL

         An involuntary bankruptcy petition was filed on or about May 26, 1998
         against Continental American, the parent corporation of Carpet
         Transport, Inc. ("CTI"), in the case styled In re: Continental American
         Transportation, Inc., Case No. 98-41900 HR, U.S. Bankruptcy Court for
         the Northern District of Georgia (Rome Division). This action was
         initiated by several parties purporting to be creditors of Continental
         American. The involuntary bankruptcy petition resulted in the
         appointment of a trustee. The trustee has pursued all bankruptcy claims
         against the Company under the CTI Properties, Inc. bankruptcy. See
         below.

         An involuntary bankruptcy petition was filed on or about August 7, 1998
         by CTI Properties, Inc., a wholly-owned subsidiary of Continental
         American, in the case styled in re: CTI Properties, Inc., Case No.
         R98-42886-HR, U.S. Bankruptcy Court for the Northern District of
         Georgia (Rome Division). The same trustee has been appointed for both
         Continental American and CTI Properties. The trustee has filed an
         adversary proceeding against the Company asserting that the Company's
         first priority security deed may be avoided as a preference. Discovery
         in this case is proceeding. The Company intends to vigorously defend
         this action. Counsel believes the likelihood of success is neither
         probable nor remote.

         On or about June 17, 1998, a lawsuit was filed against Timely North and
         the Company in the case styled CIT Finance Group v. Timely North, Inc.
         and Professional Transportation Group Ltd., Inc., Case No. 98-CV2280-2
         Superior Court of Clayton County, Georgia. This action was filed by a
         lessor of rolling stock to CTI. The complaint alleges generally that
         Timely North and the Company are indebted to CIT in an amount to be
         determined at trial, but that CIT alleges to be approximately $350,000,
         an amount disputed by the Company. While neither Timely North nor the
         Company has had any contractual relationship with CIT, CIT asserts in
         its complaint that the use of its rolling stock entitles CIT to receive
         from Timely North and the Company for the fair rental value of the
         rolling stock during the period of time that Timely North used the
         rolling stock. Timely North and the Company have timely filed answers
         to CIT's complaint, and intend to contest the case vigorously.
         Discovery in the case is progressing. Counsel believes the likelihood
         of success is neither probable nor remote.

         An involuntary bankruptcy petition was filed on or about June 17, 1998
         against CTI in the case styled In re: Carpet Transport, Inc., Case No.
         98-42224 HR, U.S. Bankruptcy Court for the Northern District of Georgia
         (Rome Division). This action was filed by several parties purporting to
         be creditors of CTI and alleges among other things that Timely North or
         its affiliates had collected a portion of CTI's receivables, that a
         representative of the Company had caused CTI's withholding tax payments
         to the IRS to be diverted to Timely North's benefit (to pay Form 2290
         taxes), and that Timely North had sold portions of CTI's equipment
         without accounting for the sales proceeds. A trustee has been appointed
         and is investigating these potential claims. The trustee has also
         questioned the receipt by the Company of a payment it received for a
         consulting and non-competition agreement. The trustee also questioned
         the fully-secured status and priority of the Company's September 12,
         1997 secured loan to CTI and


                                      F-23

<PAGE>   60



PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997



10.      COMMITMENTS AND CONTINGENCIES (CONTINUED)

         its affiliates. The Trustee has also asserted that Timely North and
         Timely Transportation are "successor" corporations of CTI and therefore
         liable for the debts of CTI and responsible to account for the revenues
         of CTI from September of 1997 to date. The trustee also questioned
         whether the Company was entitled to the proceeds of the sale of certain
         rolling stock formerly leased by CTI. The trustee has filed a Partial
         Motion for Summary Judgment against Timely Transportation and the
         Company seeking an accounting. Timely Transportation and the Company
         have responded to the Motion and vigorously deny the trustee's
         allegations that Timely Transportation and the Company owe a fiduciary
         duty to CTI. In the event that the trustee should pursue any of these
         claims against the Company or its affiliates, the Company and/or its
         affiliates will file a timely response to any such claim denying all of
         the material allegations and any liability on its part, and will
         vigorously defend against any such claim. Discovery is progressing.
         Counsel believes the likelihood of success is neither probable nor
         remote.

