FORM 10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2007.

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

Commission File No. 1-8129.

US 1 INDUSTRIES, INC.
______________________________________________

(Exact name of registrant as specified in its charter)

Indiana 95-3585609
_______________________ __________________________________

(State of Incorporation) (I.R.S. Employer Identification No.)

336 W. US Hwy 30, Valparaiso, Indiana 46385
________________________________________ __________

(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (219) 476-1300
_______________

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

Name of each exchange
Title of each class on which registered
_________________________ _____________________
Common Stock, no par value None

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

Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act. Yes ___ No _X_

Indicate by check mark if the registrant is not required to file reports
pursuant to section 13 or 15(d) of the Securities Act. Yes ___ No _X_

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 preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes _X_ No __

Indicate by check mark if disclosure of delinquent filers pursuant 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. [ ]

Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See definition of "accelerated filer, large accelerated filer",
and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer ____Accelerated filer ____Non-accelerated filer _X__
Smaller reporting company ____ (Do not check if a smaller reporting company)

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

The aggregate market value of the voting stock held by non-affiliates of
the registrant was $10,355,873 (based on the per share closing price on June
30, 2007, the last business day of the Company's second fiscal quarter. For
purposes of the forgoing statement, directors and officers of the registrant
have been assumed to be affiliates.

On March 20, 2008, there were 14,243,409 shares of registrant's common
stock outstanding.

TABLE OF CONTENTS

PART I

Item 1. Business 1
Item 1A. Risk Factors 5
Item 1B. Unresolved Staff Comments 7
Item 2. Properties 7
Item 3. Legal Proceedings 8
Item 4. Submission of Matters to a Vote of Security Holders 8

PART II

Item 5. Market for Registrants Common Equity, Related
Stockholder Matters, and Issuer Purchases of Equity
Securities 8
Item 6. Selected Financial Data 9
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
Item 7A. Quantitative and Qualitative Disclosures about Market Risk 20
Item 8. Financial Statements and Supplementary Data 21
Item 9 Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 37
Item 9A(T) Controls and Procedures 37
Item 9B. Other Information 38

PART III

Item 10. Directors, Executive Officers and Corporate Governance 39
Item 11. Executive Compensation 42
Item 12. Security Ownership of Certain Beneficial Owners
and Management and Related Stockholder Matters 43
Item 13. Certain Relationships, Related Transactions, and Director
Independence 45
Item 14. Principal Accountant Fees and Services 46

PART IV

Item 15 Exhibits and Financial Statement Schedules 47

SIGNATURES

PART 1

Item 1. Business

The registrant, US 1 Industries, Inc., is a holding company that owns
subsidiary operating companies, most of which are interstate trucking
companies operating in 48 states. For descriptive purposes herein, US 1
Industries, Inc. may hereinafter be referred to, together with its
subsidiaries, as "US 1" or the "Company". The Company's business consists
principally of truckload operations, for which the Company obtains a
significant percentage of its business through independent agents, who
then arrange with independent truckers to haul the freight to the desired
destination.

US 1 was incorporated in California under the name Transcon Incorporated
on March 3, 1981. In March 1994, the Company changed its name to US 1
Industries, Inc. In February 1995, the Company was merged with an Indiana
corporation for purposes of re-incorporation under the laws of the state of
Indiana. The Company's subsidiaries consist of Antler Transport, Inc.,
Blue and Grey Brokerage, Inc., Blue and Grey Transport, Inc., Bruin Motor
Express, LLC, Cam Transport, Inc., Carolina National Logistics, Inc.,
Carolina National Transportation, LLC, Five Star Transport, Inc., Freedom
Logistics, LLC, Friendly Transport, Inc., Gulf Line Brokerage, Inc., Gulf
Line Transportation, Inc., Harbor Bridge Intermodal Inc., Keystone Lines,

Inc., Keystone Logistics, Inc., Liberty Transport, Inc., Patriot Logistics,

Inc., Risk Insurance Services, LLC, TC Services, Inc., Transport Leasing,
Inc., Unity Logistics Inc., and US1 Logistics, LLC. Most of these
subsidiaries operate under authority granted by the United States Department
of Transportation (the "DOT") and various state agencies. The Company's
operating subsidiaries generally maintain separate offices, have their own
management teams, officers and directors, and are run independently of the
parent and each other.

Operations

The Company, through its subsidiaries, carries virtually all forms of
freight transported by truck, including specialized trucking services such
as containerized, refrigerated, and flatbed transportation.

The Company, through its subsidiaries, is primarily a non-asset based
business, contracting with independent truckers who generally own the
trucks they drive and independent agents who own the terminals from which
they operate. The Company pays the independent truckers and agents a
percentage of the revenue received from customers for the transportation
of goods. The expenses related to the operation of the trucks are the
responsibility of the independent contractors and the expenses related to
the operation of the terminals are the responsibility of the agents.
Certain subsidiaries of the Company also subcontract ("broker") freight
loads to other unaffiliated transportation companies. Consequently, short-
term fluctuations in operating activity have less of an impact on the
Company's net income than they have on the net income of truck
transportation companies that bear substantially all of the fixed cost
associated with the ownership of the trucks. Like other truck
transportation companies, however, US 1 Industries' revenues are affected
by competition and the state of the economy.

Marketing and Customers

The Company, through its subsidiaries, conducts the majority of its
business through a network of independent agents who are in regular contact
with shippers at the local level. The agents have facilities and personnel
to monitor and coordinate shipments and respond to shippers' needs in a
timely manner.

These agents are typically paid a commission of 6% to 13% of the
Company's revenues from the agents' trucking operations.

During 2007, the Company utilized the services of approximately 87
agents. No agent has accounted for more than 10% of revenue during 2007,
2006 or 2005. The Company shipped freight for approximately 1,000
customers in 2007, none of which accounted for more than 10% of the
Company's revenues.

Independent Contractors

The independent contractors (persons who own the trucks) used by the
Company must enter into standard equipment operating agreements. The
agreements provide that independent contractors must bear many of the costs
of operations, including drivers' compensation, maintenance costs, fuel
costs, collision insurance, taxes related to the ownership and operation of
the vehicle, licenses, and permits. These independent contractors are paid
71% to 78% of the charges billed to the customer. The Company requires
independent contractors to maintain their equipment to standards established
by the DOT, and the drivers are subject to qualification and training
procedures established by the DOT. The Company is also required to conduct
random drug testing, enforce hours of service requirements, and monitor
maintenance of vehicles.

Employees

At December 31, 2007, the Company, through its subsidiaries, had
approximately 86 full-time employees. The Company's employees are not
covered by a collective bargaining agreement.

Competition

The trucking industry is highly competitive. The Company competes
for customers primarily with other nationwide carriers, some of which have
company-owned equipment and company drivers, and many of which have greater
volume and financial resources. The Company also competes with private
carriage conducted by existing and potential customers. In addition, the
Company competes with other modes of transportation including rail.

The Company also faces competition for the services of independent
trucking contractors and agents. Agents routinely do business with a number
of carriers on an ongoing basis. The Company has attempted to develop a
strong sales agent network by maintaining a policy of prompt payment for
services rendered and providing advanced computer systems.

Competition is based on several factors such as cost, timely availability
of equipment, and quality of service.

Insurance

US 1's subsidiary trucking companies purchase liability insurance
coverage of up to $1 million per occurrence with a $5,000 to $50,000
deductible for the operation of the trucks. They also buy cargo insurance
coverage of up to $250,000 per occurrence with up to a $50,000 deductible.
The companies also purchase a commercial general liability policy with a
limit of $2,000,000 combined single limit and no deductible. The current
insurance market is volatile with significant rate changes that could
adversely affect the cost and availability of coverage. In addition, the
insurance coverage that the companies purchase may, given the recent trend
toward exorbitant jury verdicts, not be sufficient to cover losses
experienced by the companies.

One of the Company's insurance providers, American Inter-Fidelity
Exchange (AIFE), is managed by Lex Venditti, a director of the Company. The
Company has an investment of $126,461 in AIFE. AIFE provides auto liability
and cargo insurance to several subsidiaries of the Company as well as other
entities, some of which are related to the Company by common ownership. For
the years ended December 31, 2007, 2006 and 2005, cash paid to AIFE for
insurance premiums and deductibles was approximately $6,064,000, $5,366,000,
and $4,787,000, respectively.

The Company exercises no control over the operations of AIFE. As a
result, the Company recorded its investment in AIFE under the cost method
of accounting for each of the three years ended December 31, 2007, 2006, and
2005. Under the cost method, the investment in AIFE is reflected at its
original amount and income is recognized only to the extent of dividends paid
by AIFE. There were no dividends declared by AIFE for the years ended December
31, 2007, 2006 and 2005. During 2007 and 2006, a subsidiary insurance
agency of US1 Industries, Inc. recorded commissions of $353,000 and $400,000,
respectively from American Inter-fidelity Exchange. These commissions are
recorded as a reduction of insurance expense.

If AIFE incurs a net loss, the loss may be allocated to the various
policyholders based on each policyholder's premium as a percentage of the
total premiums of AIFE for the related period. There has been no such loss
assessment for any of the three years ended December 31, 2007, 2006, and 2005.
For fiscal 2007, the Company accounted for approximately 71% of the total
premium revenue of AIFE. At December 31, 2007, AIFE had a net worth of
approximately $11.3 million, part of which is attributable to other
policyholders of AIFE.

In addition, Michael Kibler, the Chief Executive Officer, and a director
of the Company and Harold Antonson, the Chief Financial Officer, and a
director of the Company, and Mr. Venditti are the sole shareholders of
American Inter-Fidelity Corporation (AIFC), which serves as the attorney in
fact of AIFE. AIFC is entitled to receive a management fee from AIFE. AIFE
incurred management fees of approximately $529,000, $579,000 and $300,000 for
the years ended December 31, 2007, 2006, and 2005, respectively. AIFC is
not consolidated with the Company.

Independent Contractor Status

From time to time, various legislative or regulatory proposals are
introduced at the federal or state levels to change the status of independent
contractors' classification to employees for either employment tax purposes
(withholding, social security, Medicare and unemployment taxes) or other
benefit purposes.

Currently, most individuals are classified as employees or independent
contractors for employment tax purposes based on 20 "common-law" factors
rather than any definition found in the Internal Revenue Code or the
regulations promulgated thereunder. In addition, under Section 530 of the
Revenue Act of 1978, taxpayers that meet certain criteria may treat
similarly situated workers as employees, if they have received a ruling from
the Internal Revenue Service or a court decision affirming their treatment,
or if they are following a long-standing recognized practice.

Although management is unaware of any proposals currently pending to
change the employee/independent contractor classification, the costs
associated with potential changes, if any, in the employee/independent
contractor classification could adversely affect the Company's results of
operations if the Company were unable to reflect them in its fee
arrangements with the independent contractors and agents or in the prices
charged to its customers.

Regulation

The Company, through its subsidiaries, is a common and contract motor
carrier regulated by the DOT and various state agencies. Among other
things, this regulation imposes requirements on the Company with regard to
the agreements that it has with owner-operators and the terms of payment to
them. The Company's independent contractor drivers also must comply with
the safety and fitness regulations promulgated by the DOT, including those
relating to drug and alcohol testing and hours of service.

The Company and its subsidiaries are subject to various federal, state,
and local environmental laws and regulations, implemented principally by the
Environmental Protection Agency (EPA) and similar state regulatory agencies,
governing the management of hazardous wastes, other discharge of pollutants
into the air and surface and underground waters, and the disposal of certain
substances. Management believes that its operations are in compliance with
current laws and regulations and does not know of any existing condition
(except as noted in the Environmental Regulation section below) that would
cause compliance with applicable environmental regulations to have a material
effect on the Company's earnings or competitive position.

Environmental Regulation

The Company's subsidiary, TC Services, Inc., owns property in Phoenix,
Arizona that was formerly leased to Transcon Lines as a terminal facility,
where soil contamination problems existed or are known to exist currently.
State environmental authorities notified the Company of potential soil
contamination from underground storage tanks, and management has been
working with the regulatory authorities to implement the required remediation.
The underground storage tanks were removed from the Phoenix facility in
February 1994. Currently the Arizona environmental authorities are requiring
further testing of the property. The Company believes it is in substantial
compliance with state and federal environmental regulations relative to the
trucking business. However, the Company is working with regulatory officials
to eliminate any sources of contamination and determine the extent of
Environmental Regulation (Continued)

existing problems. Estimates of the costs to complete the future remediation
of approximately $141,000 are accrued in the Company's consolidated financial
statements at December 31, 2007 and 2006.

Item 1A. Risk Factors

The Company makes forward-looking statements in this document and in
other materials it files with the SEC or otherwise makes public. In
addition, senior management of the Company might make forward-looking
statements orally to analysts, investors, the media and others. Statements
concerning the Company's future operations, prospects, strategies,
financial condition, future economic performance (including growth and
earnings) and demand for our services, and other statements of the Company's
plans, beliefs, or expectations, are forward-looking statements. In some
cases these statements are identifiable through the use of words such as
"anticipate, " "believe, " "estimate, " "expect, " "intend, " "plan, "
"project, " "target, " "can, " "could, " "may, " "should, " "will, " "would"
and similar expressions. You are cautioned not to place undue reliance on
these forward-looking statements. The forward-looking statements the Company
makes are not guarantees of future performance and are subject to various
assumptions, risks, and other factors that could cause actual results to
differ materially from those suggested by these forward-looking statements.
These factors include, among others, those set forth in the following
paragraphs and in the other documents that the Company files with the SEC.

The Company expressly disclaims any obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise, except as required by law.

