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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549
                                   FORM 10-KSB/A


[X]  ANNUAL REPORT UNDER OR OF THE SECURITIES EXCHANGE ACT OF 1934
     For the fiscal year ended December 31, 2005

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

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934
     For the transition period from __________________ to _____________

                        Commission file number 000-25003
                                               ---------

                                Real Logic, Inc.
                      -------------------------------------
                 (Name of small business issuer in its charter)

            Florida                                     64-1045849
---------------------------------            ---------------------------------
   (State or other jurisdiction              (IRS Employer Identification No.)
of incorporation or organization)

340 Royal Poinciana Way , Suite 326 B                       33480
-------------------------------------------                 -----
 (Address of principal executive offices)                (Zip Code)

Issuer's telephone number, including area code: (561) 655-3200

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

  Title of each class        Name of each exchange on which registered

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

               Common Stock, par value $.001 per share
                ---------------------------------------
                        (Title of class)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.

                         YES [ ] NO [X]

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

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

Our revenues for the most recent fiscal year were $0.

The aggregate market value of our common stock held by non-affiliates was
$757,795 as of June 30, 2006, based on the most recent price at which the common
stock was sold in an arms length transaction.

The number of outstanding shares of our common stock on June 30, 2006 was
23,077,080.

Transitional Small Business Disclosure Format: Yes  [ ]  No [X]
================================================================================

<PAGE>


                           FORWARD-LOOKING STATEMENTS

The matters discussed in this Form 10-KSB may contain "forward looking
statements" (as defined in the Private Securities Litigation Reform Act of
1995). These statements can be identified by the use of forward-looking
terminology such as "believes," "expects," "may," "will," "intends," "should,"
or "anticipates" or the negative thereof or other variations thereon or
comparable terminology, or by discussions of strategy that involve risks and
uncertainties. The safe harbor provisions of Section 21E of the Securities
Exchange Act or 1934, as amended, and Section 27A of the Securities Act of 1933,
as amended, apply to forward-looking statements made in this report. You should
not place undue reliance on forward-looking statements. Forward-looking
statements involve risks and uncertainties. The actual results that we achieve
may differ materially from any forward-looking statements due to such risks and
uncertainties. These forward-looking statements are based on current
expectations, and we assume no obligation to update this information. Readers
are urged to carefully review and consider the various disclosures made by us in
our reports filed with the Securities and Exchange Commission that attempt to
advise interested parties of the risks and factors that may affect our business.


<PAGE>

                                     PART I

Item 1. Business

Real Logic, Inc. was incorporated in the state of Florida on June 28, 1999.
Since inception until recently, our primary activity has been to locate and
acquire an operating company. In order to increase our attractiveness to
potential acquisition targets, on December 4, 2000, we voluntarily filed a Form
10-SB with the Securities and Exchange Commission, thereby becoming a publicly
reporting company. On October 29, 2001, we changed our name from Xelos, Inc. to
Real Logic, Inc. In September 2005, we entered into a Merger Agreement with
Timber Property, Inc., a shell company with over 1,000 shareholders. Our
principal, Bradford L. Tolley, had acquired approximately 86% of Timber Property
in 2002. Upon effectiveness of the merger with Timber Property, we were a
publicly reporting company with over 1,000 shareholders, and we were ready to
acquire one or more businesses or products and then commence public trading of
our stock.

In the fourth quarter of 2005, our management decided that the company would
focus on the Alternative Transportation Industry. We have therefore focused our
recent efforts on locating and acquiring alternative personal transportation
vehicles that we feel are worthy of design and development support, or are ready
to be brought to market. These vehicles include off-road vehicles for areas of
the world in which paved roads are scarce, and vehicles powered by alternative
energy sources, such as electric and solar power.


After extensive searching, due diligence, discussions and negotiations, in June
2006 we reached an agreement with two individuals to collaborate in the
development, manufacture and marketing of a new design for an alternative
transportation vehicle. One of the individuals, Richard Duncan, has in
development a prototype gasoline-powered vehicle for on or off-road use. The
vehicle is designed to be a lightweight vehicle with minimal fuel consumption,
while carrying multiple persons and achieving speeds of up to 70 miles per hour.
On July 20, 2006, we implemented the agreement by forming a new subsidiary,
Duncan Motor Company, which is 60% owned by us, and which will be managed by Mr.
Duncan, who owns 35% of Duncan Motor Company. We have committed to use our best
efforts to raise the additional capital required to fund the remaining design
and testing of the vehicle, and any offshoots of that product, and then to bring
the vehicle to market, with a particular emphasis on third world markets. We
also agreed to issue to Mr. Duncan a promissory note for $130,000, reimbursing
him for his development expenses to date, and to issue 100,000 shares of our
common stock to Mr. Duncan, and 25,000 shares of our common stock to Robert
Wright, the other party to the agreement. The transaction was accounted for
using the purchase method of accounting. See Note 10 to the financial statements
included in this report.