         On or about July 30, 1998, an action was brought against Timely and
         other defendants in the case styled The CIT Group/Equipment Financing,
         Inc. v. Timely Transportation, Inc., et al., Case No. 98-14395, Court
         of Common Pleas of Montgomery County, Pennsylvania. The plaintiff as a
         secured creditor of various defendants other than Timely alleges that
         those defendants defaulted in their installment payments to the
         plaintiff, that the plaintiff sold the collateral in a foreclosure
         sale, that the plaintiff has been damaged in the amount of
         approximately $151,000, and that Timely is a "successor" to the other
         defendants and therefore owes to CIT Group its damages. The parties
         have reached a settlement in this litigation and are in the process of
         reducing the settlement to a Consent Order.

         On or about September 4, 1998, an action was filed against the Company,
         Timely and Timely North in the case styled U.S. Bancorp Leasing &
         Financial v. Timely North, Inc., Timely Transportation, Inc. and
         Professional Transportation Group Ltd., Inc. Case No. 34611, Superior
         Court of Gordon County, Georgia. This action was filed by a lessor of
         rolling stock to CTI. The complaint alleges generally that the Company,
         Timely and Timely North, are indebted to U.S. Bancorp in an amount to
         be determined at trial. U.S. Bancorp is seeking $290,534.50, an amount
         disputed by the Company. While neither Timely, Timely North nor the
         company has had any contractual relationship with U.S. Bancorp., U.S.
         Bancorp asserts in its complaint that the use of its rolling stock
         entitles it to receive from Timely, Timely North and the Company the
         fair rental value of the rolling stock during the period of time that
         Timely North used the rolling stock. Timely, Timely North and the
         Company have filed answers to U.S. Bancorp's complaint, and intend to
         contest the case vigorously. Discovery in the case is progressing.
         Counsel believes the likelihood of success is neither probable nor
         remote.


                                      F-24

<PAGE>   61



PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997



10.      COMMITMENTS AND CONTINGENCIES (CONTINUED)

         Client Service Solutions, Inc., Professional Transportation Group Ltd.,
         Inc., Case No. 1999 CV 01909 D, State Court of Clayton County, Georgia.
         Plaintiff filed suit on May 12, 1999, seeking recovery of $87,448.62,
         plus interest and attorney's fees, allegedly owed for computer
         consulting services. The Company filed an answer denying liability and
         is vigorously defending against Plaintiff's claims, as well as
         exploring possible counterclaims for breach of contract and fraud
         against the Plaintiff.

         USF&G v. Timely Transportation, et al., Civil Action No. 98A5879-4,
         State Court of Cobb County, Georgia. USF&G is seeking recovery in the
         amount of $52,229.66 for alleged workers' compensation insurance audit
         premiums, dating back to 1994. Timely has filed an answer denying
         responsibility for such premiums and is vigorously defending against
         the suit. The case is awaiting trial.

         Scott Logistics Corp. v. Timely North, Inc. and Timely Transportation,
         Inc., Civil Action File No. 34324, Superior Court of Gordon County,
         Georgia. Scott Logistics Corporation is suing the named subsidiaries of
         the Company for $8,342.34 in alleged damages to freight, plus
         $60,000.00 for alleged damages for tortious interference with business
         relations. Timely North, Inc. is countersuing Scott Logistics Corp. for
         $9,709.23 in unpaid freight charges. Both of the named subsidiaries
         have filed an answer denying liability as alleged by the Plaintiff, and
         is vigorously defending against Plaintiff's claims. The Company intends
         to file a motion for summary judgment in the near future, requesting
         the court deny Plaintiff's claims as a matter of law.

         T.M.B., Inc. v. Timely Transportation, Inc. and Timely North, Inc.,
         Case No. 98-CV-1931, United States District Court for the Northern
         District of Georgia. T.M.B., Inc. seeks recovery from the named
         subsidiaries in the amount of $103,157.46 allegedly owed for truck
         parts. Timely North, Inc. did not contest liability, and a default
         judgment was entered in 1998 against Timely North, Inc. for the full
         amount sought by T.M.B., Inc. Timely Transportation, Inc. has filed an
         answer denying liability, and is vigorously defending against T.M.B.,
         Inc.'s claims. Cross motions for summary judgment are pending in the
         case.