Factors That May Affect Future Results and/or Forward-Looking Statements

Insurance Limits. The Company currently purchases insurance coverage for
commercial trucking claims with limits of up to $1,000,000 per occurrence.
Liability associated with accidents in the trucking industry is severe
(sometimes in excess of $1,000,000) and occurrences are unpredictable.
If a claim for an amount in excess of $1,000,000 was successful, it could
have a material adverse effect on US 1 and its subsidiaries, including
its results of operations and financial condition.

Increased severity or frequency of accidents and other claims. Potential
liability associated with accidents in the trucking industry is severe and
occurrences are unpredictable. While the Company generally retains
deductibles of under $50,000, a material increase in the frequency or
severity of accidents, or cargo claims or the unfavorable development of
existing claims could have a material adverse effect through increased
insurance costs on US 1 and its subsidiaries, which would adversely affect
its results of operations and financial condition.

Dependence on third-party insurance companies. The cost of insurance
coverage for commercial trucking varies dramatically, but is expensive.
Further, the ability of US 1 to purchase coverage for losses in excess of
$1,000,000 is very limited. US 1 relies on AIFE for approximately 76% of
its insurance. AIFE is managed by Lex Venditti, a director of the Company.
AIFE, in turn, retains some of the risk and reinsures the remainder.
US 1's access to affordable insurance other than through AIFE historically
has been quite limited. Should the premiums charged by AIFE increase
significantly, or should coverage be limited in any way or be unavailable,

Factors That May Affect Future Results and/or Forward-Looking
Statements (continued)

it could have a material adverse affect on the Company and its results of
operations and financial condition.

Dependence on independent commission agents. As noted above in Item 1,
"Business," the Company markets its services primarily through independent
commission agents. Currently the Company has a network of 87 agents.
During 2007, 43 of these agents generated revenue for US 1 of at least
$1,000,000 and one agent generated approximately $12,722,000, or 6.9% of
US 1's total revenue. The Company competes with motor carriers and other
third parties for the services of these independent agents. US 1's
contracts with these agents typically are terminable upon 30-days notice by
either party and do not restrict the ability of a former agent to compete
with US 1 following a termination. The loss of some of the Company's agents
or a significant decrease in volume generated by these agents could have a
materially adverse effect on US 1, including its results of operations and
revenue.

Dependence on third-party owner operators. As noted above in Item 1,
"Business," US 1 does not generally own trucks and relies on owner/operators
who operate as independent contractors and unrelated trucking companies to
transport freight for its customers. US 1 competes with other motor carriers
and third parties for the services of owner/operators. Almost all of the
freight hauled by the Company is by these owner/operators. A significant
decrease in available capacity provided by either of these parties could
have a material adverse effect on US 1, including its results of operations
and revenue.

Dependence on key personnel. The Company is dependent on the services of its
officers, particularly the officers of its subsidiaries. All of these
officers are free to leave the Company and start competing operations. None
have agreed to any covenant not to compete. Given the nature of the
relationship with the agents and owner/operators, as described above, it
would be relatively easy for the Company to lose a substantial amount of
business if one or more of these key people left and set up a competing
operation. This in turn could have a material adverse effect on the
Company, including its results of operations and revenue.

In October 2006, the Company and the general manager of Patriot Logistics,
Inc., a wholly owned subsidiary of the Company, entered into an agreement
under which the Company granted the individual the option to purchase 100%
of the outstanding stock of Patriot for a purchase price equal to the book
value of Patriot. This option to purchase Patriot was extended in 2007 and
now terminates in October 2009 or upon a change in control of the Company.
The option is immediately exercisable and maybe exercised in whole (not in
part) at anytime prior to October 2009. The fair value of this option was
determined to be deminimis. In the event the option were exercised, based
upon the actual results of Patriot Logistics, our revenue would have declined
by $39,255,861 (a decrease of 21.3%) for the year ended December 31, 2007
and $46,356,069 (a decrease of 24.3%) for the year ended December 31, 2006.
Patriot Logistics had pre-tax income (loss) of $501,522 and ($280,799) for
the year ended December 31, 2007 and 2006, respectively.

Factors That May Affect Future Results and/or Forward-Looking
Statements (continued)

Disruptions or failures in the Company's computer systems. The Company's
information technology systems used in connection with its operations are
located in Arlington Heights, IL and Valparaiso, IN. US 1 relies, in the
regular course of business, on the proper operation of its information
technology systems to link its network of customers, agents and owner
operators. These systems in turn are dependent on operation of the
Internet. Any significant disruption or failure of these systems could
significantly disrupt the Company's operations and impose significant costs
on the Company.

Status of Owner/Operators. From time to time, various legislative or
regulatory proposals are introduced at the federal or state levels to change
the status of owner/operators' classification to employees (from independent
contractors) for either employment tax purposes (withholding, social
security, Medicare and unemployment taxes) or other benefit purposes.
Currently, most individuals are classified as employees or independent
contractors for employment tax purposes based on 20 "common-law" factors
rather than any definition found in the Internal Revenue Code or the
regulations there under. In addition, under Section 530 of the Revenue Act
of 1978, taxpayers that meet certain criteria may treat similarly situated
workers as employees, if they have received a ruling from the Internal
Revenue Service or a court decision affirming their treatment, or if they are
following a long-standing recognized practice. US 1 treats its owner/
operators as independent contractors. The classification of owner/operators
as independent contractors does require significant analysis of the facts
relating to their service to the Company.

Although management is unaware of any proposals currently pending to
change the employee/independent contractor classification, the costs
associated with potential changes, if any, in the employee/independent
contractor classification could adversely affect the Company's results of
operations if the Company were unable to reflect them in its fee arrangements
with the owner/operators and agents or in the prices charged to its customers.

Credit Facility. The primary source of liquidity for US 1 is its revolving
credit facility. While this facility has provided all needed liquidity in
the recent past, there have been times in the history of US 1 where it was
not adequate. In addition, this facility contains both affirmative and
negative covenants that must be satisfied. Were the Company to fail to
satisfy those covenants, it no longer would be entitled to borrow under the
facility and there can be no assurances that an alternative borrowing
facility would be available.

Item 1b. Unresolved Staff Comments

None.

Item 2. Properties

The Company leases its administrative offices of approximately 7,000
square feet from an independent owner at 336 W. US Hwy 30, Valparaiso,
Indiana for $7,000 monthly. Patriot Logistics, Inc. leases a truck terminal
in Fort Smith, AK of approximately 13,250 square feet on a month-to-month
basis for $2,618 from Fort Smith Property, LLC which is owned by Michael E.
Kibler, the President and Chief Executive Officer and a director of the
Company, Harold E. Antonson, the Chief Financial Officer, Treasurer and a
director of the Company and Edwis Selph Sr., the terminal manager of
Patriot Logistics, Inc.

In addition, the Company's subsidiaries lease office space and land in
several locations throughout the United States, as summarized below:

Approximate Monthly Lease
Subsidiary City,State Square Feet Rent Expiration

CAM Transport, Inc. Gulfport, MS 1,130 $ 1,359 Aug. 31, 2008
Carolina National Transportation,LLC Mt. Pleasant, SC 6,280 10,085 Jun. 30, 2011
Keystone Logistics, Inc. South Bend, IN 4,400 3,463 Mth to mth
Patriot Logistics, Inc. Atlanta, GA 48,750 1,788 Aug. 31, 2008
Patriot Logistics, Inc. Charlotte, NC 500 2,750 Dec. 31, 2011
Patriot Logistics, Inc. Dallas, TX 5.0 acres 3,800 Mth to mth
Patriot Logistics, Inc. Fontana, CA 4,000 5,775 Apr 14, 2009
Patriot Logistics, Inc. French Camp, CA 1,000 1,200 Mth to mth
Patriot Logistics, Inc. Ft. Smith, AK 13,250 2,618 Mth to mth
Patriot Logistics, Inc Houston, TX 33,000 10,500 Dec. 31, 2009
Patriot Logistics, Inc Irving, TX 1,440 1,659 Apr. 7, 2010
Patriot Logistics, Inc. Jacksonville, FL 1,000 3,745 Sep. 30, 2008
Patriot Logistics, Inc Kansas City, MO 432 1,500 mth to mth
Patriot Logistics, Inc. Laredo, TX 400 1,100 mth to mth
Patriot Logistics, Inc. Memphis, TN 4,500 5,500 Jul. 13, 2011
TC Services, Inc. Valparaiso, IN 7,000 7,000 Mar. 31, 2009
Thunderbird Logistics Terrell, TX 1,700 1,400 mth to mth
Transport Leasing, Inc. Calhoun, GA 8.4 acres 7,500 mth to mth
Transport Leasing, Inc. Ft. Smith, AK 1,000 350 mth to mth
US1 Logistics, Inc. St. Augustine, FL 1,340 1,740 Mar. 31, 2008

Management believes that the Company's leased properties are adequate for
its current needs and can be retained or replaced at acceptable cost.

Item 3. Legal Proceedings

The Company and its subsidiaries are involved in various litigation
in the normal course of its business. Management intends to vigorously defend
these cases. In the opinion of management, the litigation now pending will
not have a material adverse affect on the consolidated financial statements
of the Company.

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

No Matters were submitted to a vote of Security Holders during the fourth
quarter of 2007.

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

Shares of Common Stock of the Company are listed and traded on the NASD
Electronic "bulletin board market" under the symbol "USOO".

As of December 31, 2007, there were approximately 3,051 holders of record
of the Company's Common Stock.

The Company has not paid and, for the foreseeable future, does not
anticipate paying any cash dividends on its Common Stock. The Company's
current credit agreement prohibits the payment of dividends.

The Company does not currently have any active equity compensation plans
or arrangements.

During 2007, the Company purchased 595,248 shares of its common stock for
$952,513. These shares are reflected as treasury stock in the Company's
balance sheet and statement of shareholders' equity as of and for the year
ended December 31, 2007.

The following table sets forth for the periods indicated the high and low
bid prices per share of the Common Stock as reported from quotations provided
by North American Quotations and reflect inter-dealer prices, without retail
mark-up, mark-down, or commission and may not represent actual transactions.

Calendar Year High Low

2007
First Quarter 1.97 1.35
Second Quarter 1.98 1.38
Third Quarter 1.90 1.47
Fourth Quarter 2.30 1.55

2006
First Quarter 1.38 1.12
Second Quarter 2.02 1.05
Third Quarter 2.27 1.17
Fourth Quarter 1.60 1.25

Item 6. Selected Financial Data

The selected consolidated financial data presented below have been
derived from the Company's consolidated financial statements. The
consolidated financial statements for the years ended December 31, 2007,
2006 and 2005 have been audited by the Company's registered independent
certified public accountants, whose report on such consolidated financial
statements are included herein under Item 8. The information set forth
below should be read in conjunction with the consolidated financial
statements and notes thereto under Item 8 and "Management's Discussion and
Analysis of Financial Condition and Results of Operations. "

Item 6. Selected Financial Data (Continued)

(in thousands, except shares and per share data)

Fiscal Year Ended December 31,
2007 2006 2005 2004 2003

STATEMENT OF OPERATIONS DATA:
Operating revenues $184,677 $190,976 $175,625 $149,089 $121,747
Purchased transportation 132,444 139,149 131,241 111,314 89,699
Commissions 22,406 21,866 17,243 14,294 12,348
Other operating costs
and expenses 24,826 24,999 22,659 23,425 17,977

Operating income 5,001 4,962 4,483 56 1,723

Interest expense 780 790 611 466 493

Minority interest expense 1,176 989 35 28 155

Income before income taxes 3,221 3,362 4,171 101 1,393

Income tax expense (368) (260) (54) (86) -

Net income 2,853 3,102 4,117 15 1,393

Net Income available to
common shares $ 2,853 $ 3,102 $ 4,117 $ 15 $ 1,393

Income per common share
Net Income
Basic $0.23 $0.25 $0.34 $0.00 $0.12
Diluted $0.23 $0.25 $0.34 $0.00 $0.11

Weighted average shares outstanding:
Basic 12,679,087 12,169,739 12,018,224 11,618,224 11,618,224
Diluted 12,679,087 12,169,739 12,169,739 11,964,174 11,852,507

(in thousands)

Fiscal Year Ended December 31,
2007 2006 2005 2004 2003

BALANCE SHEET DATA:
Total assets $32,157 $32,563 $33,290 $26,120 $22,077
Long-term debt, including
current portion - - 2,770 2,890 3,371
Working capital 15,272 10,272 9,508 5,145 4,888
Shareholders'equity 16,660 11,385 7,909 3,593 3,410

OTHER DATA:
Cash provided by (used in)
operating activities 5,082 3,874 (1,599) (271) 2,419
Cash (used in) provided by
investing activities (345) (281) 146 274 (128)
Cash (used in) provided by
financing activities (4,736) (3,593) 1,453 (3) (2,291)

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

Overview

Purchased transportation represents the amount an independent contractor
is paid to haul freight and is primarily based on a contractually agreed-upon
percentage of revenue generated by the haul for truck capacity provided by
independent contractors. Because the Company does not generally own its own
trucks, purchased transportation is the largest component of the Company's
operating expenses and increases or decreases in proportion to the revenue
generated through independent contractors. Commissions to agents and brokers
are similarly based on contractually agreed-upon percentages of revenue.

A majority of the Company's insurance expense is based on a percentage
of revenue and, as a result, will increase or decrease with the Company's
revenue. Potential liability associated with accidents in the trucking
industry is severe and occurrences are unpredictable. A material increase
in the frequency or severity of accidents or the unfavorable development of
existing claims could adversely affect the Company's operating income.