In order to provide manufacturing capability for the Duncan Motor Company
vehicles, we are currently negotiating to acquire a certain fabrication and
manufacturing company which has experience in building vehicles of a similar
type. We hope to have an agreement for this acquisition in the near future.

We are also in negotiation to acquire the rights to market and sell various
alternative fuel vehicles, with a view primarily to marketing those vehicles in
the third world as part of a line of vehicles fulfilling a range of
transportation needs.

Item 2. Property

We own no real estate. Our offices are located at 340 Royal Poinciana Way, Suite
326 B, Palm Beach, FL., 33480. We pay rent of approximately $2,200 per month for
our offices. We believe this space will be adequate for our needs for the
foreseeable future.

Item 3. Legal Proceedings

We are not a party to any legal proceedings.

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

During the period covered by this report, there were no matters submitted to our
shareholders for a vote.

                                        1
<PAGE>

                                    PART II


Item 5. Market for Common Equity and Related Stockholder Matters.

Market for Common Stock

There is currently no trading market for our stock and there can be no assurance
that any trading market will ever develop or, if such a market does develop,
that it will continue.

Holders of Record

As of June 30, 2006, we had approximately 1,100 shareholders of our common
stock, which is the only class of stock which we have outstanding.

Dividend Policy

We have never paid cash dividends on our Common Stock. Payment of dividends will
be within the sole discretion of our Board of Directors and will depend, among
other factors, upon earnings, capital requirements and the operating and
financial condition of the Company.

Item 6. Management's Discussion and Analysis or Plan of Operations.

Plan of Operations

We are a development stage company as defined in the Statement of Financial
Accounting Standards No. 7. We have had no operations since incorporation. We
are seeking to acquire one or more operating businesses through solicitation.
Such solicitation may include newspaper or magazine advertisements, mailings or
other distributions to law firms, accounting firms, investment bankers,
financial advisors and similar persons, and the use of one or more world-wide
websites and similar methods. Our management may engage in such solicitation
directly or may employ one or more entities to conduct or assist in such
solicitation. The Company and/or any entity with which the Company enters into a
business combination may pay referral fees to consultants and others who refer
target businesses for mergers into public companies. Such payments would be made
only if a business combination occurs and may consist of cash or a portion of
the stock in the resulting company. Our management decided during the fourth
quarter of 2005 that the company would focus on building an Alternative
Transportation Industry Division. We have therefore focused our recent efforts
on locating and acquiring alternative personal transportation vehicles that we
feel are worthy of design and development support, or are ready to be brought to
market. These vehicles include off-road vehicles for areas of the world in which
paved roads are scarce, and vehicles powered by alternative energy sources, such
as electric and solar power.


As of December 31, 2005, the Company's accumulated deficit was $359,020 and we
had a working capital deficit of $83,337. Until we can acquire an operating
business, and achieve profitable operation, we will be dependant upon funding
from our principal shareholder, Bradford L.Tolley.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

                                       2

<PAGE>

RECENT ACCOUNTING PRONOUNCEMENTS

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin (SAB) No. 101, "Revenue Recognition in Financial Statements"
summarizing the SEC's views in applying generally accepted accounting principles
to various revenue recognition issues. Management believes that its revenue
recognition practices are in conformity with SAB No. 101.

In April 2000, the FASB issued FASB Interpretation No. 44 ("FIN No. 44"),
"Accounting for Certain Transactions Involving Stock Compensation: An
Interpretation of APB No. 25." We have adopted the provisions of FIN No. 44, and
such adoption did not impact our results of operations.

In September 2000, the FASB issued SFAS No. 140 "Accounting for Transfers and
Servicing of Financial Asset and Extinguishment of Liabilities", a replacement
of SFAS No. 125. Management does not expect the standard to have any effect on
our financial position or results of operations.

In July 2001, the FASB issued SFAS No. 141 "Business Combinations" and SFAS No.
142 "Goodwill and Other Intangible Assets." We have adopted the provisions of
SFAS No. 141 and 142, and such adoption did not impact our results of
operations.

In July 2601, the SEC issued SAB 102 "Selected Loan Loss Allowance Methodology
and Documentation Issues." We do not expect this SAB to have any effect on our
financial position or results of operations.

In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations." Management does not expect the standard to have any effect on our
financial position or results of operations.