         Gainey Transportation Services, Inc. v. Timely Transportation, Inc.
         Timely North, Inc. and Professional Transportation Group Ltd., Inc.,
         Case No. 98-1-5811-99, Superior Court of Cobb County, Georgia. Gainey
         Transportation Services, Inc. seeks recovery of $65,356.20 allegedly
         due from the named subsidiaries for transportation services rendered.
         Timely Transportation, Inc. and Professional Transportation Group Ltd.,
         Inc. take the position that they are not liable to Gainey, and such
         charges are owed, if at all, by Timely North, Inc. The Company has
         filed an answer and is vigorously defending against the suit.

         Ampace Dedicated Services, Inc. v. Timely Transportation, Inc. and
         Carpet Transport, Inc., Civil Action No. 34248, Superior Court of
         Gordon County, Georgia. Ampace seeks recovery of $9,100.00 for
         transportation services rendered. Timely Transportation, Inc. has filed
         an answer denying liability and is vigorously defending against the
         suit.


                                      F-25

<PAGE>   62



PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997



10.      COMMITMENTS AND CONTINGENCIES (CONTINUED)

         Gilbert Express, Inc. v. Timely North, Inc., Civil Action No.
         98VS145119E, State Court of Fulton County, Georgia. Gilbert Express,
         Inc. seeks recovery of $15,750.00 in principal, plus interest for
         transportation services allegedly rendered, and has obtained a default
         judgment against Timely North, Inc. No further significant action has
         taken place since late 1998.

         Olsten Corporation v. Timely North, Inc., Case No. 98VS144672, State
         Court of Fulton County, Georgia. The Plaintiff is seeking recovery of
         $49,926.94, plus interest for services rendered, and has obtained a
         default judgment against Timely North, Inc., but no further significant
         action has taken place since late 1998.

         L.T.D. Logistics, Inc. and Arrow Lines Services, Inc. v. Timely
         Transportation, Inc., Timely North, Inc. and Professional
         Transportation Group, Ltd., Inc., Civil Action File No. 981-6827-99,
         Superior Court of Cobb County, Georgia. The Plaintiffs seek recovery of
         $71,328.30 for services allegedly rendered. The Company has filed an
         answer denying liability, and asserting that the liability, if any, is
         solely that of Timely North, Inc. In addition, Timely North, Inc. has
         asserted set-off's to the Plaintiff's claims.

         Michelin North America, Inc. v. Professional Transportation, Ltd.,
         Inc., Case No. 2000A854-5, State Court of Cobb County, Georgia.
         Plaintiff filed suit in February 2000, seeking $56,373.19 allegedly
         past due on account for goods sold, plus interest. The time for the
         Company to file an answer has not yet run, and the Company is
         attempting to negotiate a settlement with Plaintiff.

         International Container Express, Inc. v. Truck-Net, Inc., Case No.
         99L14111, Circuit Court of Cook County, Illinois. Plaintiff filed suit
         in December 1999, seeking recovery of $98,020.77 allegedly owed by the
         Company's subsidiary, Truck-Net, Inc. for services rendered. Truck-Net,
         Inc. has retained counsel in Illinois to defend the matter. The answer
         is not yet due. The amounts owed are disputed and the Company has
         several counterclaims which it intends to assert. Settlement
         discussions are ongoing.

         Pottstown Memorial Medical Center v. Timely Transportation, Inc., Case
         No. 99-05093, Court of Common Pleas, Montgomery County, Pennsylvania.
         Plaintiff seeks recovery of $7,995.84 for services rendered. The
         Company retained Pennsylvania counsel and filed an answer denying
         liability based on the fact that the services in issue were not
         rendered to the Company, but to an unrelated third party, and
         therefore, the Company has no liability to Plaintiff.


                                      F-26

<PAGE>   63



PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997


10.      COMMITMENTS AND CONTINGENCIES (CONTINUED)

         Jefferson-Randolph Company v. Timely North, Inc., Timely
         Transportation, Inc. and Professional Transportation Group Ltd., Inc.,
         Case No. 35084, Superior Court of Gordon County, Georgia. Plaintiff
         filed suit on January 12, 1999, seeking recovery of $14,507.96 for
         services rendered. The Company has filed answers denying liability on
         the part of Timely Transportation, Inc. and Professional Transportation
         Group Ltd., Inc., and disputing the amount claimed against Timely
         North, Inc. No further proceedings have occurred in this action since
         March 18, 1999.

         In late 1999, Allied Carriers (Allied) served as a factor to the
         Company. Allied asserts that because the Company discontinued its
         relationship without notice, Allied is entitled to certain damages in
         the approximate amount of $58,000. The Company disputes Allied's
         assertions and believes that no notice of termination was required. As
         of the date of this report, this claim has not been referred to outside
         counsel. In the event that Allied should choose to litigate its claim,
         the Company intends to defend against the claim vigorously.