Historically salaries, wages, fringe benefits, and other operating
expenses had been principally non-variable expenses and remained relatively
fixed with slight changes in relationship to revenue. However, since the
Company has added certain operations, which utilize employees rather than
independent agents, these non-variable expenses may not be directly
comparable.

The following table set forth the percentage relationships of expense
items to operating revenue for the periods indicated:

Fiscal Years
--------------------------
2007 2006 2005

------ ------ ------

Revenue 100.0% 100.0% 100.0%
Operating expenses:
Purchased transportation 71.7 72.9 74.7
Agent Commissions 12.1 11.4 9.8
Insurance and claims 3.2 2.8 3.7
Litigation judgment 0.0 0.0 (1.0)
Salaries, wages and fringe benefits 6.1 6.1 6.0
Other operating expenses 4.2 4.2 4.2
Total operating expenses 97.3 97.4 97.4
Operating income 2.7% 2.6% 2.6%

Critical Accounting Policies and Estimates

US 1's financial statements reflect the selection and application of
accounting policies, which require management to make significant estimates
and assumptions. The Company believes that the evaluation of allowance for
doubtful accounts, the estimates related to contingencies and litigation are
the more critical accounting policies as they involve more significant
estimates and assumptions.
Critical Accounting Policies and Estimates (Continued)

Preparation of the consolidated financial statements in accordance
with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions affecting
the reported amounts of assets, liabilities, revenues, and expenses and
related contingent liabilities. On an on-going basis, the Company evaluates
its estimates, including those related to revenues, bad debts, income taxes,
contingencies, and litigation. The Company bases its estimates on
historical experience and on various other assumptions that are believed to
be reasonable under the circumstances. Actual results may differ from
these estimates under different assumptions or conditions.

The Company records an allowance for doubtful accounts based on (1)
specifically identified amounts that it believes to be un-collectable and (2)
an additional allowance based on certain percentages of its aged receivables,
which are determined based on historical collection experience and (3) our
assessment of the general financial conditions affecting our customer base.
At December 31, 2007, the allowance for doubtful accounts was $1,236,849 or
approximately 5% of total trade accounts receivable. If actual collections
experience changes, revisions to the Company's allowance may be required.
After reasonable attempts to collect a receivable have failed, the receivable
is written off against the allowance. In addition, US 1 reviews the
components of other receivables, consisting primarily of advances to drivers
and agents, and writes off specifically identified amounts that it believes
to be un-collectable.

Revenue for freight is recognized upon delivery. The Company accounts
for its revenue on a gross basis in accordance with EITF 99-19, "Reporting
Revenues Gross as a Principal Versus Net as an Agent". Amounts payable for
purchased transportation, commissions and insurance are accrued when
incurred.

The Company follows the guidance in EITF 99-19 and records revenues at
the gross amount billed to customers because the Company(1)determined it
operates as the primary obligor,(2)typically is responsible for damages to
goods and(3)bears the credit risk.

The Company is involved in various litigation matters in the normal
course of business. Management evaluates the likelihood of a potential
loss from the various litigation matters on a quarterly basis. When it is
probable that a loss will occur from litigation and the amount of the loss
can be reasonably estimated, the loss is recognized in the Company's
financial statements. If a potential loss is not determined to be both
probable and reasonably estimated, but there is at least a reasonable
possibility that a loss may be incurred, the litigation is not recorded in
the Company's financial statements but this litigation is disclosed in the
footnotes of the financial statements.

The Company's subsidiaries carry insurance for auto liability, property
damage, and cargo loss and damage through various programs. About 95% of
the Company's liability insurance is obtained from AIFE, a related party.
The Company's insurance liabilities are based upon the best information
currently available and are subject to revision in future periods as
additional information becomes available. Management believes it has
adequately provided for insurance claims.

Critical Accounting Policies and Estimates (Continued)

AIFE is managed by Lex Venditti, a director of the Company. The Company
has an investment of $126,461 in AIFE. AIFE provides auto liability, property
damage, and cargo loss and damage insurance coverage to several subsidiaries
of the Company as well as other entities related to the Company by common
ownership. For the years ended December 31, 2007, 2006 and 2005, cash paid
to AIFE for insurance premiums and deductibles was approximately
$6,064,000, $5,366,000, and $4,787,000, respectively.

If AIFE incurs a net loss, the loss may be allocated to the various
policyholders based on each policyholder's premium as a percentage of the
total premiums of AIFE for the related period. There has been no such loss
assessment for each of the three years ending December 31, 2007, 2006, and
2005. The subsidiaries of the Company currently account for the majority of
the premiums of AIFE. For fiscal 2007, the Company accounted for
approximately 71% of the total premium revenue of AIFE. At December 31,
2007, AIFE had net worth of approximately $11.3 million, part of which is
attributable to other policyholders of AIFE.

Deferred income taxes are recognized for the tax consequences of
"temporary differences" by applying enacted statutory tax rates applicable
to future years to differences between the financial statement carrying
amounts and the tax basis of existing assets and liabilities. At December
31, 2007, the Company's deferred tax asset of approximately $3.0 million
consists principally of net operating loss carry-forwards. The Company's
deferred tax asset has been reduced by a valuation allowance to the extent
such benefits are not expected to be fully utilized.

The Company has based its estimate of the future utilization of the
net operating loss carry-forwards upon its estimate of future taxable income
as well as the timing of expiration of the Company's net operating loss
carry-forwards. Approximately 50% of the Company's net operating loss
carry-forwards expire in 2008, with substantially all of the net operating
loss carry-forwards expiring by 2010.

At December 31, 2007 the valuation allowance for deferred tax assets was
approximately $1.2 million. If actual future taxable income differs,
revisions to the valuation allowance and net deferred tax asset may be
required.

2007 Compared to 2006

The Company's operating revenues for the 2007 fiscal year were $185
million, a decrease of $6.3 million, or 3.3%, from operating revenue for the
2006 fiscal year. The decrease is attributable to the closing of an office
at one of the Company's subsidiaries and a decrease in load volume from one
of the Company's larger customers.

2007 Compared to 2006 (Continued)

Purchased transportation and commission expense generally increase or
decrease in proportion to the revenue generated through independent
contractors. Many agents negotiate a combined percentage payable for
purchased transportation and commission. Purchased transportation and
commission expense increase or decrease in proportion to the revenue
generated through independent contractors. Purchased transportation and
commissions in total averaged 83.8% of operating revenue in fiscal 2007
versus 84.3% of operating revenue in fiscal 2006. This is a combined
decrease of 0.5% of operating revenue. Purchased transportation decreased
1.2% of operating revenue in fiscal 2007 compared to the same period of time
in 2006. This decrease was somewhat offset by in increase in commissions
of 0.7% of operating revenues for fiscal 2007 compared to fiscal 2006. The
mix between the amounts of purchased transportation paid versus commissions
paid may vary slightly based on agent negotiations with independent owner
operators. In addition, pay on certain types of revenue may be higher than
for other types of revenue. Thus a change in the mix of revenue can cause
some variation in the percent paid out for purchased transportation and
commission. However, in total, commissions and purchased transportation
would typically be expected to remain relatively consistent as a percentage
of revenue. A factor contributing to the decrease in purchased
transportation was the closing of one of the Company's offices that paid
out purchased transportation at a higher rate than is customary.

In 2003, the operation known as Patriot Logistics, Inc. began using
employees to staff the terminals rather than independent sales agent.
This operation accounted for approximately 21% and 24% of the Company's
consolidated operating revenues in 2007 and 2006, respectively.

Salaries, wages and fringe benefits remained consistent at 6.1% of
operating revenue for 2007 compared to the same period of time in 2006.

Insurance and claims increased in 2007 to 3.2% of operating revenue
compared to 2.8% of operating revenue for 2006. A majority of the
Company's insurance expense is based on a percentage of revenue and, as
a result, will tend to increase or decrease on a consolidated basis with
the Company's revenue. Potential liability associated with accidents in
the trucking industry is severe and occurrences are unpredictable. A
material increase in the frequency or severity of accidents or the
unfavorable development of existing claims could adversely affect the
Company's operating income. The 0.4% increase in the percentage of
operating revenue represented by insurance and claims between 2007 and
2006 can be attributed to the increase of certain operations' insurance
premium rates along with additional claims activity. The Company obtains
a significant amount of its auto liability and cargo insurance from AIFE,
an affiliated entity (see Note 6 to consolidated financial statements).

Other operating expenses remained consistent at 4.2% of operating
revenues. While not all operating expenses are directly variable with
revenues, the decreased revenue directly impacts several components of
operating expenses such as bad debt expense.

Based on the changes in revenue and expenses discussed above, operating
income increased $39,387 from 2006 to 2007. For the year ended December 31,
2007 the Company had operating income of 2.7% of operating revenues compared
to 2.6% of operating revenues for the same period of time in 2006.

2007 Compared to 2006 (Continued)

Interest expense decreased $10,830 in 2007 compared to 2006. This
decrease in interest expense is primarily attributable to a decrease in
outstanding borrowings. The rate on the Company's loan with US Bank is
currently based on certain financial covenants and may range from prime to
prime less .75%. At December 31, 2007 the interest rate on this loan was
prime less .75% (6.5%).

Other income includes income from rental property, storage and
equipment usage fees. Other income remained consistent at 0.09% of
operating revenues for the years ended December 31, 2007 and 2006.

The Company also recognized minority interest expense of $1.2
million and $1.0 million relating to the minority shareholders' portion
of its subsidiaries', Carolina National Transportation, LLC and US1
Logistics, LLC, net income for the years ended December 31, 2007 and 2006,
respectively. Carolina National Transportation ,LLC and US1 Logistics LLC
are each 60% owned subsidiaries of the Company.

Federal and state income tax expense increased $107,968 from $260,269
for the year ended December 31, 2006 to $368,237 for the year ended December
31, 2007. The Company has net operating loss carry-forwards of approximately
$5.1 million at December 31, 2007. These carry-forwards are available to
offset taxable income in future years and although substantially all of these
carry-forwards will expire in the years 2008 through 2010. Approximately 50%
of the Company's net operating loss carry-forwards expire in 2008.

As a result of the factors outlined above, net income in 2007 was $2.9
million compared with $3.1 million in 2006.

2006 Compared to 2005

The Company's operating revenues for the 2006 fiscal year was $191
million, an increase of $15.4 million, or 8.7%, over operating revenue for
the 2005 fiscal year. The increase was attributable to the continued growth
of Harbor Bridge Intermodal, Inc., Carolina National Transportation, LLC.
and US1 Logistics, LLC. The growth of these subsidiaries is primarily
attributable to the addition of new terminals and growth of existing
terminals.

2006 Compared to 2005 (Continued)

In 2003, the operation known as Patriot Logistics, Inc. began using
employees to staff the terminals rather than independent sales agent. This
operation accounted for approximately 24% and 27% of the Company's
consolidated operating revenues in 2006 and 2005, respectively.

Insurance and claims decreased in 2006 to 2.8% of operating revenue
compared to 3.7% of operating revenue for 2005. A majority of the Company's
insurance expense is based on a percentage of revenue and, as a result, will
increase or decrease on a consolidated basis with the Company's revenue.
Potential liability associated with accidents in the trucking industry is
severe and occurrences are unpredictable. A material increase in the
frequency or severity of accidents or the unfavorable development of
existing claims could adversely affect the Company's operating income. The
0.9% improvement in the percentage of operating revenue represented by
insurance and claims between 2006 and 2005 can be attributed to the decrease
of certain operations' claim activity for the year ended December 31, 2006.
The Company also reduced insurance and claims expense by $400,000 due to a
commission received by an insurance subsidiary of the Company for favorable
claims experience during 2006. The Company obtains a significant amount of
its auto liability and cargo insurance from AIFE, an affiliated entity (see
Note 6 to consolidated financial statements).

The $1.7 million of litigation judgment from 2004 was recovered in
2005. This recovery was the result of a settlement reached during third
quarter 2005 pertaining to a personal injury case relating to an auto
accident, which occurred in March 2001 against a subsidiary of the Company,
Cam Transport, Inc., in the amount of $1.7 million. During the third
quarter of 2005, the case was settled for $750,000 and the Company's
insurer, AIFE agreed to pay the full amount of the settlement. As a result,
the Company has recorded a recovery on this litigation of $1.7 million for
the fiscal year ended December 31, 2005.

Salaries, wages and fringe benefits increased slightly to 6.1% of
operating revenue compared to 6.0% of operating revenue for the same period
of time in 2005. This increase can be attributed to the addition of
personnel hired to accommodate the growth of expanding terminals that have
not yet begun to or did not produce at their full revenue potential.

Other operating expenses remained consistent at 4.2% of operating
revenues. While not all operating expenses are directly variable with
revenues, the increased revenue directly impacts several components of
operating expenses such as bad debt expense.

Based on the changes in revenue and expenses discussed above,
operating income increased by $0.5 million from $4.5 million in 2005 to
$5.0 million in 2006. Included in operating income for 2005 is a $1.7
million recovery relating to litigation. The Company did not incur any
such recoveries in fiscal 2006.

Interest expense increased slightly to $0.8 million in 2006 from
$0.6 million in 2005. This increase in interest expense is primarily
attributable to an increase in interest rates charged on the Company's
line of credit. The rate on the Company's loan with US Bank is currently
based on certain financial covenants and may range from prime to prime
less .50%. At December 31, 2006 the interest rate on this loan was prime
less .50% (7.75%). At December 31, 2005 the Company's interest rate on
the credit facility with its lender was at prime less .25% (7.00)

2006 Compared to 2005 (Continued)

Other income includes income from rental property, storage and
equipment usage fees. Other income decreased $0.1 million in 2006 from
2005. This decrease was due primarily to a reduction of rental income
in 2006 and the gain on the sale of equipment the Company recognized during
the first quarter of 2005 that did not occur in 2006.