In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment of
Long-Lived Assets." We have adopted the provisions of SFAS No. 144 and 142, and
such adoption did not impact our results of operations.

In April 2002, the FASB issued SFAS No. 145, "Rescission of SFAS's 4, 44 and 64,
Amendment of SFAS No. 13 and Technical Corrections." Management does not expect
the standard to have any effect on our financial position or results of
operations.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities." Management does not expect the standard to
have any effect on our financial position or results of operations.

In October 2002, the FASB issued SFAS No. 147, "Acquisition of Certain Financial
Institutions." Management does not expect the standard to have any effect on our
financial position or results of operations.

RISK FACTORS

WE HAVE NO OPERATING HISTORY OR REVENUE AND MINIMAL ASSETS. We have no operating
history, nor any revenues or earnings from operations. We have no significant
assets or financial resources. We will, in all likelihood, sustain operating
expenses without corresponding revenues, at least until the consummation of a
business combination or the execution of a business plan. This may result in the
Company incurring net operating losses which will increase continuously until we
can generate revenues. There is no assurance that we will be able to identify
such a target company and consummate such a business combination.

OUR PROPOSED OPERATIONS ARE SPECULATIVE. The success of our plan of operation
will depend to a great extent on the operations, financial condition and
management of the business plan or proposed target company. While management
prefers a business combination with entities having established operating
histories, there can be no assurance that we will be successful in locating
candidates meeting such criteria. If we complete a business combination, of
which there can be no assurance, the success of our operations will be dependent
upon management of the target company and numerous other factors beyond our
control.

                                       3

<PAGE>

THERE IS A SCARCITY OF, AND COMPETITION FOR, BUSINESS OPPORTUNITIES AND
COMBINATIONS. We are and will continue to be an insignificant participant in the
business of seeking mergers with and acquisitions of business entities. A large
number of established and well-financed entities, including venture capital
firms, are active in mergers and acquisitions of companies which may be merger
or acquisition target candidates for the Company. Nearly all such entities have
greater financial resources, technical expertise and managerial capabilities
than the Company and, consequently, we will be at a competitive disadvantage in
identifying possible business opportunities and successfully completing a
business combination. Moreover, we will compete with numerous other small public
companies in seeking merger or acquisition candidates.

OUR REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE ACQUISITION. Section 13 of the
Securities Exchange Act of 1934 (the "Exchange Act") requires companies subject
thereto to provide certain information about significant acquisitions including
certified statements for the company acquired covering one or two years,
depending on the relative size of the acquisition. The time and additional costs
that may be incurred by some target companies to prepare such financial
statements may significantly delay or essentially preclude consummation of an
otherwise desirable acquisition by the Company. Acquisition prospects that do
not have or are unable to obtain the required audited statements may not be
appropriate for acquisition so long as the reporting requirements of the
Exchange Act are applicable.

OUR OPERATIONS MAY LACK DIVERSIFICATION. Our proposed operations, even if
successful, will in all likelihood result our engaging in a business combination
with only a handful of business entities or execute a business plan in only a
few business industries. Consequently, our activities will be limited to those
engaged in by the business entities that we merge with or acquire. Our inability
to diversify our activities into a number of areas may subject us to economic
fluctuations within a particular business or industry and therefore increase the
risks associated with our operations.

POSSIBLE REGULATION UNDER THE INVESTMENT COMPANY ACT. Although we will be
subject to regulation under the Exchange Act, we believe that we will not be
subject to regulation under the Investment Company Act of 1940, insofar as we
will not be engaged in the business of investing or trading in securities. If we
engage in business combinations which result in our holding passive investment
interests in a number of entities, we could be subject to regulation under the
Investment Company Act of 1940. In such event, we would be required to register
as an investment company and could be expected to incur significant registration
and compliance costs. We have obtained no formal determination from the
Securities and Exchange Commission as to our status under the Investment Company
Act of 1940 and, consequently, any violation of such Act could subject us to
material adverse consequences.

OUR SUCCESS DEPENDS IN LARGE PART UPON THE EFFORTS OF A SMALL NUMBER OF PERSONS
WHO SERVE ON OUR BOARD AND AS MANAGEMENT. We have only a limited number of
persons fulfilling our management responsibilities. The loss of the services of
any of our directors or officers could hurt our abilito to execute our business
plan. We have not obtained key man life insurance on any of our officers or
directors.

CONCENTRATION OF OWNERSHIP MAY REDUCE THE CONTROL BY OTHER SHAREHOLDERS. Our
President, Bradford L. Tolley, owns approximately 66% of our outstanding stock.
As a result, other investors in our common stock will not have a significant
influence on corporate decision-making.