         US Xpress asserts that the Company is indebted to it for providing
         transportation services to the Company in the approximate amount of
         $112,000. The Company firmly believes that not only is it not indebted
         to US Xpress, but that US Xpress and its affiliates are indebted to the
         Company in the approximate amount of $10,000. In the event that US
         Xpress should choose to litigate its claim, the Company intends to
         defend against the claim vigorously and to pursue recovery of amounts
         owned to the Company.

         The Company is also subject to various other claims and legal actions
         arising in the normal course of business or through its terminated
         marketing agreement with CTI.

         Management is currently unable to determine the ultimate outcome of the
         above legal contingencies.

11.      BUSINESS SEGMENT INFORMATION

         DESCRIPTION OF THE TYPES OF SERVICES FROM WHICH EACH SEGMENT DERIVES
         ITS REVENUES

         The Company, through the Subsidiaries, provides transportation and
         logistics services primarily for the air freight and carpet industries
         throughout the continental United States. Through its Timely
         subsidiary, which was formed in 1991, the Company provides
         time-definite truckload transportation services for companies in the
         air freight and expedited delivery markets. Operating both common
         carrier and dedicated fleet services for its air freight customers,
         Timely moves freight across long and short distances with very precise
         schedules for pickups and delivery. The Company has transit times
         comparable to those of deferred air freight services. The information
         reported for Timely also includes the results of Timely North prior to
         the termination of its operations in April 1998. Through its Truck-Net
         subsidiary, which was acquired in 1991, the Company operates


                                      F-27

<PAGE>   64



PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997



11.      BUSINESS SEGMENT INFORMATION (CONTINUED)

         as a broker of truckload services to the air freight industry. Since
         many air cargo carriers and air freight forwarder do not own trucks,
         they rely upon third party carriers for ground transportation services.
         In addition, the Company had a third segment, PTG, Inc., which operated
         in the Atlanta, Georgia metropolitan area of which was terminated in
         November 1999. This service retrieved copiers, fax machines, and
         telephone equipment that are in need repair or coming off lease and
         returns such items to the manufacturer.

         MEASUREMENT OF SEGMENT PROFIT OR LOSS AND SEGMENT ASSETS

         The Company evaluates the performance of each segment separately and
         consolidates the individual results on a quarterly basis, eliminating
         intercompany sales. The accounting policies of the reportable segments
         are the same as described in the summary of significant accounting
         policies.

         FACTORS MANAGEMENT USED TO IDENTIFY THE COMPANY'S REPORTABLE SEGMENTS

         The reportable segments are subsidiaries of the Company that operate in
         distinctly separate industries and are managed separately.

         The following table summarizes revenues, operating income, total
         assets, and expenditures for long-lived assets by business segment for
         fiscal years 1999, 1998 and 1997:

<TABLE>
<CAPTION>
                                       TIMELY AND
                                      TIMELY NORTH       TRUCK-NET       PTG, INC.           TOTAL
                                      ------------       ---------       ---------           -----
         <S>                          <C>                <C>             <C>             <C>

         1999:
           Revenue                    $ 36,874,554       $6,656,770      $ 562,607       $ 44,093,931
           Segment income (loss)        (3,182,434)         582,196        (76,736)        (2,676,974)
           Depreciation                    967,532            1,612         28,539            997,683
           Segment assets                2,594,598        2,182,204       (238,082)         4,538,720

         1998:
           Revenue                      48,285,457        8,067,800        583,727         56,936,984
           Segment income (loss)        (2,603,047)         353,855       (121,402)        (2,370,594)
           Depreciation                    869,015            1,612         37,759            908,386
           Segment assets                8,777,598        2,336,421       (204,578)        10,909,441
</TABLE>


                                      F-28

<PAGE>   65



PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997



11.      BUSINESS SEGMENT INFORMATION (CONTINUED)


<TABLE>
<CAPTION>
                                       Timely and
                                      Timely North      Truck-Net      PTG, Inc.         Total
                                      ------------      ---------      ---------       ----------
         <S>                          <C>              <C>             <C>            <C>
         1997:
           Revenue                     34,270,824       8,959,413       902,476        44,132,713
           Segment income (loss)       (1,476,422)        407,491       (88,181)       (1,157,112)
           Depreciation                   345,228             945        37,481           383,654
           Segment assets              10,648,856       2,450,837       (62,171)       13,037,522
</TABLE>