The Company also recognized minority interest expense of $1.0 million
and $.35 million relating to the minority shareholders' portion of its
subsidiary's, Carolina National Transportation, LLC, net income for the years
ended December 31, 2006 and 2005, respectively. The decline in claims
experience during 2006, the decrease in management fees and the increase
in revenue resulted in an increase of net income for Carolina National
Transportation, LLC. Carolina National Transportation, LLC, is a 60%
owned subsidiary of the Company.

As a result of the factors outlined above, net income in 2006 was
$3.1 million compared with $4.1 million in 2005.

Liquidity and Capital Resources

During fiscal 2007, the Company's financial position continued to
improve. The Company had shareholders' equity of $16.7 million at December
31, 2007 compared with $11.4 million at December 31, 2006.

Net cash provided by operating activity increased $1,207,218 from
$3,874,335 for the year ended December 31, 2006 to $5,081,553 for the year
ended December 31, 2007. Net income for the year ended 2007 provided $2.9
million in cash for operations while earnings related to minority interest
provided $1.2 million in cash for operations during the same period of time.
This compared to $3.1 million of net income in 2006 with earnings related
to minority interest of $1 million for the same period.

The Company experienced a decrease in accounts receivable for the year
ended December 31, 2007 due to decreases in revenues. This decrease in
revenues is attributable to the closing of offices at one of the Company's
subsidiaries and a decrease in revenues from one of the Company's larger
customers that ultimately resulted in decreased load volume within the
Company's subsidiaries. The decrease in accounts receivable contributed to
the increase in cash provided by operating activities.

Other receivables used cash for the year ended December 31, 2007 in
the amount of $56,506 compared to $221,181 for the same period in 2006.
The largest contributor to this change is due to a commission receivable
recorded during 2006 by the Company from its insurance provider due to
favorable claims. This commission was received by the Company during 2007.
The remaining change is due to decreases in other receivables related to
the daily operations of the Company.

Prepaid expenses used $256,513 of the Company's operating cash for the
year ended December 31, 2007 compared to $718,487 for the year ended December
31, 2006. This decrease in cash usage during 2007 is the result of a
reduction in prepaid insurance from 2006. During 2006, one of the
Company's subsidiaries paid for insurance coverage based on a number of
units thus resulting in prepaid insurance. After this policy expired this
subsidiary had coverage where the cost was based on a percentage of
operating freight revenue on a monthly basis.

Liquidity and Capital Resources (continued)

Insurance and claims provided $183,694 in cash for the year ended
December 31, 2007 compared to the Company's insurance and claims using cash
in the amount of $371,643 for the year ended December 31, 2006. There are
several reasons for the increase in insurance and claims payable. New
subsidiaries that opened in late 2006 had relatively small revenues as they
had not yet begun to produce to their full potential. Since their insurance
premiums are based on a percentage of revenue, the insurance payables for
2006 were lower than in 2007 when these same offices had begun to produce
toward management's expectations. In addition, the Company's claims
payable increased for the year ended December 31, 2007 versus December
31, 2006.

Net cash used in investing activities was $345,079 for the year ended
December 31, 2007 compared to $281,177 for the year ended December 31,
2006. Net cash used in investing activities increased primarily due to
the purchase of fixed assets.

Net cash used in financing activities increased $1,143,316 from
$3,593,158 for the year ended December 31, 2006 to $4,736,474 for the year
ended December 31, 2007. For the year ended December 31, 2007, net
repayments under the line of credit were $2,017,627, compared to $3,572,574
for 2006. For the year ended December 31, 2007, the Company distributed
$1,766,334 to minority shareholders of the Company's majority owned
subsidiaries, Carolina National Transportation, LLC. and US1 Logistics,
LLC whereas no such distributions were made in 2006. In addition, during
2007 the Company utilized $952,513 to repurchase 595,248 shares of its
common stock whereas no such repurchases were made in 2006.

The Company and its subsidiaries have a $15.0 million line of credit
that matures on October 1, 2008. Advances under this revolving line of
credit are limited to 75% of eligible accounts receivable. Unused
availability under this line of credit was $13.4 million at December 31,
2007. The interest rate is based upon certain financial covenants and may
range from prime to prime less .75%. At December 31, 2007, the interest
rate on this line of credit was at prime less .75 (6.50%). The Company's
accounts receivable, property, and other assets collateralize advances under
the agreement. Borrowings up to $1.5 million are guaranteed by the Chief
Executive Officer and Chief Financial Officer of the Company. At December
31, 2007, the outstanding borrowings on this line of credit were $1.6
million compared with $3.6 million outstanding at December 31, 2006.

This line of credit is subject to termination upon various events of
default, including failure to remit timely payments of interest, fees and
principal, any adverse change in the business of the Company or failure to
meet certain financial covenants. Financial covenants include: minimum net
worth requirements, maximum total debt service coverage ratio, and
prohibition of additional indebtedness without prior authorization. At
December 31, 2007 and 2006, the Company was in compliance these financial
covenants. The balance outstanding under this line-of-credit agreement is
classified as a current liability at December 31, 2007 and 2006.
Historically the revolving line of credit has been extended prior to maturity.

On October 20, 2005, the Company and its subsidiaries entered into an
Interest Rate Swap Agreement with U.S. Bank effective November 1, 2005
through November 1, 2008. This agreement is in the notional amount of
$3,000,000. The agreement caps the interest rate at 7.71% through the term
of the agreement. The fair value of the interest rate swap was minimal at
December 31, 2007 and 2006.
Liquidity and Capital Resources (continued)

The Company had convertible notes payable of $3.6 million due to its
Chief Executive Officer and Chief Financial Officer as of December 31, 2006
that were converted into 2,668,918 shares of common stock of the company in
September 2007.

The following is a table of our contractual obligations and other commercial
commitments as of December 31, 2007 (dollars in thousands):

Less than 2-3 4-5 After
Total 1 year Years Years 5 years

Revolving Line of Credit $ 1,616 $1,616 $ - $ - $ -
Operating Leases 1,346 576 635 135 -
____________________________________________________
Total Contractual Obligations$ 2,962 $2,192 $635 $135 $ -

The Company does not have any long-term purchase commitments as of December
31, 2007.

Environmental Liabilities

Neither the Company nor its subsidiaries is a party to any Super-fund
litigation and does not have any known environmental claims against it,
except for the one property in Phoenix, Arizona owned by its subsidiary
TC Services, Inc. where soil contamination problems existed or are known
to exist currently. The Company has conducted a preliminary evaluation of
its potential liability at this site and believes that it has reserved
appropriately for remediation of the site or that the fair market value of
the property exceeds its net book value by an amount in excess of any
remediation cost. There can be no assurance, however, that the cost of
remediation would not exceed the expected amounts. The Company continues
to monitor soil contamination and may be required to remediate the property
in the near future.
Inflation

Changes in freight rates charged by the Company to their customers are
generally reflected in the cost of purchased transportation and commissions
paid by the subsidiaries to independent contractors and agents,
respectively. Therefore, management believes that future-operating results
will be affected primarily by changes in the volume of business. Rising
fuel prices are generally offset by a fuel surcharge we pass onto our
customers. However, due to the highly competitive nature of the truckload
motor carrier industry, it is possible that future freight rates, cost of
purchased transportation, as well as fuel prices may fluctuate, affecting
the Company's consolidated profitability.

Recently Issued Accounting Standards

Effective January 1, 2007, we adopted the provisions of Financial
Standards Accounting Board Interpretation No. 48, Accounting for Uncertainty
in Income Taxes ("FIN 48"). This interpretation clarifies the accounting for
uncertainty in income taxes recognized in an enterprise's financial
statements in accordance with SFAS No. 109 and prescribes a recognition
threshold of more-likely-than-not to be sustained upon examination. As a
result of the implementation of FIN 48, we recognized a $575,000 increase in
the liability for unrecognized tax benefits related to tax positions taken
in prior periods. This increase was accounted for as an adjustment to
accumulated deficit in accordance with the provisions of this statement.

In December 2007, the FASB issued SFAS No. 141(revised 2007) ("SFAS
141R"), a revision of SFAS 141, "Business Combinations." SFAS 141R
establishes requirements for the recognition and measurement of acquired
assets, liabilities, goodwill, and non-controlling interests. SFAS 141R
also provides disclosure requirements related to business combinations.
SFAS 141R is effective for fiscal years beginning after December 15, 2008.
Should they occur, the Company will apply SFAS 141R prospectively to
business combinations with an acquisition date on or after the effective
date.

In September 2006, the FASB issued SFAS No. 157, "Fair Value
Measurements." SFAS No. 157 defines fair value, establishes a framework
for measuring fair value, and expands disclosures about fair value
measurements. SFAS No. 157 is effective for financial statements issued
for fiscal years beginning after November 15, 2007. In February of 2008,
the FASB issued FASB Staff position 157-2 which delays the effective date
of SFAS 157 for non-financial assets and liabilities which are not measured
at fair value on a recurring basis (at least annually) until fiscal years
beginning after November 15, 2008. The Company is currently evaluating
the impact of the adoption of SFAS No. 157 on its consolidated financial
statements and note disclosures.

In February 2007, the FASB issued SFAS No. 159, "The Fair Value
Option for Financial Assets and Financial Liabilities." SFAS No. 159
allows entities the option to measure eligible financial instruments at
fair value as of specified dates. Such election, which may be applied on
an instrument by instrument basis, is typically irrevocable once elected.
SFAS No. 159 is effective for financial statements issued for fiscal years
beginning after November 15, 2007 and will become effective for us
beginning with the first quarter of 2008. The Company is currently
evaluating the impact of the adoption of SFAS No. 159 on its consolidated
financial statements and note disclosures.

In December 2007, the FASB issued SFAS No. 160, "Non-Controlling
Interests in Consolidated Financial Statements an amendment of ARB No. 51"
("SFAS 160"). SFAS 160 establishes new standards for the accounting for and
reporting of non-controlling interests (formerly minority interests) and for
the loss of control of partially owned and consolidated subsidiaries.
SFAS 160 does not change the criteria for consolidating a partially owned
entity. SFAS 160 is effective for fiscal years beginning after December
15, 2008. The provisions of SFAS 160 will be applied prospectively upon
adoption except for the presentation and disclosure requirements which will
be applied retrospectively. The Company is currently evaluating the impact
of the adoption of SFAS No. 160 on its consolidated financial statements.

Off-Balance Sheet Arrangements

The Company's subsidiaries obtain the majority of their auto liability
and cargo insurance from AIFE. For the years ended December 31, 2007, 2006,
and 2005, cash paid to AIFE for insurance premiums and deductibles was
approximately $6,064,000, $5,366,000, and $4,787,000, respectively. If AIFE
incurs a net loss, the loss may be allocated to the various policyholders
based on each policyholder's premium as a percentage of the total premiums of
AIFE for the related period. There has been no such loss assessment for each
of the years ended December 31, 2007, 2006, and 2005, respectively. The
Company currently accounts for the majority of the premium revenue of AIFE.
For fiscal 2007, the subsidiaries of the Company account for approximately
71% of the total premium revenue of AIFE. At December 31, 2007, AIFE had
net worth of approximately $11.3 million.

The Company has no other off-balance sheet arrangements.

Item 7a. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to the impact of interest rate changes. The Company has a
$15.0 million line of credit with a variable interest rate, which ranges from
prime (7.25% at December 31, 2007) to prime less .75%. At December 31, 2007,
the interest rate on this line of credit was at 6.50%. The outstanding balance
on this line of credit at December 31, 2007 was $1.6 million. Based on the
Company's outstanding borrowings at December 31, 2007, a 1% increase in the
prime rate would result in approximately $20,000 of additional interest
expense annually.

On October 20, 2005, the Company and its subsidiaries entered into
an Interest Rate Swap Agreement with U.S. Bank effective November 1, 2005
through November 1, 2008. This agreement is in the notional amount of
$3,000,000. The agreement caps the interest rate at 7.71% through the term
of the agreement. The fair value of the interest rate swap was minimal at
December 31, 2007 and 2006.

Item 8. Financial Statements and Supplementary Data

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of
US 1 Industries, Inc.
Valparaiso, Indiana

We have audited the accompanying consolidated balance sheets of US 1
Industries, Inc. and Subsidiaries as of December 31, 2007 and 2006 and the
related consolidated statements of income, shareholders' equity, and cash
flows for each of the three years in the period ended December 31, 2007.
In connection with our audits of the financial statements, we have also
audited the financial statement schedule listed in the accompanying index.
These financial statements and schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these financial statements and schedule based on our audits.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of US 1
Industries, Inc. and Subsidiaries at December 31, 2007 and 2006, and the
results of its operations and its cash flows for each of the three years in

the period ended December 31, 2007, in conformity with accounting principles
generally accepted in the United States of America.

Also, in our opinion, the financial statement schedule, when considered
in relation to the basic consolidated financial statements taken as a
whole, presents fairly, in all material respect, the information set
forth therein.

As disclosed in note 3 to the consolidated financial statements, effective
January 1, 2007, the Company changed its method of accounting for uncertain
tax positions to conform to FIN 48, "Accounting for Uncertainty in Income
Taxes".