                                       4

<PAGE>

POTENTIAL REGULATION AS A PENNY STOCK. If and when our stock becomes publicly
traded, the trading price of our stock may result in our stock being classified
as a "penny stock." The Securities and Exchange Commission has adopted a number
of rules to regulate penny stocks. A penny stock is any equity security that has
a market price of less than $5.00 per share or with an exercise price of less
than $5.00 per share, subject to certain exceptions. Such rules include Rules
3a51-1, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6 and 15g-7 under the Securities
and Exchange Act of 1934, as amended. The rules may further affect the ability
of owners of our shares to sell their securities in any market that may develop
for them. Shareholders should be aware that, according to the Securities and
Exchange Commission Release No. 34-29093, the market for penny stocks has
suffered in recent years from patterns of fraud and abuse. Such patterns
include:

     o    control of the market for the security by one or a few broker-dealers
          that are often related to the promoter or issuer;

     o    manipulation of prices through prearranged matching of purchases and
          sales and false and misleading press releases;

     o    "boiler room" practices involving high pressure sales tactics and
          unrealistic price projections by inexperienced sales persons;

     o    excessive and undisclosed bid-ask differentials and markups by selling
          broker-dealers; and

     o    the wholesale dumping of the same securities by promoters and
          broker-dealers after prices have been manipulated to a desired level,
          along with the inevitable collapse of those prices with consequent
          investor losses.

THERE ARE POTENTIAL TAX CONSEQUENCES TO ANY BUSINESS COMBINATION. Federal and
state tax consequences will, in all likelihood, be major considerations in any
business combination the Company may undertake. Currently, such transactions may
be structured to result in tax-free treatment to both companies and their
shareholders, pursuant to various federal and state tax provisions. We will
attempt to structure any business combination so as to minimize the federal and
state consequences to both companies and their shareholders; however, there can
be no assurance that a business combination will meet the statutory requirements
of a tax-free reorganization or that the parties will obtain the intended
tax-free treatment upon transfer of stock or assets. A non-qualifying
reorganization could result in the imposition of both federal and state taxes
that may have an adverse effect on shareholders of the Company.

NO PUBLIC MARKET EXISTS FOR OUR STOCK. There is no public market for our Common
Stock, and no assurance can be given that a market will develop or that a
shareholder ever will be able to liquidate his investment without considerable
delay, if at all. If a market should develop, the price may be highly volatile.
Factors such as those discussed in this "Risk Factors" section may have a
significant impact upon the market price of the securities offered hereby. Owing
to the low price of the securities, many brokerage firms may not be willing to
effect transactions in the securities. Even if a purchaser finds a broker
willing to effect a transaction in these securities, the combination of
brokerage commissions, state transfer taxes, if any, and any other selling costs
may exceed the selling price. Further, many lending institutions will not permit
the use of such securities as collateral for any loans.

                                       5

<PAGE>

RULE 144 SALES COULD AFFECT THE COMPANY'S STOCK PRICE. All of the outstanding
shares of the Company's Common Stock are "restricted securities" within the
meaning of Rule 144 under the Securities Act of 1933, as amended. As restricted
shares, these shares may be resold only pursuant to an effective registration
statement or under the requirements of Rule 144 or other applicable exemptions
from registration under the Act and as required under applicable state
securities laws. Rule 144 provides in essence that a person who has held
restricted securities for one year may, under certain conditions, sell every
three months, in brokerage transactions, a number of shares that does not exceed
the greater of 1.0% of company's outstanding common stock or the average weekly
trading volume during the four calender weeks prior to the sale. There is no
limit on the amount of restricted securities that may be sold by a nonaffiliate
after the restricted securities have been held by the owner for a period of two
years. A sale under Rule 144 or under any other exemption from the Act, if
available, or pursuant to subsequent registration of shares of Common Stock of
present stockholders, may have a depressive effect upon the price of the Common
Stock in any market that may develop.

WE DO NOT ANTICIPATE PAYING DIVIDENDS TO COMMON STOCKHOLDERS IN THE FORESEEABLE
FUTURE. We have not paid dividends on our common stock and do not anticipate
paying dividends on our common stock in the foreseeable future. We expect to use
all of our funds generated by operations for reinvestment in our operating
activities.

Item 7.  Financial Statements

Financial statements and supplementary data are set forth on pages F-1 through
F-8.

Item 8.  Changes In and Disagreements With Accountants on Accounting and
         Financial Disclosure

There have been no disagreements with Accountants on Accounting and Financial
Disclosure during the period covered by this report.

