UNITED STATES SECURITIES AND EXCHANGE
COMMISSION Washington, D.C. 20549 **FORM 10-Q**   [X] QUARTERLY REPORT UNDER
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For
the quarterly period ended September 30, 2008   [   ] TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT  For
the transition period from __________ to __________  Commission
File Number 000-31377  Reflect
Scientific, Inc. (Exact name of
registrant as specified in its charter)  Utah 87-0642556 (State
or other jurisdiction of (IRS
Employer Identification No.) incorporation
or organization)  1270 South
1380 West Orem, Utah   84058 (Address
of principal executive offices) (Zip Code)  (801)
226-4100 (Registrants telephone number, including area code)  Indicate by
check mark whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes [X]
  No [   ]  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
definitions of large accelerated filer, accelerated filer, and smaller
reporting company in Rule 12b-2 of the Exchange Act.  Large
Accelerated filer  ̈ Accelerated
filer  ̈ Non-accelerated
filer   ̈ (Do not check if a
smaller reporting company) Smaller
reporting company x  Indicate by check mark
whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes
[  ]   No [X]  Indicate the number of
shares outstanding of each of the issuers classes of common equity, as of the
latest practicable date. 34,423,802
shares of $0.01 par value common stock on November 4, 2008  Transitional Small Business
Disclosure Format (Check One): Yes [  ]    No [X]


Part I - FINANCIAL INFORMATION  Item 1.
Financial Statements Reflect
Scientific, Inc. FINANCIAL
STATEMENTS (UNAUDITED) September 30,
2008  The financial statements included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission.  Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted.  However, in
the opinion of management, all adjustments (which include only normal recurring
accruals) necessary to present fairly the financial position and results of
operations for the periods presented have been made.  These financial
statements should be read in conjunction with the accompanying notes, and with
the historical financial information of the Company.   REFLECT SCIENTIFIC, INC.  CONSOLIDATED CONDENSED FINANCIAL STATEMENTS  September 30, 2008    REFLECT SCIENTIFIC, INC. Condensed Consolidated Balance Sheets   ASSETS   September 30,
2008

December 31,
2007(Unaudited)

(Audited)CURRENT
ASSETSCash
$
600,834
$
1,154,162Accounts
receivable

1,199,623

1,371,770Other
receivables

36,170

28,517Inventory

1,646,284

727,970Prepaid
assets

129,998

168,396Total
Current Assets

3,612,909

3,450,815FIXED
ASSETS, NET

274,722

259,884OTHER
ASSETSIntangible
assets, net

5,574,512

5,849,036Deferred
tax asset

38,000

38,000Unbilled
receivables

397,718

-Long
term prepaid asset

108,889

190,555Deposits

29,944

29,945Total
Other Assets

6,149,063

6,107,536TOTAL
ASSETS
$
10,036,694
$
9,818,235          The accompanying notes are an integral part of these condensed
consolidated financial statements. 2     REFLECT SCIENTIFIC, INC. Condensed Consolidated Balance Sheets (Continued)  LIABILITIES AND SHAREHOLDERS EQUITY  September 30,
2008

December 31,
2007(Unaudited)

(Audited)CURRENT
LIABILITIESAccounts
payable
$
589,753
$
432,392Short
term loan

129,889

147,530Royalty
payable

73,550

53,565Capital
leases  short-term portion

18,837

20,016Interest
payable

70,110

-Debentures,
net of Discount Warrant of $631,108
And
Discount of Beneficial Conversion Feature
of $331,517

1,374,375

-Accrued
expenses

65,497

179,778Contract
billings in excess

53,270

82,708Income
taxes payable

400

400Total
Current Liabilities

2,375,681

916,389LONG-TERM
LIABILITIESDebentures,
net of Discount Warrant And Discount of
     Beneficial Conversion
Feature

-

618,750Capital
leases  long-term portion

23,670

40,147Notes
payableTotal
Long-Term Liabilities

23,670

658,897Total
Liabilities

2,399,351

1,575,286SHAREHOLDERS
EQUITYPreferred
stock, $0.01 par value, authorized
5,000,000
shares; No shares issued and Outstanding

-

-Common
stock, $0.01 par value, authorized
50,000,000
shares; 34,423,802 and 34,100,538
shares issued
and outstanding respectively

344,238

341,006Additional
paid in capital

16,757,688

16,512,094Accumulated
deficit

(9,464,583)