/s/BDO Seidman, LLP
Chicago, Illinois
March 24, 2008

US 1 INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2007 AND 2006

ASSETS

2007 2006

CURRENT ASSETS:
Accounts receivable-trade, less
allowance for doubtful accounts of
$1,237,000 and $992,000, respectively $24,992,476 $25,764,263
Other receivables, including receivables due
from affiliated entities of $357,000 and
$691,000, respectively 3,216,146 3,159,640
Prepaid expenses and other current assets 1,147,193 649,692
Current deferred tax asset 717,400 717,400
------------ ----------
Total current assets 30,073,215 30,290,995

Property and Equipment
Land, 195,347 195,347
Equipment 1,287,873 952,675
Less accumulated depreciation and amortization (720,193) (573,501)
------------ ----------
Net property and equipment 763,027 574,521
------------ ----------
Non-current deferred tax asset 717,400 717,400
Notes receivable - Long Term 457,850 594,896
Other assets 145,049 386,037
------------- -----------
TOTAL ASSETS $32,156,541 $32,563,849
============= ===========

<FN>
The accompanying notes are an integral part of the consolidated financial statements.
</FN>

US 1 INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2007 AND 2006

LIABILITIES AND SHAREHOLDERS' EQUITY

2007 2006

CURRENT LIABILITIES:
Revolving line of credit $ 1,616,157 $ 3,633,784
Related party convertible subordinated debt,
net of Unamortized discount of $312,963
in 2006 - 3,637,037
Accounts payable 9,479,981 9,594,681
Other accrued expenses 1,039,731 1,130,170
Insurance and claims 1,691,674 1,507,980
Accrued compensation 173,896 127,381
Accrued interest 71,235 32,595
Fuel and other taxes payable 854,525 355,853
----------- -----------
Total current liabilities 14,927,199 20,019,481
----------- -----------

MINORITY INTEREST 569,047 1,159,542

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
Common stock, authorized 20,000,000 shares;
no par value; 14,838,657 and 12,169,739
shares issued, respectively.
46,920,288 42,970,288
Treasury stock, 595,248 shares and 0 shares,
respectively (952,513) -
Accumulated deficit (29,307,480) (31,585,462)
----------- -----------
Total shareholders' equity 16,660,295 11,384,826
----------- ------------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 32,156,541 $ 32,563,849
============ ============

<FN>
The accompanying notes are an integral part of the consolidated financial statements.
</FN>

US 1 INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 2007, 2006, AND 2005

2007 2006 2005

OPERATING REVENUES $184,677,131 $190,975,659 $175,625,278

OPERATING EXPENSES:
Purchased transportation 132,443,631 139,149,362 131,240,595
Commissions 22,406,181 21,865,698 17,242,997
Insurance and claims 5,816,319 5,324,667 6,531,988
Litigation Judgment (recovery) - - (1,700,000)
Salaries, wages, and other 11,281,281 11,699,451 10,442,539
Other Operating expenses 7,728,613 7,974,762 7,384,480
Total operating expenses 179,676,025 186,013,940 171,142,599
OPERATING INCOME 5,001,106 4,961,719 4,482,679

NON OPERATING INCOME (EXPENSE):
Interest income 5,153 16,927 60,814
Interest expense (779,539) (790,369) (610,785)
Other income, net 170,337 163,138 273,186
Total non operating income
(expense) (604,049) (610,304) (276,785)

NET INCOME BEFORE MINORITY INTEREST 4,397,057 4,351,415 4,205,894
Minority interest (1,175,838) (989,453) (35,143)

NET INCOME BEFORE INCOME TAXES 3,221,219 3,361,962 4,170,751
Income tax expense (368,237) (260,269) (54,203)
NET INCOME AVAILABLE TO COMMON SHARES$ 2,852,982 $ 3,101,693 $ 4,116,548

Basic Net Income Per Common Share $0.23 $0.25 $0.34

Diluted Net Income Per Common Share $0.23 $0.25 $0.34

Weighted Average Shares
Outstanding - Basic 12,679,087 12,169,739 12,018,224

Weighted Average Shares
Outstanding - Diluted 12,679,087 12,169,739 12,169,739
<FN>
The accompanying notes are an integral part of the consolidated financial statements.
</FN>

US 1 INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 2007, 2006, and 2005

Common Stock Treasury Accumulated
Shares Amount Shares Amounts Deficit Total

Balance at
December 31, 2004 11,618,224 $42,396,639 - $ - $(38,803,703) $3,592,936
Grant of restricted
common stock - 200,000 - - - 200,000
Common shares issued
to employees 400,000 - - - - -
Net Income - - - - 4,116,548 4,116,548
Balance at
December 31, 2005 12,018,224 42,596,639 (34,687,155) 7,909,484

Conversion option on
Subordinated debt - 373,649 - - - 373,649
Grant of restricted
common stock 151,515 - - - - -

Net income - - - - 3,101,693 3,101,693
Balance at
December 31, 2006 12,169,739 42,970,288 - - (31,585,462) 11,384,826

Cumulative effect of
adoption of FIN 48
- - - - (575,000) (575,000)
Treasury stock
repurchase - - (595,248) (952,513) - (952,513)
Conversion of debt into
equity 2,668,918 3,950,000 - - - 3,950,000
Net income - - - - 2,852,982 2,852,982
Balance at __________ __________ _________ _________ ___________ __________
December 31, 2007 14,838,657 $46,920,288 (595,248) $(952,513)$(29,307,480) $16,660,295

<FN>
The accompanying notes are an integral part of the consolidated financial statements.
</FN>

US 1 INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2007,2006 AND 2005

2007 2006 2005
CASH FLOWS FROM OPERATING ACTIVITIES:

Net income $ 2,852,982 $ 3,101,693 $ 4,116,548
Adjustments to reconcile net income to net

cash provided by(used in) operating activities:
Depreciation and amortization 157,234 134,196 223,286
Compensation expense resulting from
restricted stock grant to officers - - 200,000
Provision for bad debt 696,679 1,085,618 1,031,513
Amortization of discount on
convertible note 312,963 60,686 -
Minority interest 1,175,838 989,453 35,143
Deferred income tax benefit (expense) - 152,548 (387,348)
Loss (Gain) on disposal of fixed assets (661) 52,599 (107,485)
Changes in operating assets and liabilities:
Accounts receivable-trade 75,107 1,258,201 (7,088,536)
Other receivables (56,506) (221,181) (980,932)
Notes receivable 137,046 (594,896) -
Prepaid expenses and other current
assets (256,513) (718,487) (6,712)
Accounts payable (114,698) (962,722) 2,464,739
Accrued expenses (90,439) 98,797 205,958
Insurance and claims 183,694 (371,643) 537,768
Accrued interest 38,640 20,244 (61,283)
Accrued compensation 46,515 (132,220) (37,080)
Fuel and other taxes payable (76,328) (78,551) 338,937
Accrued legal - - (2,083,333)
Net cash provided by (used in) operating
activities 5,081,553 3,874,335 (1,598,817)

CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to fixed assets (369,079) (298,506) (145,701)
Proceeds from sale of fixed assets 24,000 17,329 291,520
Net cash (used in) provided by investing
activities (345,079) (281,177) 145,819

CASH FLOWS FROM FINANCING ACTIVITIES:
Net (repayments) borrowings
under line of credit (2,017,627) (3,572,574) 1,692,998
Repayments of shareholder loans - (20,584) (120,000)
Repurchase of treasury stock (952,513) - -
Distribution to minority interest (1,766,334) - (120,000)
Net cash (used in) provided by
financing activities (4,736,474) (3,593,158) 1,452,998

NET CHANGE IN CASH - - -
CASH, BEGINNING OF YEAR - - -
CASH, END OF YEAR $ - $ - $ -

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION--
Cash paid during year for interest $427,936 $770,125 $672,068

In November 2006, the long-term shareholder debt including accrued
interest of $1.2 million, was exchanged for new notes payable with revised
terms, which included a conversion option. In September 2007, the total notes
payable balance of $3,950,000 was converted into common stock when the holders
exercised the conversion feature of this debt, and the Company issued
2,668,918 shares of its common stock to the holders.

<FN>
The accompanying notes are an integral part of the consolidated financial statements.
</FN>

US 1 INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005

1. OPERATIONS

US1 Industries, Inc.(the Company), through its subsidiaries, is primarily
an interstate truckload carrier of general commodities, which uses
independent agents and owner-operators to contract for and haul freight for
its customers in 48 states with a concentration in the Southeastern United
States. No one agent accounted for more than 10% of the Company's operating
revenue for the years ended December 31, 2007, 2006 and 2005. The Company
shipped freight for approximately 1,000 customers in 2007, none of which
accounted for more than 10% of the Company's revenues.

2. RECLASSIFICATIONS

Certain reclassifications have been made to the previously reported 2005
and 2006 financial statements to conform with the 2007 presentation.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation--The consolidated financial statements
include the accounts of US 1 Industries, Inc. and its majority-owned
subsidiaries. All intercompany accounts and transactions have been
eliminated.

Fair Value of Financial Instruments-The carrying amount of cash and cash
equivalents, accounts receivable and accounts payable approximate fair value
due to the short-term nature of these instruments. The carrying amount of
outstanding borrowings approximates fair value as a variable interest rate
is charged on the outstanding balance.

Allowance for Doubtful Accounts--The subsidiaries record an allowance
for doubtful accounts based on specifically identified amounts that it
believes to be uncollectible. The Company also records an additional
allowance based on percentages of aged receivables, which are determined
based on historical collections experience and an assessment of the
general financial conditions affecting its customer base. If actual
collections experience changes, revisions to the allowance may be
required. After all attempts to collect a receivable have failed,
the receivable is written off against the allowance.

Revenue Recognition-- Revenue for freight is recognized upon delivery.
The Company accounts for its revenue on a gross basis in accordance with
EITF 99-19, "Reporting Revenue Gross as a Principal Versus Net as an Agent".
Amounts payable for purchased transportation, commissions and insurance are
accrued when incurred. The Company follows guidance of EITF 99-19 and
records revenues at the gross amount billed to customers because the Company
(1) determined it operates as the primary obligor, (2) typically is
responsible for damages to goods and (3) bears the credit risk.

Fixed Assets--Fixed assets are stated at cost and depreciated using
the straight-line method over the estimated useful lives of the related
assets, which range from three to eight years.

US 1 INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Long-Lived Assets--The Company assesses the realizability of its long-
lived assets in accordance with statement of Financial Accounting Standards
No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets".
The Company reviews long-lived assets for impairment when circumstances
indicate that the carrying amount of an asset may not be recoverable based
on the undiscounted future cash flows of the asset.

Accounting 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
dates of financial statements and the reported amounts of revenues and
expenses during the reporting periods. Actual results could differ from
those estimates.

Income Taxes--Deferred income taxes are recognized for the tax
consequences of "temporary differences" by applying enacted statutory tax
rates applicable to future years to differences between the financial
statement carrying amounts and the tax bases of existing assets. In addition,
the amounts of any future tax benefits are reduced by a valuation allowance
to the extent such benefits are not expected to be fully utilized.

Earnings Per Common Share ("FASB No. 128") --The Company computes
earnings per share under Statement of Financial Accounting Standards No.
128 "Earnings Per Share." The statement required presentation of two
amounts, basic and diluted earnings per share. Basic earnings per share
are computed by dividing income available to common stockholders by the
weighted average common shares outstanding. Dilutive earnings per share
would include all dilutive common stock equivalents.

Business Segments--Statement of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise and Related Information"
requires public enterprises to report certain information about reporting
segments in financial statements. As the Company's operating segments
exhibit similar economic characteristics and meet the aggregation criteria
of Statement 131, they are reported in one segment.

Recent Accounting Pronouncements

Effective January 1, 2007, we adopted the provisions of Financial
Standards Accounting Board Interpretation No. 48, Accounting for Uncertainty
in Income Taxes ("FIN 48"). This interpretation clarifies the accounting for
uncertainty in income taxes recognized in an enterprise's financial
statements in accordance with SFAS No. 109 and prescribes a recognition
threshold of more-likely-than-not to be sustained upon examination. As a
result of the implementation of FIN 48, we recognized a $575,000 increase in
the liability for unrecognized tax benefits related to tax positions taken in
prior periods. This increase was accounted for as an adjustment to
accumulated deficit in accordance with the provisions of this statement.

US 1 INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

In December 2007, the FASB issued SFAS No. 141(revised 2007)
("SFAS 141R"), a revision of SFAS 141, "Business Combinations. " SFAS
141R establishes requirements for the recognition and measurement of
acquired assets, liabilities, goodwill, and non-controlling interests.
SFAS 141R also provides disclosure requirements related to business
combinations. SFAS 141R is effective for fiscal years beginning after
December 15, 2008. Should they occur, the Company will apply SFAS 141R
prospectively to business combinations with an acquisition date on or after
the effective date.

In September 2006, the FASB issued SFAS No. 157, "Fair Value
Measurements. " SFAS No. 157 defines fair value, establishes a framework
for measuring fair value, and expands disclosures about fair value
measurements. SFAS No. 157 is effective for financial statements issued
for fiscal years beginning after November 15, 2007. In February of 2008,
the FASB issued FASB Staff position 157-2 which delays the effective date
of SFAS 157 for non-financial assets and liabilities which are not measured
at fair value on a recurring basis (at least annually) until fiscal years
beginning after November 15, 2008. The Company is currently evaluating
the impact of the adoption of SFAS No. 157 on its consolidated financial
statements and note disclosures.

In February 2007, the FASB issued SFAS No. 159, "The Fair Value
Option for Financial Assets and Financial Liabilities." SFAS No. 159
allows entities the option to measure eligible financial instruments at
fair value as of specified dates. Such election, which may be applied on
an instrument by instrument basis, is typically irrevocable once elected.
SFAS No. 159 is effective for financial statements issued for fiscal years
beginning after November 15, 2007 and will become effective for us
beginning with the first quarter of 2008. The Company is currently
evaluating the impact of the adoption of SFAS No. 159 on its
consolidated financial statements and note disclosures.