Item 8A. 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 frames
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 its principal financial officer, to allow timely decisions regarding
required disclosure based closely on the definition of "disclosure controls and
procedures in Rule 13a-15(f). 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 necessarily was
required to apply its judgment in evaluating the cost-benefit relationship of
possible controls and procedures.

As of the end of the period covered by this report, based on an evaluation of
the Company's controls and procedures, the Company's Chief Executive Officer and
principal financial officer concluded that the Company's disclosure controls and
procedures were effective.

There have been no significant changes in the Company's internal controls, or in
other factors that could significantly affect the internal controls, during the
last fiscal quarter.


                                       6

<PAGE>

                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons

The executive officers and directors of the Company are listed below. Each
director was appointed for a term of one year and until their successor is duly
elected.

Name                              Age             Position
----                              ---             --------
Michael Posner                    45              President, Director
Bradford L. Tolley                41              Chief Executive Officer,
                                                  Secretary, Treasurer, Director

William Meade                     34              Vice President
Dr. Gerfried Mueller              60              Director

Michael Posner has been President of the Company since August 2001. Mr. Posner
is a practicing attorney, Florida Bar Board Certified in Real Estate Law, and
has been a shareholder in the law firm of Ward, Damon, & Posner since 1989.

Bradford L. Tolley has been Chief Executive Officer, Secretary and Treasurer of
the Company since August 2001. For the past 10 years, Mr. Tolley has been
founder and President of Tolley Investments, Inc., a private investment company.

Dr. Gerfried Mueller is a private investor. Dr. Mueller is a graduate of the
University of Munich and received a doctorate degree from the University of
Zurich. He was a professor for the University of Vienna from 1979 to 1980, after
which Dr. Mueller started his own company specializing in developing and
manufacturing high-tech medical equipment.

William Meade has been Vice President of the Company since June 30, 2006. Mr.
Meade is a licensed attorney, and also holds an MBA in international finance.
Mr. Meade has previous experience as a senior equity and convertible bond
analyst for a leading money management/hedge fund firm, and has also worked as a
Senior Quantitative Analyst for an independent equity research firm.


Audit Committee and Code of Ethics

We have not formally appointed an audit committee, and the entire Board of
Directors currently serves the function of an audit committee. Because of the
small number of persons involved in management of the Company, we do not have an
audit committee financial expert serving on our Board. We have not yet adopted a
code of ethics applicable to our chief executive officer and chief financial
officer, or persons performing those functions, because of the small number of
persons involved in management of the Company.


Section 16(a) Beneficial Ownership Reporting Compliance

Control persons, including all directors and executive officers, of our Company
are required by Section 16(a) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), to report to the SEC their transactions in, and beneficial
ownership of, the Company's common stock, including any grants of options to
purchase common stock. To the best of the Company's knowledge, the Company's
directors and executive officers timely filed all required reports with the SEC
during the period covered by this report.

Item 10. Executive Compensation

None of our officers or directors have received any compensation from the
Company during the past three years.

                                       7

<PAGE>

Item 11. Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information with respect to the number of shares
of the Company's Common Stock that were beneficially owned by (i) each executive
officer of the Company, (ii) each director of the Company and (iii) each
shareholder of the Company who owns more than 5% of the Company's Common Stock,
all as of June 30, 2006. Each of the shareholders listed below has voting and
investment power over the shares beneficially owned. As of June 30, 2006, there
were issued and outstanding 23,077,080 shares of the Company's common stock.

Name and address of                        Shares               Percent
Beneficial Owner                     Beneficially Owned         of Class
-------------------                  ------------------         --------
Bradford L. Tolley                       15,249,129               66.1%
326 B Royal Poinciana Way
Palm Beach, FL 33480

Michael Posner                              250,000                1.1%
4420 Beacon Circle
West Palm Beach, FL 33407

Gerfried Mueller                                  0                  0%
326 B Royal Poinciana Way
Palm Beach, FL 33480

William Meade                                     0                  0%
326 B Royal Poinciana Way
Palm Beach, FL 33480

Lang Family Trust                         2,500,000               10.8%
326 B Royal Poinciana Way
Palm Beach, FL 33480


Elena Golovanova                          2,250,000                9.7%
176 Melios Drive

Jupiter, FL 33477

All Officers and Directors               15,499,129              67.2%
as a group (4 persons)


Equity Compensation Plans

We have not adopted any equity compensation plans, and have no securities
authorized for issuance under any such plan.