         The following table reconciles segment revenues to consolidated
         revenues for the years ended December 31, 1999, 1998 and 1997:

<TABLE>
<CAPTION>
                                                         1999               1998               1997
                                                     ------------       ------------       ------------

         <S>                                         <C>                <C>                <C>
         Total revenues for reportable segments      $ 44,093,931       $ 56,936,984       $ 44,132,713
         Intercompany eliminations                     (2,737,453)        (1,870,035)        (1,067,970)
                                                     ------------       ------------       ------------

         Total consolidated revenues                 $ 41,356,478       $ 55,066,949       $ 43,064,743
                                                     ============       ============       ============
</TABLE>


         The following table reconciles segment profit to consolidated income
         for the years ended December 31, 1999, 1998 and 1997:

<TABLE>
<CAPTION>
                                                           1999              1998              1997
                                                       -----------       -----------       -----------

         <S>                                           <C>               <C>               <C>
         Total segment loss for reportable
           segments                                    $(2,676,974)      $(2,370,594)      $(1,157,112)
         Unallocated interest, net                        (162,952)         (350,823)          (55,711)
         Unallocated salaries, wages and benefits               --          (507,319)         (323,476)
         Provision for income taxes                             --                --          (246,000)
         Other unallocated amounts                         (54,711)         (269,675)           11,999
                                                       -----------       -----------       -----------

         Total consolidated loss                       $(2,894,637)      $(3,498,411)      $(1,770,300)
                                                       ===========       ===========       ===========
</TABLE>


                                      F-29

<PAGE>   66



PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997



11.      BUSINESS SEGMENT INFORMATION (CONTINUED)

         The following table reconciles segment assets to consolidated total
         assets for the years ended December 31, 1999 and 1998:

<TABLE>
<CAPTION>
                                                       1999             1998
                                                   -----------      -----------

         <S>                                       <C>              <C>
         Total assets for reportable segments      $ 4,538,720      $10,909,441
         Cash and certificate of deposit               468,537        1,003,783
         Due from former shareholder                   402,503          577,197
         Note receivable                             3,313,831        2,831,248
         Intercompany eliminations                   8,480,018        3,971,951
         Other unallocated assets                      282,307          525,099
                                                   -----------      -----------

         Total consolidated assets                 $17,485,916      $19,818,719
                                                   ===========      ===========
</TABLE>

12.      FOURTH QUARTER ADJUSTMENTS

         The Company recorded in the fourth quarter of 1999 the following
         adjustments resulting from a review and assessment of the Company's
         financial affairs following a change of ownership in December 1999:

         A)    Write-off of approximately $1,200,000 of accounts receivable.
         B)    Sales and receivables of $2,100,000, upon review of management,
               were determined to have been inappropriately recorded during the
               first three quarters of 1999.
         C)    Write-off of various liabilities amounting to approximately
               $700,000.
         D)    Other items amounting to approximately $500,000.

13.      SALE OF RAPID TRANSIT COURIER

         During September 1999, Rapid Transit Courier ("Rapid"), a subsidiary of
         the Company which owns all of the assets of a on-call and scheduled
         courier business located in the Atlanta metro area, sold certain assets
         (see below) to Central Delivery Service of Washington, Inc.
         ("Purchaser").

         The sale includes the following assets of Rapid:

         1) Customer list containing the names of customers for which Rapid
            provided services.
         2) An assignment, to the extent assignable, of all on-call and
            scheduled courier customer contracts currently in effect.
         3) Billing and accounts receivable information for the customer list.
         4) All written route instructions related to Rapid's customers.
         5) Transfer of Rapid's phone numbers to Purchaser.

         The purchase price of the sale is three percent of the revenue
         collected from the customers on the Customer List for a period of two
         years from the Closing Date remitted to Rapid on a quarterly basis. The
         amount due the Company for the three months ended December 31, 1999 was
         not material.