(8,610,151)Total
Shareholders Equity

7,637,343

8,242,949TOTAL
LIABILITIES AND SHAREHOLDERS EQUITY
$
10,036,694

9,818,235   The accompanying notes are an integral part of these condensed
consolidated financial statements. 3   REFLECT SCIENTIFIC, INC. Condensed Consolidated Statements of Operations (Unaudited)   For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,2008

2007

2008

2007REVENUES
$
2,548,942
$
1,383,614

7,790,028

5,939,251COST
OF GOODS SOLD

916,374

940,710

3,539,809

3,341,277GROSS
PROFIT

1,632,568

442,904

4,250,219

2,597,974OPERATING
EXPENSESSalaries
and wages

589,956

571,880

1,741,597

1,444,770Rent
expense

75,425

79,211

205,769

175,806General
and administrative expense

762,567

513,928

2,027,315

2,629,428Total
Operating Expenses

1,427,948

1,165,019

3,974,681

4,250,004OPERATING
INCOME (LOSS)

204,620

(722,115)

275,538

(1,652,030)OTHER
INCOME (EXPENSE)Interest
income

2,073

8,904

10,419

8,904Interest
expense

(376,236)

(389,566)

(1,140,389)

(874,411)Total
Other Expenses

(374,163)

(380,662)

(1,129,970)

(865,507)NET
LOSS BEFORE INCOME TAXES

(169,543)

(1,102,777)

(854,432)

(2,517,537)Income
tax benefit (expense)

-

-

-

-NET
LOSS
$
(169,543)
$
(1,102,777)
$
(854,432)
$
(2,517,537)BASIC
AND FULLY DILUTED LOSS PER SHARE
$
(0.00)
$
(0.03)
$
(0.02)
$
(0.08)WEIGHTED
AVERAGE NUMBER OF SHARES OUTSTANDING

34,423,739

34,963,927

34,313,027

31,780,093 The accompanying notes are
an integral part of these condensed consolidated financial statements. 4     REFLECT SCIENTIFIC, INC. Condensed Consolidated Statements of Cash Flows (Unaudited) For the
Nine Months Ended September
30, 2008

2007Net loss
$
(854,432)
$
(2,517,537)Adjustments to
reconcile net loss to net cashprovided by
operating activities:Depreciation

44,029

36,108Amortization
of Debenture Discount & Intangibles

1,168,149

528,927Fair
value of warrants issued

29,943

-Common
stock issued for services

-

484,574Common
stock issued for interest

3,722

-Common
stock issued for prepaid services

-

-Changes in operating
assets and liabilities:(Increase)
decrease in accounts receivable

172,146

(765,794)Increase
in inventory

(918,314)

(226,500)Increase
in unbilled receivables  contract billings

(397,718)

(24,380)Increase
in other receivables

(7,653)

-Increase
in income tax receivable

-

-(Increase)
decrease in prepaid asset

120,065

260,756Decrease
in other assets

-

(29,944)Decrease in billings
in excess  contract billings

(29,436)

-Increase
in accounts payable  and accrued expenses

204,272

370,044Net
Cash Used by Operating Activities

(465,227)

(1,883,746)CASH FLOWS FROM
INVESTING ACTIVITIES



-Cash paid
for fixed assets

(58,867)

(11,585)Net
Cash Used by Investing Activities

(58,867)

(11,585)CASH FLOWS FROM
FINANCING ACTIVITIESPayments
on notes payable

(11,593)

12,437Lines of
Credit

(17,641)

-Proceeds
from issuance of debenture

-

2,500,000Proceeds
from common stock issuance

-

447,605Net
Cash from Financing Activities

(29,234)

2,960,042NET INCREASE
(DECREASE) IN CASH

(553,328)