The provisions of SFAS 160 will be applied prospectively upon adoption
except for the presentation and disclosure requirements which will be
applied retrospectively. The Company is currently evaluating the impact of
the adoption of SFAS No. 160 on its consolidated financial statements.

US 1 INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

4. EARNINGS PER SHARE

The Company calculates earnings per share ("EPS") in accordance with
FASB No. 128. Following is the reconciliation of the numerators and
denominators of the basic and diluted EPS.

2007 2006 2005
______ ______ ______
Numerator

Net income available to common shareholders
for basic EPS $ 2,852,982 $ 3,101,693 $ 4,116,548

Interest expense and discount on
convertible debt (1) - - -

Net income available to common 2,852,982 3,101,693 4,116,548
shareholder for diluted EPS

Denominator

Weighted average common shares
outstanding for basic EPS 12,679,087 12,169,739 12,018,224

Effect of diluted securities
Unvested restricted stock granted
to employees - - 151,515

Weighted average shares outstanding
for diluted EPS (1) 12,679,087 12,169,739 12,169,739

(1) Common stock equivalents for convertible debt for all years presented
were excluded from weighted-average common shares outstanding for diluted
EPS because the effect would be anti-dilutive. This debt was converted
into 2,668,918 shares in 2007.

5. NOTES RECEIVABLE

The Company makes advances under notes receivable to certain agents
and owner operators in the normal course of its business. These notes
bear interest at rates ranging from 9.5% to 17% with weekly payments
ranging from approximately $100 - $10,000. Maturity on these notes
receivable ranges from January 2008 through July 2011. The balance of
these notes was approximately $1,027,000 and $981,000 at December 31, 2007
and December 31, 2006, respectively.

One of the larger notes receivable relates to an advance made to an
agent of the Company. Initially this advance was for $500,000, repayable
in monthly installments of $8,333, or by credit issued in the same amount
against the loan based on an agreement for continued services by the agent
to the Company with the final payment due in June 2011. The balance of this
note receivable was approximately $362,000 and $471,000 at December 31, 2007
and December 31, 2006, respectively. The current portion of this note
receivable was approximately $100,000 at December 31, 2007 and 2006.

US 1 INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

5. NOTES RECEIVABLE (Continued)

The remainder of the balance of notes receivable consists of 13 notes
resulting from advances to agents and owner operators during the normal
course of business. The remaining balance on these notes was approximately
$665,000 and $111,000 at December 31, 2007 and December 31, 2006,
respectively. The current portion of these notes receivable was
approximately $470,000 and $226,000 at December 31, 2007 and December 31,
2006, respectively.

6. RELATED PARTY TRANSACTIONS

One of the Company's subsidiaries provides safety, management, and
accounting services to companies controlled by the Chief Executive Officer
and Chief Financial Officer of the Company. These services are priced to
cover the cost of the employees providing the services. Charges related to
those services were approximately $67,000, $67,000 and $66,000 in 2007, 2006,
and 2005, respectively. Accounts receivable due from entities affiliated
through common ownership was $357,000 and $691,000 as of December 31, 2007
and 2006, respectively.

One of the subsidiaries' insurance providers, American Inter-Fidelity
Exchange (AIFE), is managed by Mr. Venditti, a director of the Company and
the Company has an investment of $126,461 in the provider. AIFE provides
auto liability and cargo insurance to several subsidiaries of the Company as
well as other entities related to the Company by common ownership. For the
years ended December 31, 2007, 2006 and 2005, cash paid to AIFE for
insurance premiums and deductibles was approximately $6,064,000, $5,366,000,
and $4,787,000, respectively, as of December 31, 2007 and 2006.

The subsidiaries exercised no control over the operations of AIFE. As a
result, the Company recorded its investment in AIFE under the cost method of
accounting for each of the three years in the period ended December 31,
2007. Under the cost method, the investment in AIFE is reflected at its
original amount and income is recognized only to the extent of dividends
paid by the investee. There were no dividends declared by AIFE for the
years ended December 31, 2007, 2006 and 2005.

If AIFE incurs a net loss, the loss may be allocated to the various
policyholders based on each policyholder's premium as a percentage of the
total premiums of AIFE for the related period. There has been no such loss
assessment for any of the three years in the period ended December 31, 2007.
The subsidiaries currently account for the majority of the premiums of AIFE.
For fiscal 2007, the Company through its subsidiaries, accounted for
approximately 71% of the total premium revenue of AIFE. At December 31,
2007, AIFE had net worth of approximately $11.3 million.

For the years ended December 31, 2007 and 2006, a subsidiary
insurance agency of the Company, recorded commission income of $353,000
and $400,000 related to premiums with AIFE. This commission income is
reflected as a reduction of insurance expense in the consolidated financial
statement of the company for the years ended December 31, 2007 and 2006,
respectively.

US 1 INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

6. RELATED PARTY TRANSACTIONS (Continued)

In addition, Mr. Kibler, the Chief Executive Officer and a director of
the Company, Mr. Antonson, the Chief Financial Officer and a director of
the Company, as well as Mr. Venditti, a director of the Company, are the
sole shareholders of American Inter-Fidelity Corporation (AIFC), which serves
as the attorney in fact of AIFE. AIFC is entitled to receive a management
fee from AIFE. AIFE incurred management fees of approximately $529,000,
$579,000, and $300,000 for the years ended December 31, 2007, 2006, and
2005, respectively. These management fees are available to be paid as
dividends to these officers and directors of the Company.

In 2007 and 2006, the Company paid consulting fees of $33,000 and
$19,000, respectively, to Robert Scissors, one of its directors, relating
to insurance services.

The Company had notes payable due to its Chief Executive Officer and
Chief Financial Officer that were converted into 2,668,918 shares of
common stock of the Company in September 2007. (see Note 9).

7. LEASES

The Company leases its administrative offices in Indiana from an
independent owner under an operating lease expiring on March 31, 2009.

In addition, the Company's subsidiaries lease office space and land
in Mississippi, Texas, Tennessee, South Carolina, Georgia, Missouri,
North Carolina, Indiana, California, Arkansas, and Florida under
operating leases ranging from one to four years.

Rent expense under these operating leases was $1,272,000, $1,186,000,
and $1,064,000 for the years ended December 31, 2007, 2006, and 2005
respectively.

Future commitments under these operating leases are as follows:

2008 $ 575,839
2009 407,574
2010 227,111
2011 135,010
2012 -
__________
$1,345,534

US 1 INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

8. BANK LINE OF CREDIT

The Company and its subsidiaries have a $15.0 million line of credit
that matures on October 1, 2008. Advances under this revolving line of
credit are limited to 75% of eligible accounts receivable. Unused
availability under this line of credit was $13.4 million at December 31,
2007. The interest rate is based upon certain financial covenants and may
range from prime to prime less .75%. At December 31, 2007, the interest
rate on this line of credit was at prime less .75% (6.50%). The Company's
accounts receivable, property, and other assets collateralize advances under
the agreement. Borrowings up to $1.5 million are guaranteed by the Chief
Executive Officer and Chief Financial Officer of the Company. At December
31, 2007 and 2006 the outstanding borrowings on this line of credit were
$1.6 million and $3.6 million, respectively.

This line of credit is subject to termination upon various events of
default, including failure to remit timely payments of interest, fees and
principal, any adverse change in the business of the Company or failure to
meet certain financial covenants. Financial covenants include: minimum net
worth requirements, maximum total debt service coverage ratio, and
prohibition of additional indebtedness without prior authorization. At
December 31, 2007 and 2006, the Company was in compliance with these
financial covenants. The balance outstanding under this line-of-credit
agreement is classified as a current liability at December 31, 2007 and 2006.

9. CONVERTIBLE SUBORDINATED DEBT

In November 2006, the long-term debt Payable to the Chief Executive
Officer and Chief Financial Officer was exchanged for new notes payable
with revised terms. In addition, the unpaid accrued interest of
approximately $1.2 million was rolled into the new notes payable balance.
As a result, the principal balance of the new notes payable net of
unamortized discount of $0.3 million was approximately $3.6 million as
of December 31, 2006. These new notes payable accrued interest at a rate of
prime less 1% with interest payable quarterly. These notes payable also had
a conversion feature at the option of the holder into common stock of the
Company at a conversion price of $1.48 per share. The conversion feature
was exercised and the outstanding balance of this debt was converted into
2,668,918 common shares on the maturity date of September 22, 2007.
Interest expense on this related party debt was $207,900, $148,000 and
$131,000 in 2007, 2006, and 2005, respectively

In 2006, based on the guidance under Emerging Issue Task Force Issue
96-19, "Debtor's Accounting for Modification or Exchange of Debt
Instruments", the Company determined the revision of this debt to be a
modification of the debt. As a result, the fair value of the conversion
option, estimated at $374,000, was reflected as a discount on the debt
and accreted as additional interest expense over the term of the debt.

US 1 INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

10. EQUITY TRANSACTIONS

(a) In September 2007, the Company's Chief Executive Officer and
Chief Financial Officer elected to exercise the conversion feature on
certain convertible debt held by these individuals. As a result, the debt
with a principal value of $3,950,000 was converted into 2,668,918 shares
of the Company's common stock.

(b) During 2007, the Company purchased 595,248 shares of its common
stock for a total of $952,513. These shares are reflected as treasury stock
in the Company's balance sheet and statement of shareholders' equity as of
and for the period ended December 31, 2007.

(c) In December 2005, the Company granted 151,515 shares (75,757 each)
of common stock to the Company's Chief Executive Officer and Chief Financial
Officer based on certain earnings criteria. These shares vested as of
January 1, 2006. As a result, the Company incurred $200,000 of compensation
expense (based on the quoted market price of the Company's stock on the date
of grant) for the year ended December 31, 2005. The shares were issued
during the first quarter of 2006.

(d) In March 2003, the Company granted 400,000 shares (200,000 each)
of common stock to the Company's Chief Executive Officer and Chief
Financial Officer, subjected to the continued employment of these
employees through December 2004. Compensation expense (based on the quoted
market price of the Company's stock on the date of grant) totaling $220,000
was recognized in 2003 and 2004. The shares were issued in the first quarter
of 2005.

11. INCOME TAXES

The composition of income tax expense (benefit) is as follows:

December 31, 2007 2006 2005
____________________________________________________________________________

Current $1,683,237 $ 1,337,044 $1,111,203
Deferred (295,000) 155,904 553,000
Benefit from operating
loss carry-forward (1,315,000) (1,076,775) (1,057,000)
Adjustment of valuation allowance 295,000 (155,904) (553,000)
____________________________________
$ 368,237 $ 260,269 $ 54,203
____________________________________

US 1 INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

11. INCOME TAXES (Continued)

The following summary reconciles income taxes at the maximum federal
statutory rate with the effective rates for 2007, 2006, and 2005:

December 31, 2007 2006 2005
_____________________________________________________________________________

Income tax expense at statutory rate $1,095,214 $1,143,067 $1,418,000
State income tax expense, net of federal 292,835 349,881 246,000
tax benefit
Adjustment of valuation allowance (1,019,812) (1,232,679) (1,609,797)
_____________________________________
$ 368,237 $ 260,269 $ 54,203
_____________________________________

The Company and its wholly-owned subsidiaries file a consolidated federal
income tax return. Carolina National, LLC and US1 Logistics, LLC the
Company's 60% owned subsidiaries file separate federal income tax returns.

Deferred income taxes consist of the following:

December 31, 2007 2006
_______________________________________________________________
Deferred tax assets
Accounts receivable reserves $ 474,733 $ 366,061
Insurance accruals 416,483 230,109
Net operating losses 1,734,696 3,049,554
____________________________________________________________
Total deferred tax assets 2,625,912 3,645,724
Less valuation reserve (1,191,112) (2,210,924)

________________________________________________________________
Total net deferred tax asset 1,434,800 1,434,800

At December 31, 2007 and 2006, the Company has realized a net deferred
tax asset of $1,434,800 as it is more likely than not that this amount will
be realized as a result of anticipated future taxable income to be generated
by the Company. Due to the uncertainty of realization, a valuation allowance
has been maintained for the remaining deferred tax asset at December 31,
2007 and 2006.

The Company has net operating loss carry-forwards of approximately
$5.1 million at December 31, 2007. These carry-forwards are available to
offset taxable income in future years and substantially all of these
carry-forwards will expire in the years 2008 through 2010. Approximately
50% of the Company's net operating loss carry forwards expire in 2008.

US 1 INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

11. INCOME TAXES (Continued)
In June 2006, FASB issued interpretation No. 48, Accounting for
Uncertainty in Income Taxes - an interpretation of FASB Statement No.
109("FIN 48"), that clarifies the accounting and recognition for income
tax positions taken or expected to be taken in the Company's tax returns.
The Company adopted FIN 48 on January 1, 2007, and recorded the
cumulative effect of a change in accounting principle by recording an
increase in the liability for uncertain tax positions of $575,000 that
was accounted for as a credit to opening retained earnings. The liability
for uncertain tax positions at both December 31, 2007 and January 1, 2007
totaled $520,000, exclusive of interest and penalties of $401,000 and
$351,000 at December 31, 2007 and January 1, 2007, respectively. This
liability is recorded in the Company's balance sheet in other taxes payable.
No uncertain tax position reserves were reversed or settled during 2007.
The entire amount of this consolidated liability for uncertain tax positions
would affect the Company's effective tax rate upon favorable resolution of
the uncertain tax positions. Absent new experience in defending these
uncertain tax positions in the various jurisdictions to which they relate,
the Company cannot currently estimate a range of possible change of the
December 31, 2007 liability over the next twelve months.