                                      F-30

<PAGE>   67



PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997



14.      CAPITAL STOCK

         REDUCTION IN CALL AND EXERCISE PRICE

         On April 14, 1999, the Company announced that the Board of Directors
         approved the reduction in the exercise price of its public warrants
         from $6.90 to $3.00. The call price of these warrants was also lowered
         from $10.50 to $5.00 per share. As a result of this declaration, the
         Company can call the public warrants for redemption when the closing
         price of its common stock has equaled or exceeded $5.00 per share for
         the ten consecutive days ending three days prior to the date of the
         redemption notice. At April 14, 1999, there were 1,437,500 warrants
         outstanding and trading on the Nasdaq Small Cap Market

         SERIES A PREFERRED STOCK ISSUANCE

         On October 8, 1999, the Company's board of directors adopted a
         resolution providing for an amendment to the Amended and Restated
         Articles of Incorporation of the Corporation by incorporating the
         Certificate of Designation of the Series A Preferred Stock. The number
         of authorized shares of Series A Preferred Stock shall be 3,000 shares,
         no par value. The Company is subject to penalties for late filings to
         the SEC to register the stock. Outlined below is a summary of the more
         significant rights associated with these shares:

         -        Dividend rights - the shareholders shall be entitled to
                  receive out of funds legally available, dividends at an annual
                  rate of $40 per share, payable quarterly in arrears.

         -        Voting rights - the holders of the Series A Preferred Stock
                  shall be entitled to no voting rights.

         -        Conversion rights - the holders of the Series A Preferred
                  Stock shall be convertible at any time after the dates
                  provided below until October 2001, into fully paid and
                  nonassessable shares of Common Stock. One-third of the shares
                  of Series A Preferred Stock shall be eligible for conversion
                  on or after January 1, 2000, one-third on or after February 1,
                  2000 and the final one-third on or after March 1, 2000. All
                  shares of Series A Preferred Stock will be immediately
                  eligible for conversion in the event that the average closing
                  sales price for the Company's common stock for any five
                  consecutive trading days exceeds $2.00 per share. The shares
                  of Series A Preferred Stock shall be convertible into the
                  number of shares of Common Stock that results from dividing
                  the Original Issue Price multiplied by the number of shares of
                  Series A Preferred Stock being converted by the Conversion
                  Price per share in effect at the time of conversion. The
                  conversion price per share for the Series A Preferred Stock
                  shall equal 77% of the lower of (i) $2.00 or (ii) the average
                  closing sales price for the Corporation's common stock for the
                  five trading days prior to the date of conversion.


                                      F-31

<PAGE>   68


PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997



         14.      CAPITAL STOCK (CONTINUED)

         -        Dissolution rights - in the event of any liquidation,
                  dissolution or winding up of the Corporation, after paying
                  debts and distributions to holders of Priority Stock, but
                  before any payment or distribution of the assets of the
                  Company shall be made or set apart for the holders of any
                  Junior Stock of the Company, the holder of each share of the
                  Series A Preferred Stock shall be entitled to receive from the
                  assets of the Company available for distribution, an amount in
                  cash equal to their Original Issue Price per share plus all
                  accrued and unpaid dividends. If assets remain in the
                  Corporation, after such payments, these assets would be
                  allocated on a pro rata basis to all existing shareholders as
                  if the Series A Preferred Stock had converted each share of
                  Series A Preferred Stock into the Common Stock at the
                  applicable conversion price in effect at the time of the
                  liquidation price to the aforementioned payment.

         STOCK REPURCHASE PROGRAM

         On March 29, 2000, the Board of Directors authorized the Company to
         purchase up to 600,000 shares of the Company's common stock over a
         period of one year either on the open market or in privately negotiated
         transactions.


                                      F-32

<PAGE>   69

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


Professional Transportation Group Ltd., Inc.


We have audited in accordance with generally accepted auditing standards, the
consolidated financial statements included in PROFESSIONAL TRANSPORTATION GROUP
LTD., INC.'S 1999 annual report to stockholders and this Form 10-K, and have
issued our report thereon dated April 11, 2000. Our report contains an
explanatory paragraph which makes reference to uncertainties regarding the
Company's ability to continue as a going concern. Our audit was made for the
purpose of forming an opinion on those financial statements taken as a whole.
The schedule listed in Item 14 of this Form 10-K is the responsibility of the
Company's management, is presented for purposes of complying with the Securities
and Exchange Commission's rules, and is not part of the basic financial
statements. This schedule has been subjected to the auditing procedures applied
in the audits of the basic financial statements and, in our opinion, fairly
states in all material respects the financial data required to be set forth
therein in relation to the basic financial statements taken as a whole.