1,064,712CASH AT BEGINNING OF
PERIOD

1,154,162

271,038CASH AT END OF
PERIOD
$
600,834
$
1,335,750   The
accompanying notes are an integral part of these condensed consolidated
financial statements. 5    REFLECT SCIENTIFIC, INC. Condensed Consolidated Statements of Cash Flows (continued) (Unaudited)    SUPPLEMENTAL CASH
FLOW INFORMATION:Cash
Paid For:Interest
$
748,370
$
8,859Income
taxes
$
-
$
-NON-CASH FINANCING
ACTIVITIES:Stock
issued pursuant to Company mergers
$
-
$
2,435,870Common
stock subscription receivable issued
$
-
$
484,574Common
stock issued for services
$
-
$
490,000Shareholder debt
forgiveness
$
3,500
$
-Common stock issued
for accrued interest
$
73,661
$
-                              The accompanying notes are an integral part of these condensed
consolidated financial statements.  6   REFLECT SCIENTIFIC, INC. Notes to the Condensed Consolidated Financial Statements September 30, 2008   NOTE
1-BASIS OF FINANCIAL STATEMENT PRESENTATION  The accompanying unaudited
condensed consolidated financial statements have been prepared by the Company
pursuant to accounting principles generally accepted in the United States of
America. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or omitted in
accordance with rules and regulations of the Securities and Exchange Commission.
 The information furnished in the interim condensed consolidated financial
statements include normal recurring adjustments and reflects all adjustments,
which, in the opinion of management, are necessary for a fair presentation of
such financial statements.  Although management believes the disclosures
and information presented are adequate to make the information not misleading,
it is suggested that these interim condensed consolidated financial statements
be read in conjunction with the Companys most recent audited consolidated
financial statements and notes thereto included in its December 31, 2007
financial statements.  Operating results for the three and nine months
ended September 30, 2008 are not necessarily indicative of the results that may
be expected for the year ending December 31, 2008.  NOTE
2 - ORGANIZATION AND DESCRIPTION OF BUSINESS  Cole, Inc. (the Company)
was incorporated under the laws of the State of Utah on November 3, 1999. The
Company was organized to engage in any lawful activity for which corporations
may be organized under the Utah Revised Business Corporation Act.  On
December 30, 2003 the Company changed its name to Reflect Scientific, Inc.  Reflect Scientific, Inc. a
California corporation, was incorporated on September 14, 1993, under the laws
of California to engage in the manufacture of test kits for use in scientific
studies.  On
December 30, 2003, pursuant to an Agreement and Plan of Reorganization, the
Company completed a reverse merger with the shareholders of Reflect Scientific,
Inc. in which it acquired 100% of Reflect Scientific, Inc., a California
corporation in exchange for 22,914,949 common shares of the Company.  The
terms of the acquisition are detailed in an 8-K filing dated December 31, 2003.
 Under the terms of the agreement, the President of Reflect Scientific,
Inc. became the President of the Company and was elected to the Board of
Directors.  The acquisition was accounted for as a recapitalization of
Reflect Scientific, Inc. because the members of Reflect Scientific, Inc.
controlled the Company after the acquisition.  Reflect Scientific, Inc. was
treated as the acquiring entity for accounting purposes and Cole, Inc. was the
surviving entity for legal purposes.  There was no adjustment to the
carrying values of the assets or liabilities of Reflect Scientific, Inc. and no
goodwill was recorded. The operations for the year ended December 31, 2007 and
2006 are those of Reflect Scientific, Inc.  Effective January 19, 2007 the Company finalized an
Agreement and Plan of Merger agreement with All Temp Engineering, Inc. Effective
March 6, 2007, the Company finalized an Agreement and Plan of Merger agreement
with Image Labs, International.  The terms of the agreements are detailed
in a 10-QSB filing dated September 30, 2007.  The Company entered into
these mergers after considering All Temps and Image Labs business history,
financial condition, and intellectual property. The Company has a desire to
expand its services, attract and retain talented technical personnel, and the
Company believed there were strategic and financial advantages to combining the
businesses.   7    REFLECT SCIENTIFIC, INC. Notes to the Condensed Consolidated Financial Statements September 30, 2008  NOTE 3  CONVERTIBLE
DEBENTURES AND WARRANTS  On
June 29, 2007, the Company entered into an agreement to sell $2,500,000 in 12%
senior convertible debentures with a maturity date of June 29, 2009, with
interest due quarterly.   At the closing, the Company prepaid the
first quarterly interest payment out of the proceeds of the offering from escrow
and placed in escrow the second quarterly interest payment for a total of
$150,000.  The agreement allows for the Company to pay the interest in cash
or in duly authorized, validly issued, fully paid and non-assessable shares of
common stock at the interest conversion rate, or a combination thereof.  The
debentures have a conversion price of $0.65.  If the Company, at any time
while the debenture is outstanding, pays stock dividends, subdivides outstanding
shares, sells or grants any option to purchase or dispose of common stock at an
effective price lower than the conversion price, issue rights, options or
warrants at a price lower than the conversion price, etc., the Company shall
promptly deliver to each Holder a notice setting forth the conversion price
after such adjustment and provide a brief statement of facts requiring such
adjustment.   In addition, if the volume weighted average price for
each of any 20 consecutive trading days exceeds 250% of the conversion price,
the Company may, within one trading day deliver a written notice to the holder
and force the holder to convert a principal amount of the debenture equal to all
or part of the holders portion of the forced conversion amount.  The
agreement also provides for the issuance of 1,923,077 A warrants and 1,923,077 B
warrants. The warrants are exercisable at a price of $0.80 per share for the A
warrant and $1.00 per share for the B warrant and expire September 29, 2012.
 The Company valued the warrants using the Black-Scholes option pricing
model.  For the purpose of the valuation of the warrants, the Company
calculated a volatility of 66.48% on its common stock and used the U. S.
Treasury bill rate of 4.94% for its risk free rate.  Then the Company
allocated a portion of the proceeds to the warrants, based on the relative fair
value basis, in the amount of $1,639,029 which is recognized as a contra
liability account and will be amortized as interest expense over the 2 year term
of the agreement.  The intrinsic value of beneficial conversion of the
debentures was valued at $5,677,491, which exceeds the effective value of the
debentures of $860,971.  Therefore, the discount assigned to the beneficial
conversion feature is limited to $860,971 and is recognized as a contra
liability account and will be amortized as interest expense over the 2 year term
of the agreement.  As
payment for services provided, the Company also issued 192,308 A warrants and
192,308 B warrants which were valued at $475,925 using the Black-Scholes option
pricing model and expensed in the current period. 8   REFLECT SCIENTIFIC, INC. Notes to the Condensed Consolidated Financial Statements September 30, 2008   NOTE 3  CONVERTIBLE
DEBENTURES AND WARRANTS (continued)  The
debentures and warrants have anti-dilution protections, and the Company has
agreed to certain registration rights for the resale of the shares of common
stock underlying the debentures and warrants.  A
summary of the status of the Companys outstanding stock warrants as of
September 30, 2008 and changes during the period then ended is presented
below:  2008Shares