Item 12. Certain Relationships and Related Party Transactions

Bradford L. Tolley and/or entities controlled by him have lent us money from
time to time in order to fund our operations. The total amount we owed to Mr.
Tolley was and/or his affiliates was $49,963 as of December 31, 2005. Beginning
in September 2005, we pay or accrue $10,000 per month to Tolley Investments,
Inc., an affiliate of Mr. Tolley, for consulting and investment banking
services, and for various furniture, equipment and miscellaneous personnel
services provided by Tolley Investments.

                                       8

<PAGE>

Item 13. Exhibits

Exhibit Index

3.1    Certificate of Incorporation and Amendment to the Company's Certificate
       of Incorporation (filed as an Exhibit to the Company's Registration
       Statement on Form 10-SB filed December 5, 2000 and incorporated herein by
       this reference).

3.2    Amendment to the Company's Certificate of Incorporation filed with the
       Florida Secretary of State on October 29, 2001 (filed as an Exhibit to
       Form 8-K filed November 20, 2001 and incorporated herein by this
       reference).

3.3    Bylaws (filed as an Exhibit to Company's registration statement on Form
       10-SB filed December 5, 2000 and incorporated herein by this reference).

31.1   Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

31.2   Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer

32     Section 1350 Certifications


Item 14. Principal Accountant Fees and Services.

AUDIT FEES.

The aggregate fees billed to the Company for professional services rendered for
the audit of the Company's annual financial statements, review of the Company's
quarterly financial statements, and other services normally provided in
connection with statutory and regulatory filings or engagements was $ 3,000 for
the fiscal year ended November 30, 2004, and $10,665 for the fiscal year ended
December 31, 2005.







                                       9

<PAGE>

                                   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.

                                          REAL LOGIC, INC.



Date:       September 8, 2006             By: /s/ Bradford L. Tolley
                                              ----------------------------------
                                              Bradford L. Tolley
                                             Chief Executive Officer


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

By: /s/ Bradford L. Tolley
--------------------------
Bradford L. Tolley,
Director, Chief Executive Officer and
Treasurer (principal financial officer)

Date: September 8, 2006


By: /s/ Michael Posner
-------------------------

Michael Posner, Director
Date: September 8, 1006







                                       10

<PAGE>

                              BAUM & COMPANY, P.A.
                          1515 UNIVERSITY DR. SUITE 226
                             CORAL SPRINGS FL 33071

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors
Real Logic Inc.
(A Development Stage Company)
Palm Beach, Florida


We have audited the accompanying balance sheet of Real Logic Inc. (a development
stage company) as of December 31, 2005 and the related statements of operations,
stockholders' deficiency and cash flows for the years ended December 31, 2005,
November 30, 2004, for the month ending December 31, 2004 and cumulatively from
inception, June 28, 1999 to December 31, 2005. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on the financial statements based on our audit.


We conducted our audit 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. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.


In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Real Logic Inc (a development
stage company) as of December 31, 2005 and the results of its operations and its
cash flows for the years ended December 31, 2005, November 30, 2004, for the
month ending December 31, 2004 and cumulatively from inception, June 28, 1999 to
December 31, 2005 in conformity with United States generally accepted accounting
principles.


The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements the Company has experience a loss since inception in 1999.
The Company's financial position and operating results raise substantial doubts
about its ability to continue a going concern.. Management's plans concerning
these matters are also described in Note 2. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.


We have audited the accompanying balance sheet of Real Logic Inc. (a development
stage company) as of December 31, 2005 and the related statements of operations,
stockholders' deficiency and cash flows for the years ended December 31, 2005,
November 30, 2004, for the month ending December 31, 2004 and cumulatively from
inception, June 28, 1999 to December 31, 2005. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on the financial statements based on our audit.

We conducted our audit 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. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Real Logic Inc (a development
stage company) as of December 31, 2005 and the results of its operations and its
cash flows for the years ended December 31, 2005, November 30, 2004, for the
month ending December 31, 2004 and cumulatively from inception, June 28, 1999 to
December 31, 2005 in conformity with United States generally accepted accounting
principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements the Company has experience a loss since inception in 1999.
The Company's financial position and operating results raise substantial doubts
about its ability to continue a going concern.. Management's plans concerning
these matters are also described in Note 2. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.