/s/ Yohalem Gillman & Company LLP


New York, New York
April 11, 2000


                                       II-1
<PAGE>   70

                  PROFESSIONAL TRANSPORTATION GROUP LTD. , INC.
                        VALUATION AND QUALIFYING ACCOUNT
              FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997


<TABLE>
<CAPTION>
                                                             ADDITIONS
                                             BALANCE AT      CHARGED TO                             BALANCE
                                             BEGINNING       COSTS AND                               AT END
                                             OF PERIOD        EXPENSES           DEDUCTIONS         OF YEAR
<S>                                          <C>             <C>               <C>                 <C>
 ALLOWANCE FOR DOUBTFUL ACCOUNTS
               FOR THE YEAR ENDED:
               December 31, 1999               757,765         1,677,715        (1,800,715)(a)       634,765
               December 31, 1998               267,578           512,000           (21,813)(a)       757,765
               December 31, 1997                63,629           242,829           (38,880)(a)       267,578
</TABLE>



 (a) Write-off of uncollectible accounts.




                                      II-2
<PAGE>   71










                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                             DESCRIPTION
------                             -----------
<S>      <C>
3.1      Amended and Restated Articles of Incorporation of the Company
         (incorporated by reference to Exhibit 3.1 of the Company's Registration
         Statement on Form SB-2, No. 333-24619 (the "Registration Statement")
         and the Company's Registration Statement on Form S-3 filed on November
         15, 1999, No. 333-90955 (the "1999 S-3"))

3.2      Bylaws of the Company (incorporated by reference to Exhibit 3.2 of the
         Registration Statement)

4.1      Specimen Common Stock Certificate (incorporated by reference to Exhibit
         4.1 of the Registration Statement)

4.2      Specimen Redeemable Warrant Certificate (incorporated by reference to
         Exhibit 4.2 of the Registration Statement)

4.3      Form of Purchase Agreement for Series A Preferred Stock (incorporated
         by reference to Exhibit 4.1 of the 1999 S-3)

10.1     Professional Transportation Group Ltd., Inc. 1996 Stock Option Plan
         (incorporated by reference to Exhibit 10.1 of the Registration
         Statement)*

10.2     Employment Agreement by and between the Company and Dennis A. Bakal,
         dated April 1, 1997 (incorporated by reference to Exhibit 10.2 of the
         Registration Statement)*

10.3     Employment Agreement by and between the Company and Linda K. Roberts,
         dated April 1, 1997 (incorporated by reference to Exhibit 10.3 of the
         Registration Statement)*

10.4     Employment Agreement by and between the Company and William M. Kelly,
         dated April 1, 1997 (incorporated by reference to Exhibit 10.4 of the
         Registration Statement)*

10.5     Employment Agreement by and between the Company and Stanley E. Laiken,
         dated April 1, 1997 (incorporated by reference to Exhibit 10.5 of the
         Registration Statement)*

10.6     Form of Director's Indemnification Agreement entered into by and
         between the Company and each of its directors (incorporated by
         reference to Exhibit 10.6 of the Registration Statement)*

10.7     Transportation Agreement, dated November 19, 1995, between Timely
         Transportation, Inc. and Federal Express Corporation (incorporated by
         reference to Exhibit 10.7 of the Registration Statement)+

10.8     OmniTRACS Contract, dated May 8, 1995, by and between Timely
         Transportation, Inc. and QUALCOMM Inc. (incorporated by reference to
         Exhibit 10.8 of the Registration Statement)

10.9     Amendment No. 1 to OmniTRACS Contract, dated June 23, 1995, by and
         between Timely Transportation, Inc. and QUALCOMM Inc. (incorporated by
         reference to Exhibit 10.9 of the Registration Statement)
</TABLE>

<PAGE>   72

10.10    OmniTRACS Finance Lease, dated June 23, 1995, by and between Timely
         Transportation, Inc. and QUALCOMM Inc. (incorporated by reference to
         Exhibit 10.10 of the Registration Statement)

10.11    Sublease, dated January 1, 1997, by and between the Company and
         Professional Sales Group, Ltd. (incorporated by reference to Exhibit
         10.11 of the Registration Statement)

10.12    Amended and Restated Commercial Loan Agreement, dated March 2,1998, by
         and between the Company, Timely Transportation, Inc., Truck-Net, Inc.,
         PTG, Inc., Timely North, Inc. and SouthTrust Bank, N.A. (incorporated
         by reference to Exhibit 10.1 of the Company's current report on Form
         8-K, date of report March 2, 1998 (the "March 8-K"))