Weighted
Average Exercise PriceOutstanding,
beginning of year
4,230,770

$
.90Granted
-


-Expired/Cancelled
-


-Exercised
-


-Outstanding September
30, 2008
4,230,770

$
.90Exercisable
4,230,770

$
.90  Outstanding

ExercisableRange
of Exercise Prices

Number outstanding at September 30, 2008

Weighted Average Remaining Contractual Life

Number Exercisable at September 30, 2008$
0.80

2,115,385

4.00

2,115,3851.00

2,115,385

4.00

2,115,3854,230,770



4,230,770  NOTE 4  EQUITY
TRANSACTIONS  During
the nine month period ended September 30, 2008, the Company issued 212,307
shares of its common stock for the conversion of $138,000 debt pursuant to the
convertible debenture agreement dated September 29, 2007.  During
the nine month period ended September 30, 2008, the Company issued 110,957
shares of its common stock for interest payable.   9   NOTE
5  COMMON STOCK OPTIONS  On
December 31, 2007, the Companys board of directors approved an equity plan.
 The equity plan known as the 2007 Equity Incentive Plan (the Plan)
reserves up to 6,000,000 shares of the Companys authorized common stock for
issuance to officers, directors, employees and consultants under the terms of
the Plan.  The Plan permits the board of directors to issue stock options
and restricted stock.  In
conjunction with its employee stock option plan, the company issued 66,660
options to employees. These options had a fair value of $29,930 and were
expensed when issued.  The options were issued in September 2008.  The
fair value of each option granted under the Plan is estimated on the date of
grant, using the Black-Scholes option pricing model, based on the following
weighted average assumptions: September
30, 2008Expected
life (years)

5.0Expected
stock price volatility

65.74
- 66.27
%Expected
dividend yield

0.0
%Risk-free
interest rate

3.38
 3.41
%  The
risk-free interest rate is based upon the U.S. Treasury yield curve at the time
of grant for the respective expected life of the option. The expected life
(estimated period of time outstanding) of options was estimated.  The
expected volatility of the Companys options was calculated using historical
data. Expected dividend yield was not considered in the option pricing formula
since the Company does not pay dividends and has no current plans to do so in
the future. If actual periods of time outstanding and rate of forfeitures
differs from the expected rates, the Company may be required to make additional
adjustments to compensation expense in future periods.  A
summary of the status of the Companys outstanding stock options as of September
30, 2008 and changes during the period then ended is presented below:  2008Shares