The Company files a consolidated U.S. income tax return and tax returns
in various state and local jurisdictions. In the U.S., all tax years from
2004 through the present are open. In various states and local
jurisdictions all tax years from 2000 through the present are open.

Interest and penalties related to tax positions taken in the Company's
tax returns are recorded in income tax expense in the consolidated statements
of operations.

12. COMMITMENTS AND CONTINGENCIES

Litigation

On March 16, 2005, a jury entered a verdict against a subsidiary of the
Company, Cam Transport, Inc. ("CAM") in the amount of $1.7 million in a
personal injury case relating to an auto accident which occurred on March 22,
2001. As a result, the Company recorded a charge of $1.7 million related to
this litigation for the year-ended December 31, 2004. During third quarter
of 2005 a settlement was reached in the amount of $750,000. The Company's
insurer, American Inter-Fidelity Exchange agreed to pay the full amount of
the settlement and as a result the Company recorded recovery on this
litigation of $1.7 million for the year ended December 31, 2005.

On November 4, 2005, Terrell C. Coleman and Willie B. Crocker
("Plaintiffs") filed a putative class action complaint (the "Complaint") in
the United State District Court for the Middle District of Florida (the
"Court") in Jacksonville, Florida, against Patriot Logistics, Inc.
("Patriot").

The complaint alleged that certain aspects of Patriot's motor carrier
leases with its independent-contractor owner-operators violate certain
federal leasing regulations, and sought injunctive relief, an unspecified
amount of damages, and attorney' fees. This case was settled for $315,000
in December 2006. The settlement also resulted in Patriot's entering into
a new, more detailed independent contractor operating agreement with each
of its owner-operators.
US 1 INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

12. COMMITMENTS AND CONTINGENCIES (Continued)

Litigation (Continued)

The Company and its subsidiaries are involved in other litigation in
the normal course of its business. Management intends to vigorously defend
these cases. In the opinion of management, the other litigation now pending
will not have a material adverse affect on the consolidated financial
statements of the Company.

Other

In October 2006, the Company and the general manager of Patriot
Logistics, Inc., a wholly owned subsidiary of the Company, entered into an
agreement under which the Company granted the individual the option to
purchase 100% of the outstanding stock of Patriot for a purchase price equal
to the book value of Patriot. This option to purchase Patriot was extended in
2007 and now terminates in October 2009 or upon a change in control of the
Company. The option is immediately exercisable and maybe exercised in whole
(not in part) at anytime prior to October 2009. The fair value of this option
was determined to be deminimis. In the event the option were exercised, based
upon the actual results of Patriot Logistics, our revenue would have declined
by $39,255,861 (a decrease of 21.3%) for the year ended December 31, 2007 and
$46,356,069 (a decrease of 24.3%) for the year ended December 31, 2006.
Patriot Logistics had pre-tax income (loss) of $501,522 and ($280,799) for
the years ended December 31, 2007 and 2006, respectively.

US 1 INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

13. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

(In thousands, except per share data)
Net Income
Operating Operating Net per share
Revenue Income Income basic & diluted
____________________________________________________________________

2007
$184,677 $5,001 $2,853 $0.23
____________________________________________________________________
Quarters:
Fourth 44,478 1,272 579 0.05
Third 46,378 1,278 789 0.06
Second 47,910 1,673 1,114 0.09
First 45,911 778 371 0.03
____________________________________________________________________
2006
$190,976 $4,961 $3,102 $0.25
____________________________________________________________________
Quarters:
Fourth 48,569 2,173 1,384 0.10
Third 49,505 1,207 706 0.06
Second 48,327 458 317 0.03
First 44,575 1,123 695 0.06

2007 Compared to 2006 (Continued)

US 1 INDUSTRIES, INC.
VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 2005, 2006, AND 2007

Schedule II

Balance At Charged to Write-Offs,
Beginning of Costs and Retirements & Balance At
Year Expenses Recoveries End of Year

Description

Year Ended December 31, 2005

Allowance for Doubtful

Accounts Receivable $ 1,023,000 $ 1,032,000 $ 690,000 $ 1,365,000

Valuation Reserve for
Deferred Taxes $20,028,000 $( 1,609,797)(1) $(10,800,551)(2)$ 7,617,652

Year Ended December 31, 2006

Allowance for Doubtful
Accounts Receivable $ 1,365,000 $ 1,285,000 $ 1,658,000 $ 992,000

Valuation Reserve for
Deferred Taxes $ 7,617,652 $ (1,232,679)(1) $(4,174,049)(2) $2,210,924

Year Ended December 31, 2007

Allowance for Doubtful
Accounts Receivable $ 992,000 $ 697,000 $ 942,000 $1,237,000

Valuation Reserve for
Deferred Taxes $ 2,210,924 $ (1,019,812)(1) $ - $ 1,191,112

(1) Includes benefit from utilization of net operating losses and change
in deferred taxes.
(2) Amount represents impact of net operating losses which expired
unused.

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

None.

Item 9A. Controls and Procedures.

The Company maintains disclosure controls and procedures that are
designed to ensure that information required to be disclosed in the
Company's Exchange Act reports is recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and forms,
and that such information is accumulated and communicated to the Company's
management, including its Chief Executive Officer and Chief Financial
Officer, as appropriate, to allow timely decisions regarding required
disclosure. In designing and evaluating the disclosure controls and
procedures, management recognized that any controls and procedures, no matter
how well designed and operated, can provide only reasonable assurance of
achieving the desired control objectives, and management is required to
apply its judgment in evaluating the cost-benefit relationship of possible
controls and procedures.

As required by SEC Rule 13a-15(b), the Company carried out an
evaluation, under the supervision and with the participation of the
Company's management, including the Company's Chief Executive Officer and
the Company's Chief Financial Officer, of the effectiveness of the design
and operation of the Company's disclosure controls and procedures as of the
end of the period covered by this report. Based on the foregoing, the
Company's Chief Executive Officer and Chief Financial Officer concluded that
the Company's disclosure controls and procedures were effective at the
reasonable assurance level.

Management's Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate
internal control over financial reporting for the Company. Internal control
over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of our financial reporting and the
preparation of financial statements for external purposes in accordance
with accounting principles generally accepted in the United States of
America. Internal control over financial reporting includes policies and
procedures for maintaining records that in reasonable detail accurately
and fairly reflect our transactions; providing reasonable assurance that
transactions are recorded as necessary for the preparation of our financial
statements; providing reasonable assurance that receipts and expenditures of
the Company are made in accordance with management authorization; and
providing reasonable assurance that unauthorized acquisition, use or
disposition of Company assets that could have a material effect on our
financial statements would be prevented or detected on a timely basis.
Because of inherent limitations, internal control over financial reporting
is not intended to provide absolute assurance that a misstatement of our
financial statements would be prevented or detected.

Management conducted an evaluation of the effectiveness of our
internal control over financial reporting based on the framework in Internal
Control-Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on this evaluation,
management concluded that the Company's internal control over financial
reporting was effective as of December 31, 2007.

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

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting
during the quarter ended December 31, 2007 that have materially affected, or
are reasonably likely to materially affect, our internal control over
financial reporting.

Item. 9B. Other Information

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The directors and executive officers of the Company as of March 10, 2008 were
as follows

NAME AGE POSITION
- ---- --- --------

Michael E. Kibler 67 President, Chief Executive Officer,
and Director
Harold E. Antonson 68 Chief Financial Officer, Treasurer,
and Director
Lex Venditti 55 Director
Robert I. Scissors 74 Director
Brad James 52 Director

Name Office and Experience

Michael E. Kibler Mr. Kibler is President and Chief Executive
Officer of the Company and has held these
positions since September 13, 1993 and has been
a director since 1993. He also has been
President of Enterprise Truck Lines, Inc.,
an interstate trucking company engaging in
operations similar to the Company's, since 1972.
Mr. Kibler is a partner of August Investment
Partnership and is also a shareholder of
American Inter-Fidelity Corporation, the
attorney-in-fact of AIFE, an entity that
provides auto liability and cargo insurance
to the Company.

Item 10. Directors, Executive Officers and Corporate Governance (Continued)

Harold E. Antonson Mr. Antonson is Chief Financial Officer of the
Company, a position he has held since March
1998. Mr. Antonson is a certified public
accountant. Prior to joining the Company, he
was Secretary/Treasurer of AIFE. Mr Antonson is
also a partner in August Investment Partnership.
Mr. Antonson was elected a director and
Treasurer of the Company in November 1999. Mr.
Antonson is also a shareholder of American
Interfidelity Corporation, the attorney-in-fact
of AIFE, an affiliated entity that provides auto
liability and cargo insurance to the Company.

Lex Venditti Mr. Venditti has served as a director of the
Company since 1993. Mr. Venditti is the
General Manager of AIFC, an insurance reciprocal
located in Indiana. Mr. Venditti is also a
shareholder of AIFC, the attorney-in-fact of
AIFE, an entity that provides auto liability
and cargo insurance to the Company.

Robert Scissors Mr. Scissors has been a Director of the Company
since 1993. Mr. Scissors began his career in
the Insurance Industry in 1957. In 1982, Mr.
Scissors joined a brokerage firm called
Alexander/Alexander where he worked until
retiring in 1992. Mr. Scissors currently works
as an insurance consultant and broker.

Brad James Mr. James is the President of Seagate
Transportation Services, Inc. since 1982. Mr.
James graduated from Bowling Green University
with a Bachelors Degree in Business
Administration. He has been in the trucking
industry since 1977. Mr. James was elected a
director of the Company in 1999.

There are no family relationships between any director or executive officer
of the Company.

Code of Ethics

The Company has adopted a Code of Ethics that applies to Mr. Kibler,
the Chief Executive Officer and Mr. Antonson, the Chief Financial Officer,
a copy of which was filed as Exhibit 14.1 to the Company's 2003 Form 10-K.

Audit Committee and Audit Committee Financial Expert

The Company has an audit committee consisting of Lex Venditti and
Robert Scissors. The Company's Board of Directors has determined that Mr.
Venditti is an "audit committee financial expert" as defined under SEC
rules. However, because of his position as general manager of AIFE and as
a shareholder of American Inter-Fidelity Corporation, Mr. Venditti is not
considered an independent director as defined under Rule 10A-3(b) of the
Exchange Act. In addition, Mr. Scissors receives fees for consulting
services provided to the Company and is also not considered an
independent director.

The audit committee is responsible for selecting the Company's
independent auditors and approving the scope, fees and terms of all audit
engagements and permissible non-audit services provided by the independent
auditor, as well as assessing the independence of the Company's independent
auditor from management. The audit committee also assists the Board in
oversight of the Company's financial reporting process and integrity of
its financial statements, and also reviews other matters with respect to the
Company's accounting, auditing and financial reporting practices as it may
find appropriate or may be brought to its attention.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, executive officers and persons who own more than 10% of
the outstanding common stock of the Company to file with the Securities and
Exchange Commission reports of changes in ownership of the common stock of
the Company held by such persons. Officers, directors and greater than 10%
shareholders are also required to furnish the Company with copies of all
forms they file under this regulation. During 2007, Mr. Kibler made one
late filing and Mr. Antonson made two late filings, otherwise to the
Company's knowledge based solely on a review of the copies of such reports
furnished to the Company, and representations that no other reports were
required, during the year ended December 31, 2007, all Section 16(a)
filing requirements applicable to its officers, directors and greater than
10% shareholders were complied with.

Director Nomination Procedures

The Company will consider nominations for directors submitted by
shareholders of the Company. Shareholders who wish to make a nomination
for director should send the name and biographical information with respect
to such nominee to the Secretary of the Company along with a certification
by such nominee that he or she will serve as a director of the Company if
elected. There have not been any changes to this process in the past year.

Item 11. Executive Compensation

Compensation Discussion and Analysis

Overview of Executive Compensation Program

The Company does not have a formalized program for determining
executive compensation. Any executive compensation changes are taken before
the Board of Directors for approval. In general, our executive officers
receive compensation consisting of a salary and on occasion, there have
been stock bonuses issued. Executive officers participate in the same
group health insurance program as the Company's full-time employees.
The Company has not used, nor intends to use an outside consultant in
connection with making compensation decisions.

Objectives of Compensation Program

The Company's compensation of executive officers is intended to
provide requisite compensation to the Chief Executive Officer ("CEO") and
the Chief Financial Officer ("CFO"). Because the CEO and CFO are large
shareholders of the Company, the CEO and CFO should be motivated to act in
the best interest of the Company's shareholders.

Current Executive Officers

The company currently has two executive officers, Michael Kibler, our
Chief Executive Officer "CEO", and Harold Antonson, Chief Financial
Officer "CFO".

The following Summary Compensation Table sets forth compensation paid
by the Company during the years ended December 31, 2007, 2006 and 2005 to
Mr. Michael E. Kibler, Chief Executive Officer and Mr. Harold Antonson,
Chief Financial Officer, where applicable. No other executive officer of
the Company earned in excess of $100,000.

Summary Compensation Table

Stock All Other
Name and Position Year Salary Awards Compensation Total
- ----------------- ---- ------ ----- ------------ -----

Michael Kibler 2007 $126,593 0 0 $126,593
Chief Executive Officer 2006 93,841 0 0 93,841
2005 93,696 100,000 (1) 0 193,696

Harold Antonson 2007 $122,460 0 0 $122,460
Chief Financial Officer 2006 98,071 0 0 98,071
2005 57,600 100,000 (1) 0 157,600

Item 11. Executive Compensation (Continued)

Summary Compensation Table (Continued)

(1) In March 2003, the Company granted 400,000 shares (200,000 each) of common
stock to the Company's Chief Executive Officer and Chief Financial
Officer, subject to the continued employment of these employees through
December 2004. In December 2004, the Board of Directors extended the
vesting period until March 2005. As a result, the Company incurred $0,
$125,712, and $94,286 of compensation expense (based on the quoted market
price of the Company's stock on the date of grant) for the years ended
December 31, 2005, 2004, and 2003, respectively. The shares were issued
during the first quarter of 2005.