10.13    Amended, Restated and Consolidated Commercial Revolving Note, dated
         March 2, 1998, by and between the Company, Timely North, Inc., and
         SouthTrust Bank, N.A. (incorporated by reference to Exhibit 10.2 of the
         March 8-K)

10.14    Commercial Revolving Note, dated November 19, 1997, by and between the
         Company and SouthTrust Bank, N.A., in the original principal amount of
         $3.7 million (incorporated by reference to Exhibit 10.3 of the
         Company's current report on Form 8-K, date of report November 19, 1997
         (the "November 8-K"))

10.15    Amended and Restated General Security Agreement, dated November 19,
         1997, by and among the Company, Truck-Net, Inc., Timely Transportation,
         Inc., PTG, Inc., Timely North, Inc. and SouthTrust Bank, N.A.
         (incorporated by reference to Exhibit 10.5 of the November 8-K)

10.16    Reaffirmation of Guaranty, dated March 2, 1998, by and among the
         Company, Truck-Net,, Inc., Timely Transportation, Inc., PTG, Inc.,
         Dennis A. Bakal and SouthTrust Bank, N.A. (incorporated by reference to
         Exhibit 10.3 of the March 8-K)

10.17    Reaffirmation of Guaranty, dated March 2, 1998, by and among Truck-Net,
         Inc., Timely Transportation, Inc., PTG, Inc., Timely North, Inc.,
         Dennis A. Bakal and SouthTrust Bank, N.A. (incorporated by reference to
         Exhibit 10.4 of the March 8-K)

10.18    Consulting and Non-Competition Agreement, dated March 27, 1998, between
         Timely North, Inc. and CSI/Crown, Inc. (incorporated by reference to
         Exhibit 10.20 of the Company's Annual Report on Form 10-KSB for the
         year ended December 31, 1997, File No. 000-22571 (the "1997 10-K")+

10.19    First Amendment to the Professional Transportation Group Ltd., Inc.
         1996 Stock Option Plan (incorporated by reference to Exhibit A of the
         Company's proxy statement on Schedule 14A for its 1998 annual meeting
         of shareholders (the "1998 Proxy Statement"), File No. 000-22571)*

10.20    Professional Transportation Group Ltd., Inc. 1998 Director Stock Option
         Plan (incorporated by reference to Exhibit 4.3 of the Company's
         registration statement on Form S-8, File No. 333-57937)*

10.21    Professional Transportation Group Ltd., Inc. 1998 Employee Stock
         Purchase Plan (incorporated by reference to Exhibit B of the 1998 Proxy
         Statement)*

10.22    First Amendment to the Professional Transportation Group Ltd., Inc.
         1998 Employee Stock Purchase Plan (incorporated by reference to Exhibit
         10.24 of the Company's Annual Report on Form 10-K for the year ended
         December 31, 1998, File No. 000-22571)*


<PAGE>   73
<TABLE>
<S>      <C>
10.23    Debenture and Warrant Purchase Agreement (incorporated by reference to
         the Company's current report on Form 8-K, dated of report January 4,
         1999)

10.24    Loan Documents Modification Agreement, dated as of January 15, 2000, by
         and between the Company and SouthTrust Bank, N.A.

10.25    Securities Purchase Agreement, dated as of December 31, 1999, between
         Logistics Management, L.L.C., Dennis A. Bakal and the Company
         (incorporated by reference to the Company's current report on Form 8-K,
         date of report December 6, 1999)

10.26    Letter Agreement, dated as of December 31, 1999, by and between Thomson
         Kernaghan & Co. Ltd. and the Company (incorporated by reference to the
         Company's current report on Form 8-K, date of report December 31, 1999)

13.1     Portions of the Company's 1999 Annual Report to Shareholders

21.1     Subsidiaries of the Company

23.1     Consent of Yohalem, Gillman & Company

23.2     Consent of Arthur Andersen LLP

24.1     Power of Attorney (contained on the signature page of this filing)

27.1     Financial Data Schedule (for Commission purposes only)
</TABLE>

---------------
+        Confidential treatment previously granted for portions of this exhibit.

-        This agreement is a compensatory plan or arrangement required to be
         filed as an exhibit to this Form 10-K pursuant to Item 14(c).