Weighted
Average Exercise PriceOutstanding,
beginning of year
5,000,000

$
1.32Granted
66,660


.94Expired/Cancelled
-


-Exercised
-


-Outstanding
at September 30, 2008
5,066,660

$
1.31Exercisable
5,066,660

$
1.31 10    Outstanding

ExercisableRange of Exercise Prices

Number
outstanding at September 30, 2008

Weighted
Average Remaining Contractual Life

Number
Exercisable at September 30, 2008$
1.32

4,800,000

4.50

4,800,0001.20

200,000

4.50

200,0000.85

52,660

5.00

52,6601.30

14,000

5.00

14,0005,066,660



5,066,660  The
total fair value of options vested was $3,383,487 as of September 30,
2008.  As of September 30, 2008, there was no unrecognized compensation
cost related to non-vested stock options granted under the Plan  NOTE 6  RECENT ACCOUNTING
PRONOUNCEMENTS  In
December 2007, the FASB issued SFAS No. 141(R), Business Combinations. 
SFAS No. 141(R) changes the accounting for and reporting of business combination
transactions in the following way:  Recognition with certain exceptions, of
100% of the fair values of assets acquired, liabilities assumed, and non
controlling interests of acquired businesses; measurement of all acquirer shares
issued in consideration for a business combination at fair value on the
acquisition date; recognition of contingent consideration arrangements at their
acquisition date fair values, with subsequent changes in fair value generally
reflected in earnings; recognition of pre-acquisition gain and loss
contingencies at their acquisition date fair value; capitalization of in-process
research and development (IPR&D) assets acquired at acquisition date fair
value; recognition of acquisition-related transaction costs as expense when
incurred; recognition of acquisition-related restructuring cost accruals in
acquisition accounting only if the criteria in Statement No. 146 are met as of
the acquisition date; and recognition of changes in the acquirers income tax
valuation allowance resulting from the business combination separately from the
business combination as adjustments to income tax expense.  SFAS No.
141(R) is effective for the first annual reporting period beginning on or after
December 15, 2008 with earlier adoption prohibited.  The adoption of
SFAS No. 141(R) will affect valuation of business acquisitions made in 2009 and
forward.  In
December 2007, the FASB issued SFAS No. 160 "Noncontrolling Interest in
Consolidated Financial Statements  an Amendment of ARB 51" (SFAS
160).  SFAS 160 clarifies that a noncontrolling interest in a
subsidiary is an ownership interest in the consolidated entity that should be
reported as equity in the consolidated financial statements.  It also
requires consolidated net income to be reported at amounts that include the
amounts attributable to both the parent and the noncontrolling interest, and
requires disclosure, on the face of the consolidated statement of income, of the
amounts of consolidated net income attributable to the parent and to the
noncontrolling interest.  SAFS 160 is effective for fiscal years, and
interim periods within those fiscal years, beginning on or after December 15,
2008.  Earlier adoption is prohibited.  We do not anticipate
a material impact upon adoption. 11   In
March 2008, the FSAB issued FASS No. 161, Disclosures about Derivative
Instruments and Hedging Activities.  SFAS 161 is intended to improve
financial reporting about derivative instruments and hedging activities by
requiring enhanced disclosures to enable investors to better understand their
effects on an entity's financial position, financial performance, and cash
flows.  SFAS 161 is effective for financial statements issued for
fiscal years and interim periods beginning after November 15, 2008, with early
application encouraged.  We do not anticipate a material impact upon
adoption.  In
May 2008,the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted
Accounting Principles." This statement identifies the sources of accounting
principles and the framework for selecting the principles to be used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles ("GAAP")
in the United States (the "GAAP hierarchy"). This statement is effective 60 days
following the SEC's approval of the Public Company Accounting Oversight Board
amendments to AU Section 411, "The Meaning of Present Fairly in Conformity With
Generally Accepted Accounting Principles". The Company does not expect this
statement to have any effect on our financial position or results of
operations.  In
May 2008, FASB issued SFAS 163, Accounting for Financial Guarantee Insurance
Contracts - an interpretation of FASB Statement No. 60. SFAS 163 clarifies how
Statement 60 applies to financial guarantee insurance contracts, including the
recognition and measurement of premium revenue and claim liabilities. This
Statement also requires expanded disclosures about financial guarantee insurance
contracts.  SFAS 163 is effective for fiscal years beginning on or after
December 15, 2008, and interim periods within those fiscal years. The Company