In December 2005, the Company granted 151,514 shares (75,757 each) of common
stock to the Company's Chief Executive Officer and Chief Financial Officer
based on certain earnings criteria. These shares vested as of January 1,
2006. As a result, the Company incurred $200,000 of compensation expense
(based on the quoted market price of the Company's stock on the date of
grant) for the year ended December 31, 2005. The shares were issued in
2006.

Option exercises and option values

No stock options have been issued to Mr. Michael E. Kibler, Chief
Executive Officer or Mr. Harold Antonson, Chief Financial Officer for the
years ended December 31, 2007, 2006 or 2005 and they hold no such options as
f December 31, 2007.

COMPENSATION OF DIRECTORS

Directors who are also employees of the Company receive no additional
compensation for their services as directors. In 2007 and 2006, the Company
paid consulting fees of $33,000 and $19,000, respectively, to Robert
Scissors, relating to insurance services. The Company will reimburse its
directors for travel expenses and other out-of-pocket costs incurred in
connection with the Company's board of directors' meetings. Because the
Company has held its board of directors' meeting via teleconference during
the past year, no costs have been incurred associated with these meetings.

DIRECTOR COMPENSATION TABLE

The following table provides compensation information for the year
ended December 31, 2007 for each member of our Board of Directors.

____________________________________________________________________________________________________________
(a) (b) (c) (d) (e) (f) (g) (h)
____________________________________________________________________________________________________________
Fees Earned Non-Equity Change in
Or Incentive Plan Pension Value
Paid in Stock Option Compensation and
Name Cash Awards Awards Nonqualified
Deferred
Compensation All Other
$ $ $ $ Compensation Total
Earnings $ $

____________________________________________________________________________________________________________
Brad James - - - - - - -
Robert Scissors $33,000 - - - - - $33,000
Lex Venditti - - - - - - -
____________________________________________________________________________________________________________

COMPENSATION COMMITTEE

The Company does not have a compensation committee.

The current members of the Board of Directors (Harold Antonson,
Brad James, Michael Kibler, Robert Scissors and Lex Venditti)
participated in deliberation concerning the Company's executive officer
compensation, although the Chief Financial Officer, Harold Antonson and
Chief Executive Officer, Michael Kibler abstain from all votes. There
are no compensation committee inerlocks.

The members of the Board reviewed and discussed the compensation
discussion and analysis with management and based on the review and
discussions, determined that the compensation discussion and analysis be
included in the Company's Form 10-K.

Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Shareholder Matters:

Security Ownership of Management

The following table sets forth the number and percentage of shares of
Common Stock that as of March 9, 2008 are deemed to be beneficially owned
by each director of the Company and director nominee, by each executive
officer of the Company and by all directors and executive officers of the
company as a group

Number of Shares of
Common Stock
Name and position Beneficially Owned Percentage of Class
- ----------------- ------------------ -------------------

Harold E. Antonson 5,129,374 (1) 36.0%
Chief Financial Officer,
Treasurer and Director

Michael E Kibler 5,004,263 (1) 35.2%
Director, President and
Chief Executive Officer

Brad A. James 166,981 (2) 1.2%
Director

Robert I. Scissors, 64,770 (3) *
Director

Lex L. Venditti 217,500 (4) 1.5%
Director

Number of Shares of
Common Stock

Name and position Beneficially Owned Percentage of Class
- ----------------- ------------------ -------------------

All Directors and Executive Officers 7,998,962 56.2%
* Indicates less than 1% ownership.

(1) Includes shares held by August Investment Partnership, August Investment
Corporation, Eastern Refrigerated Transport, Inc., Enterprise Truck
Lines, Inc., Seagate Transportation Services, Inc., and American
Inter-Fidelity Exchange, of which Messrs. Kibler and Antonson are either
directors, partners, or significant shareholders or otherwise share the
voting and dispositive authority with respect to these shares.
(2) Includes shares held by Seagate Transportation Services, Inc., of which
Mr. James is a director, partner and significant shareholder.
or significant shareholder.
(3) Includes 11,770 shares held in the Saundra L. Scissors Trust of which
Mr. and Mrs. Scissors are joint trustees.
(4) Includes shares held by American Inter-Fidelity Exchange, of which Mr.
Venditti is a director and significant shareholder of the attorney-in-
fact.

Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Shareholder Matters (continued)

Security Ownership of Certain Beneficial Owners

The following table sets forth the number and percentage of shares of
Common Stock beneficially owned as of March 9, 2007 by any person who is
known to the Company to be the beneficial owner of more than five percent
of the outstanding shares of Common Stock:

Number of Shares of
Name and Address of Common Stock Percentage
Beneficial Owner Beneficially Owned of Class
- ---------------- ------------------ --------

Harold E. Antonson 5,129,374 (1) 36.0%
8400 Louisiana Street
Merrillville, IN 46410

August Investment Partnership 1,150,946 8.1%
8400 Louisiana Street
Merrillville, IN 46410

Michael Kibler 5,009,263 (1) 35.2%
8400 Louisiana Street
Merrillville, IN 46410

Item 13. Certain Relationships, Related Transactions, and Director Independence

One of the Company's subsidiaries provides safety, management, and
accounting services to companies controlled by the Chief Executive Officer
and Chief Financial Officer of the Company. These services are priced to
cover the cost of the employees providing the services. Charges related to
those services were approximately $67,000, $67,000, and $66,000 in 2007, 2006,
and 2005 respectively. Accounts receivable due from entities affiliated
through common ownership was $357,000 and $691,000 as of December 31, 2007
and 2006, respectively.

One of the subsidiaries insurance providers, AIFE, is managed by a
Director of the Company and the Company has an investment of $126,461 in the
provider. AIFE provides auto liability and cargo insurance to several
subsidiaries of the Company as well as other entities related to the Company
by common ownership. For the years ended December 31, 2007, 2006 and 2005,
cash paid to AIFE for insurance premiums and deductibles was approximately
$6,064,000, $5,366,000, and $4,787,000, respectively.

Item 13. Certain Relationships, Related Transactions, and Director Independence
(Continued)

The subsidiaries exercised no control over the operations of AIFE. As a
result, the Company recorded its investment in AIFE under the cost method
of accounting for each of the three years in the period ended December 31,
2007. Under the cost method, the investment in AIFE is reflected at its
original amount and income is recognized only to the extent of dividends paid
by the investee. There were no dividends declared by AIFE for the years
ended December 31, 2007, 2006 and 2005.

If AIFE incurs a net loss, the loss may be allocated to the various
policyholders based on each policyholder's premium as a percentage of the
total premiums of AIFE for the related period. There has been no such loss
assessment for each of the three years in the period ended December 31,
2007. The subsidiaries currently account for the majority of the premiums
of AIFE. For fiscal 2006, the Company through its subsidiaries accounted
for approximately 71% of the total premium revenue of AIFE. At December 31,
2007, AIFE had net worth of approximately $11.3 million.

For the years ended December 31, 2007 and 2006, a subsidiary insurance
agency of the Company has recorded commission income of 353,000 and
$400,000 related to premiums with AIFE.

In addition, the Chief Executive Officer and Chief Financial Officer, as
well as another director of the Company, are the sole shareholders of
American Inter-Fidelity Corporation (AIFC), which serves as the attorney in
fact of AIFE. AIFC is entitled to receive a management fee from AIFE.
AIFE incurred management fees of approximately $529,000, $579,000, and
$300,000, for the years ended December 31, 2007, 2006, and 2005,
respectively.

In 2007 and 2006, the Company paid consulting fees of $33,000 and $19,000,
respectively to Robert I. Scissors, one of its directors, relating to
insurance services.

The Company had notes payable due to its Chief Executive Officer and
Chief Financial Officer that were converted into 2,668,918 shares of
common stock of the Company in September 2007.

The Company's Board of Directors are advised of all related party transactions
and review these transactions as deemed appropriate.

The Company's directors are identified in response to Item 10 above.
The Company does not consider any of the directors to be independent.

Item 14. Principal Accountant Fees and Services

The following table shows the fees paid or accrued by the Company for
the audit and other services provided by BDO Seidman, LLP

2007 2006

Audit Fees (1) $175,000 $150,000
Audit-Related Fees(2) $ 0 $ 0
Tax Fees(2) $ 0 $ 0
All Other Fees(3) $ 0 $ 0
Total $175,000 $150,000

Item 14. Principal Accountant Fees and Services (Continued)

(1) Audit fees include fees associated with the annual audit of our
consolidated financial statements and reviews of our quarterly
reports on Form 10-Q.
(2) There were no audit related services or tax fees.
(3) There were no other services or fees.

The Audit Committee must pre-approve audit-related and non-audit
services not prohibited by law to be performed by the Company's
independent registered public accounting firm.

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a)(1) Financial Statements:

Report of Independent Registered Public Accounting Firm 21

Consolidated Balance Sheets as of December 31, 2007 and 2006 22-23

Consolidated Statements of Income for the years ended 24
December 31, 2007, 2006, and 2005

Consolidated Statements of Shareholders' Equity 25
for the years ended December 31, 2007, 2006, and 2005

Consolidated Statements of Cash Flows 26
for the years ended December 31, 2007, 2006, and 2005

Notes to Consolidated Financial Statements 27

(a)(2) Financial Statement Schedules:

Schedule of Valuation and Qualifying Accounts 37

Other schedules are not included because of the absence of the conditions
under which they are required or because the required information is
included in the consolidated financial statements or notes thereto.

(a)(3) List of Exhibits

The following exhibits, numbered in accordance with Item 601 of
Regulation S-K, are filed as part of this report:

Exhibit 3.1 Articles of Incorporation of the Company.
(incorporated herein by reference to the Company's Proxy
Statement of November 9, 1993).

Exhibit 3.2 By-Laws of the Company.
(incorporated herein by reference to the Company's Annual
Report on Form 10-K for the year ended December 31, 1994).

Exhibit 10.1 Amended and Restated Loan Agreement with US BANK and Carolina
National Transportation Inc., Gulfline Transport Inc.,Five Star
Transport, Inc., Cam Transport, Inc., Unity Logistic Services,
Inc., ERX, Inc., Friendly Transport, Inc., Transport Leasing,
Inc., Harbor Bridge Intermodal, Inc., Patriot Logistics, Inc.,
Liberty Transport, Inc., Keystone Lines Corporation, and US
1 Industries, Inc. (incorporated by reference to the Company's
Form 10-Q for the nine months ended September 30, 2005 filed
on November 11, 2005).

Exhibit 10.2 Amendment to Amended and Restated Loan Agreement with US
BANK and Carolina National, Transportation Inc., Gulfline
Transport Inc., Five Star Transport, Inc., Cam Transport,
Inc., Unity Logistic Services, Inc., ERX, Inc., Friendly,
Transport, Inc., Transport Leasing, Inc., Harbor Bridge
Intermodal, Inc., Patriot Logistics, Inc., Liberty Transport,
Inc., Keystone Lines Corporation, and US 1 Industries, Inc.
(incorporated by reference to the Company's Form 10-Q for
the nine Months ended September 30, 2005 filed on November
11, 2005).

Exhibit 10.3 Second Amendment to Amended and Restated Loan Agreement with
US BANK and Carolina National, Transportation Inc., Gulfline
Transport Inc., Five Star Transport, Inc., Cam Transport,
Inc., Unity Logistic Services, Inc., ERX, Inc., Friendly,
Transport, Inc., Transport Leasing, Inc., Harbor Bridge
Intermodal, Inc., Patriot Logistics, Inc., Liberty Transport,
Inc., Keystone Lines Corporation, and US 1 Industries, Inc.
(incorporated by reference to the Company's Form 10-Q for the
nine months ended September 30, 2005 filed on November 11, 2005).

Exhibit 10.4 Amendment to Amended and Restated Loan Agreement with US BANK
and Carolina National, Transportation LLC, Gulfline Transport
Inc.,Five Star Transport, Inc., Cam Transport, Inc., Unity
Logistic Services, Inc., ERX, Inc., Friendly, Transport, Inc.,
Transport Leasing, Inc., Harbor Bridge Intermodal, Inc.,
Patriot Logistics, Inc., Liberty Transport, Inc., Keystone
Lines Corporation, TC Services, Inc., Freedom Logistics, LLC,
Thunderbird Logistics, LLC, Thunderbird Motor Express, LLC,
US1 Logistics, LLC, and US 1 Industries, Inc.

Exhibit 14.1 US 1 Industries, Inc. Code of Ethics (incorporated by
reference to the Company's Form 10-K for the year ended December
31, 2003 filed on March 26, 2005.

Exhibit 21.1 Subsidiaries of the Registrant

Exhibit 31.1 Rule 13a-14(a)\15d-14a(a) Certifications

Exhibit 32.1 Section 1350 Certifications

SIGNATURES

Pursuant to the requirements of Sections 13 and 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned there unto duly authorized.

US 1 INDUSTRIES, INC.

Date:_________________ By: _________________________
Michael E. Kibler
President & Chief Executive Officer
(Principal Executive Officer)

Date:_________________ By: _________________________
Harold Antonson
Chief Financial Officer & Treasurer
(Principal Financial & Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.

Date:_________________ _________________________
Michael E. Kibler, Director

Date:_________________ _________________________
Robert I. Scissors, Director

Date:_________________ _________________________
Lex L. Venditti, Director

Date:_________________ _________________________
Brad James, Director

Date:_________________ _________________________
Harold Antonson, Director