Coral Springs, Florida
August 8, 2006

                                       F-1
<PAGE>



                                REAL LOGIC, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                                  BALANCE SHEET
                                DECEMBER 31, 2005
<TABLE>
<S>                                                                      <C>
                                   ASSETS
CURRENT ASSETS
   Cash                                                                  $   5,015
                                                                         ---------

            Total current assets                                             5,015

Other Assets-Security Deposit                                                1,900
                                                                         ---------

Total Assets                                                             $   6,915
                                                                         =========
               LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
     Accounts payable                                                    $  32,362
     Loans payable-related parties
                                                                            49,963
     Accrued expenses payable-related parties
                                                                             6,027
                                                                         ---------

            Total current liabilities                                       88,352
                                                                         ---------

Total Liabilities                                                           88,352
                                                                         ---------
STOCKHOLDERS' EQUITY (DEFICIT)
    Preferred  stock, $0. 001 par value,
      20,000,000 shares authorized;
      none issued and outstanding                                                0
    Common stock, $0. 001 par value,
      50,000,000 shares authorized;
      22,944,580 shares issued and outstanding                              22,945
    Additional paid in capital                                             254,638
    Deficit accumulated during the development stage                      (359,020)
                                                                         ---------
            Total stockholders' equity (deficit)                           (81,437)
                                                                         ---------
Total Liabilities and Stockholders' Equity (Deficit)                     $   6,915
                                                                         =========
</TABLE>

     The accompanying notes are an integral part of the financial statements

                                       F-2

<PAGE>
                                REAL LOGIC, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                     CUMULATIVE FROM
                                                    DATE OF INCEPTION                      FOR THE ONE MONTH
                                                     (JUNE 28, 1999)       YEAR ENDED        PERIOD ENDED       YEAR ENDED
                                                     TO DECEMBER 31,      DECEMBER 31,        DECEMBER 31,     NOVEMBER 30,
                                                          2005                2005                2004             2004
                                                    -----------------     ------------     -----------------   ------------
<S>                                                      <C>              <C>                  <C>              <C>
REVENUES                                                        $0                $0                   $0               $0


OPERATING EXPENSES                                         352,993           206,175                    0                0
                                                         ---------        ----------           ----------       ----------

Operating loss before interest expense                    (352,993)         (206,175)                   0                0

INTEREST EXPENSE                                             6,027             6,027                    0                0
                                                         ---------        ----------           ----------       ----------

Loss before provision for income taxes                    (359,020)         (212,202)                   0                0
Income taxes                                                   -0-               -0-                  -0-              -0-
                                                         ---------        ----------           ----------       ----------

Net income (loss)                                        $(359,020)        $(212,202)                  $0               $0
                                                         ---------        ----------           ----------       ----------

Net income (loss) per common share, basic
and diluted                                                                   $(0.01)               $0.00            $0.00
                                                                          ==========           ==========       ==========

Weighted average shares of common stock
outstanding-basic and diluted                                             19,834,300           18,271,000       18,271,000
                                                                          ==========           ==========       ==========
</TABLE>

     The accompanying notes are an integral part of the financial statements

                                       F-3

<PAGE>
                                             REAL LOGIC, INC.
                                      (A DEVELOPMENT STAGE COMPANY)
                               STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
                                                                                                              TOTAL
                                                           COMMON         ADDITIONAL                       STOCKHOLDERS'
                                         NUMBER OF         STOCK            PAID-IN        ACCUMULATED        EQUITY
                                          SHARES           AMOUNT           CAPITAL          DEFICIT         (DEFICIT)
                                        -----------      -----------      -----------      -----------     -------------
<S>                                     <C>             <C>              <C>              <C>              <C>
BEGINNING BALANCE Feb. 18, 1999                   0      $         0      $         0      $         0      $         0

Issuance of common stock                  2,000,000              200                0                0              200
Net loss-November 30, 1999                        0                0                0                0                0
                                        -----------      -----------      -----------      -----------      -----------

BALANCE,  November 30, 1999               2,000,000              200                0                0              200

Net loss-November 30, 2000                        0                0                0                0                0
                                        -----------      -----------      -----------      -----------      -----------

BALANCE,  November 30, 2000               2,000,000              200                0                0              200

Revise common stock par value                     0            1,800           (1,800)               0                0
Net loss-November 30, 2001                        0                0                0             (200)            (200)
                                        -----------      -----------      -----------      -----------      -----------

BALANCE,  November 30, 2001               2,000,000            2,000           (1,800)            (200)               0

Common stock sold                         9,446,000            9,446           31,900                0           41,346
Common stock issued for services            300,000              300                0                0              300

Net loss-November 30, 2002                        0                0                0         (107,548)        (107,548)
                                        -----------      -----------      -----------      -----------      -----------

BALANCE,  November 30, 2002              11,746,000           11,746           30,100         (107,748)         (65,902)

Common stock sold                         6,525,000            6,525                0                0            6,525

Net loss-November 30, 2003                        0                0                0          (30,359)         (30,359)
                                        -----------      -----------      -----------      -----------      -----------

BALANCE,  November 30, 2003              18,271,000           18,271           30,100         (138,107)         (89,736)