does not expect that the adoption of SFAS 163 will have a material impact on its
consolidated financial statements.                       12    Item
2. Managements Discussion and Analysis of Financial Condition and Results of
Operations  Special Note Regarding
Forward-Looking Statements  This periodic
report contains certain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 with respect to the Plan of
Operations provided below, including information regarding the Companys
financial condition, results of operations, business strategies, operating
efficiencies or synergies, competitive positions, growth opportunities, and the
plans and objectives of management. The statements made as part of the Plan of
Operations that are not historical facts are hereby identified as
"forward-looking statements." Critical
Accounting Policies and Estimates  The
preparation of financial statements and related disclosures in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the amounts
reported in the unaudited Financial Statements and accompanying notes. 
Management bases its estimates on historical experience and on various other
assumptions that are believed to be reasonable under the circumstances.
Actual results could differ from these estimates under different
assumptions or conditions.  The Company believes there have
been no significant changes during the nine month periods ended September 30,
2008 and 2007, to the items disclosed as significant accounting policies in
management's Notes to the Financial Statements in the Company's Annual Report on
Form 10-KSB for the year ended December 31, 2007.  Plan of Operation and
Business Growth  Over the next
twelve months our focus will be on the commercialization of products acquired
and developed over the last several years.  Included in this focus will be
the continued development and commercialization of our ultra low temperature
refrigerator line.  Additionally, we will continue to develop and expand
our focus on solutions and services to retrofit server and computer rooms to
help reduce the cost of cooling such rooms as well as provide a more reliable
way to cool such rooms.   We also will continue to focus on the
expansion of our detector line and contract manufacturing operations.  Management
focus over the last several years was on the acquisition and development of our
product lines. Management now feels they have the core product lines in place to
now refocus its efforts on the commercialization of the product lines.  As
such much of the focus over the next twelve months will be on marketing our
products and expanding our customer base.  Results of
Operations  September 30, 2008 and 2007  Our revenues
increased from the quarter ended September 30, 2007, of $1,383,614 to $2,548,942
for the quarter ended September 30, 2008.  as our products gain more
commercial acceptance.  Our cost of
goods sold decreased in the quarter ending September 30, 2008, as compared to
September 30, 2007 to $916,374 from $940,710 .   Overall, as a
percentage of sales, our cost of goods sold was approximately 36% for the three
months ended September 30, 2008 compared to 68% for the quarter ended September
30, 2007.  This gives us gross profit percentages of 64% and 32%,
respectively.  We anticipate the cost of goods sold percentage and gross
profit percentage to vary by quarter depending on which products make up the
largest percentage of sales during the quarter.  We anticipate these
percentages to become more stable as our sales for all products continue to
increase.    Although sales increased for the nine month period, the increase
was not sufficient to offset additional expenses as we again expanded our
operations during the quarter ended September 30, 2008.  Salaries and wages
increased to $589,956 during the quarter ended September 30, 2008, compared to
$571,880 for the quarter ended September 30, 2007.  This increase reflects
the closing of all of our acquisitions and the hiring of additional personnel.
 We felt it was necessary to retain additional personnel in an effort to
effectively market our products and take advantage of business opportunities.
 Rent expense also increased as we began covering the expenses of
businesses acquired in the first quarter of 2007.  With the
increase in operating expenses from $1,165,019 for the quarter ended September
30, 2007 to $1,427,948 for the quarter ended September 30, 2008, our net loss
decreased to $169,543 from $1,102,777 for the comparable period in 2007.
 We expect that as sales continue to increase, we will be able to continue
to reduce our net loss this year.  Interest
expense was $376,236 for the quarter ended September 30, 2008.  This
interest expense primarily related to interest on our debentures of $73,833 for
the quarter and $302,403 related to the amortization of the discounts on the
debenture.  Seasonality and Cyclicality  We do not
believe our business is cyclical.  Liquidity
and Capital Resources  Our cash
resources at September 30, 2008, were $600,834, with accounts receivable of
$1,199,623 and inventory of $1,646,284. We have relied on revenues and sales of
equity and debt securities for cash resources.   Our working capital
on September 30, 2008, was $1,237,228 compared to $2,534,426 on December 31,
2007.  This decrease is due to our convertible debenture now becoming due
in less than twelve months and being classified as a current asset.  In
June 2009, the debenture will be due and the total amount owed will be
$2,337,000, less any future conversions.  If the debentures are not
converted, we would probably have to seek some additional debt or equity
financing to help repay the debenture.  The amount of debt or equity
financing required will be dependent on how our operations perform over the next
nine months.  If sales continue to increase, we may be able to repay part
of the debentures with operating profits.We anticipate devoting some of the
available cash to marketing programs that will increase sales over the next
twelve months.  Historically,
we have financed our working capital requirements through capital funding which
have generated sufficient funds to offset shortfalls and cover losses.  As
we continue to expand our operations, we anticipate seeking additional capital
through the sale of equity securities.  It is highly likely, we will again
seek additional capital in the equity markets. At this time we do not know the
extent of the overall financing will need in the future.  Financing will
depend on how well our products are received in the marketplace.  Our long term
liabilities were $ 23,670 on September 30, 2008 down from $658,897 on December
31, 2007.  This decrease is due to the change to the current liability
classification for the debenture..  For the
quarter ended September 30, 2008, our net cash used by operating activities was
$465,227 which was down from $1,883,746 for the quarter ended September 30,
2007.  We were pleased with this reduction as it reflects our business
operations are starting to cover our cash needs.  We anticipate
losses to continue as we expand our sales efforts.  Since the products are
new to the marketplace, we cannot predict with certainty how sales will be in
upcoming quarters but we expect they will continue to increase and should start
covering our expenses.  Off-Balance Sheet
Arrangements  We have no off balance
sheet arrangements as of September 30, 2008.    Forward-looking
Statements  The Private
Securities Litigation Reform Act of 1995 (the Act) provides a safe harbor for
forward-looking statements made by or on behalf of our Company. Our Company and
our representatives may from time to time make written or oral statements that
are forward-looking, including statements contained in this Annual Report and
other filings with the Securities and Exchange Commission and in reports to our
Companys stockholders. Management believes that all statements that express
expectations and projections with respect to future matters, as well as from
developments beyond our Companys control including changes in global economic
conditions are forward-looking statements within the meaning of the Act. These
statements are made on the basis of managements views and assumptions, as of
the time the statements are made, regarding future events and business
performance. There can be no assurance, however, that managements expectations
will necessarily come to pass. Factors that may affect forward- looking
statements include a wide range of factors that could materially affect future
developments and performance, including the following:  Changes in
Company-wide strategies, which may result in changes in the types or mix of
businesses in which our Company is involved or chooses to invest; changes in
U.S., global or regional economic conditions, changes in U.S. and global
financial and equity markets, including significant interest rate fluctuations,
which may impede our Companys access to, or increase the cost of, external
financing for our operations and investments; increased competitive pressures,
both domestically and internationally, legal and regulatory developments, such
as regulatory actions affecting environmental activities, the imposition by
foreign countries of trade restrictions and changes in international tax laws or
currency controls; adverse weather conditions or natural disasters, such as
hurricanes and earthquakes, labor disputes, which may lead to increased costs or
disruption of operations.  This list of
factors that may affect future performance and the accuracy of forward-looking
statements are illustrative, but by no means exhaustive. Accordingly, all
forward-looking statements should be evaluated with the understanding of their
inherent uncertainty.  Item 3.
 Quantitative and Qualitative Disclosures About Market Risk.  This item is
not required for Small Reporting Companies.  Item 4T.  Controls
and Procedures.  Evaluation of Disclosure Controls and
Procedures  Our management, with the participation of our
President and CFO, evaluated the effectiveness of our disclosure controls and
procedures as of the end of the period covered by this report. Based on that
evaluation, our President and CFO concluded that our disclosure controls and
procedures as of the end of the period covered by this report were effective
such that the information required to be disclosed by us in reports filed under
the Exchange Act is (i) recorded, processed, summarized and reported within
the time periods specified in the SECs rules and forms and
(ii) accumulated and communicated to our management, including our
President and CFO, as appropriate to allow timely decisions regarding
disclosure. A controls system cannot provide absolute assurance, however, that
the objectives of the controls system are met, and no evaluation of controls can
provide absolute assurance that all control issues and instances of fraud, if
any, within a company have been detected.   Managements Report on Internal Control
over Financial Reporting  Our management is responsible for establishing
and maintaining adequate internal control over financial reporting (as defined
in Rule 13a-15(f) under the Exchange Act). Our internal control over financial
reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes of accounting principles generally accepted in the United
States.   Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements.
Therefore, even those systems determined to be effective can provide only
reasonable assurance of achieving their control objectives.  Our management, with the participation of the
President and CFO, evaluated the effectiveness of our internal control over
financial reporting as of September 30, 2008.  Based on this evaluation,
our management, with the participation of the President and CFO, concluded that,
as of September 30, 2008, our internal control over financial reporting was
effective.  Changes in
internal control over financial reporting  There have been no changes
in internal control over financial reporting.     PART II -
OTHER INFORMATION  ITEM 1.  Legal
Proceedings   None  ITEM 2.
 Unregistered Sales of Equity Securities and Use of Proceeds  Recent
Sales of Unregistered Securities  We have not sold any
restricted securities during the nine months ended September 30, 2008.  Use of Proceeds of
Registered Securities  None; not applicable.  Purchases of Equity
Securities by Us and Affiliated Purchasers  During the nine months
ended September 30, 2008, we have not purchased any equity securities nor have
any officers or directors of the Company.  ITEM 3.  Defaults
Upon Senior Securities  We are not aware of any
defaults upon senior securities.  ITEM 4.  Submission
of Matters to a Vote of Security Holders  No matters were submitted
to a vote of security holders during the quarter ended September 30, 2008.  ITEM 5.  Other
Information.  None    ITEM
6.  Exhibits  (a) Exhibits. Exhibit No.
Title of
Document
Location if other
than attached hereto3.1
Articles of
Incorporation
10-SB Registration
Statement*3.2
Articles of Amendment
to Articles of Incorporation
10-SB Registration
Statement*3.3
By-Laws
10-SB Registration
Statement*3.4
Articles of Amendment
to Articles of Incorporation
8-K Current Report
dated December 31, 2003*3.5
Articles of Amendment
to Articles of Incorporation
8-K Current Report
dated December 31, 2003*3.6
Articles of
Amendment
September 30, 2004
10-QSB Quarterly Report*3.7
By-Laws
Amendment
September 30, 2004
10-QSB Quarterly Report*4.1
Debenture
8-K Current Report
dated September 29, 2007*4.2
Form of Purchasers
Warrant
8-K Current Report
dated September 29, 2007*4.3
Registration Rights
Agreement
8-K Current Report
dated September 29, 2007*4.4
Form of Placement
Agreement
8-K Current Report
dated September 29, 2007*10.1
Securities Purchase
Agreement
8-K Current Report
dated September 29, 2007*10.2
Placement Agent
Agreement
8-K Current Report
dated September 29, 2007*14
Code of Ethics
December 31, 2003
10-KSB Annual Report*21
Subsidiaries of the
Company
December 31, 2004
10-KSB Annual Report*31.1
302 Certification of
Kim Boyce31.2
302 Certification of
David Strate32
906
Certification Exhibits  Additional Exhibits
Incorporated by Reference *
Reflect California
Reorganization
8-K Current Report
dated December 31, 2003*
JMST
Acquisition
8-K Current Report
dated April 4, 2006*
Cryomastor
Reorganization
8-K Current Report
dated September 27, 2006*
Image Labs Merger
Agreement Signing
8-K Current Report
dated November 15, 2006*
All Temp Merger
Agreement Signing
8-K Current Report
dated November 17, 2006*
All Temp Merger
Agreement Closing
8-KA Current Report
dated November 17, 2006*
Image Labs Merger
Agreement Closing
8-KA Current Report
dated November 15, 2006  *
Previously filed and incorporated by reference.    SIGNATURES  Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.  Reflect
Scientific, Inc. (Registrant)  Date: November
17, 2008 By:
 /s/ Kim Boyce Kim
Boyce, CEO, President and Director  Date: November
17, 2008 By:
 /s/ Tom Tait Tom
Tait, Vice President and Director  Date: November
17, 2008 By:
 /s/ David Strate David
Strate, CFO