Net loss-November 30, 2004                        0                0                0                0                0
BALANCE,  November 30, 2004              18,271,000           18,271           30,100         (138,107)         (89,736)

Net loss-December 31, 2004                        0                0                0                0                0
                                        -----------      -----------      -----------      -----------      -----------

BALANCE,  December 31, 2004              18,271,000           18,271           30,100         (138,107)         (89,736)

Common Stock Sold for Cash                3,752,500            3,753          213,748          217,501
Common Stock Issued for Services             50,000               50            2,950            3,000
Common stock issued for acquisition         871,080              871            7,840           (8,711)               0
Net Loss-December 31, 2005                 (212,202)        (212,202)
                                        -----------      -----------      -----------      -----------      -----------

BALANCE, December 31, 2005               22,944,580      $    22,945      $   254,638      $  (359,020)     $   (81,437)
                                        ===========      ===========      ===========      ===========      ===========
</TABLE>

     The accompanying notes are an integral part of the financial statements

                                       F-4

<PAGE>
                                REAL LOGIC, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                                          FOR THE
                                                         CUMULATIVE FROM    TWELVE      FOR THE ONE      FOR THE
                                                        DATE OF INCEPTION   MONTHS      MONTH PERIOD  TWELVE MONTHS
                                                         (JUNE 28, 1999)     ENDED          ENDED         ENDED
                                                         TO DECEMBER 31,  DECEMBER 31,   DECEMBER 31,  NOVEMBER 30,
                                                               2005          2005            2004          2004
                                                            ---------      ---------      ---------     ---------
<S>                                                         <C>            <C>            <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                                           $(359,020)     $(212,202)     $       0     $       0
Adjustments to reconcile net income to
  net cash provided by operating activities:
 Stock based compensation                                       3,300          3,000              0             0
 Accumulated loss of acquisition                                8,711              0
 Changes in operating assets and liabilities:

  (Increase)  in rent deposits                                 (1,900)        (1,900)             0             0
  Increase (decrease) in accounts payable                      32,362         27,862              0             0
  Increase (decrease) in accrued expenses-related party         6,027          6,027              0             0
                                                            ---------      ---------      ---------     ---------

Net cash provided (used) by operating activities             (310,520)      (177,213)             0             0
                                                            ---------      ---------      ---------     ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Loans Payable Proceeds- related parties                      103,260         11,500              0             0
 Loans Payable Repayments- related parties                    (46,773)       (46,773)
 Proceeds from sale of common stock                           259,048        217,501              0             0
                                                            ---------      ---------      ---------     ---------

Net cash provided (used) by financing activities              315,535        182,228              0             0
                                                            ---------      ---------      ---------     ---------

Net increase (decrease) in cash                                 5,015          5,015              0             0

CASH and equivalents, beginning of period                           0              0              0             0
                                                            ---------      ---------      ---------     ---------

CASH and equivalents, end of period                         $   5,015      $   5,015      $       0     $       0
                                                            =========      =========      =========     =========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Payment of taxes                                            $       0      $       0      $       0     $       0
                                                            =========      =========      =========     =========
Payment of interest in cash                                 $       0      $       0      $       0     $       0
                                                            =========      =========      =========     =========

SUPPLEMENTAL DISCLOSURE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES:
Stock Issued for Services                                   $   3,300      $   3,000      $       0     $       0
                                                            =========      =========      =========     =========

Stock Issued for Acquisition of Timber Property, Inc.       $   8,711      $   8,711      $       0     $       0
                                                            =========      =========      =========     =========
</TABLE>

     The accompanying notes are an integral part of the financial statements

                                       F-5

<PAGE>


                                REAL LOGIC, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2005


NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

Organization and Operations

The Company was organized under the laws of the State of Florida on June 28,
1999. The Company is in the development stage. The Company is a "shell" whose
sole purpose is to locate and consummate a reverse merger or reverse acquisition
with an unidentified private entity. On October 29, 2002, the Company has
changed its corporate name from Xelos, Inc. to Real Logic Inc.

Basis of Accounting

The Company's policy is to prepare its financial statements using the accrual
basis of accounting in accordance with generally accepted accounting principles.
The Company has elected December 31 as it's annual year-end.

Use of Estimates

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

Cash and Equivalent

Cash and cash equivalents include cash and cash in banks. The Company maintains
cash and cash equivalent balances at a financial institution that is insured by
the Federal Deposit Insurance Corporation up to $100,000.

Organization Costs

The Company has incurred various expenditures in the formation of its corporate
and organizational structure. In accordance with SOP98-5 these costs were
expensed as incurred.

Revenue Recognition

The Company will recognize revenue upon completion of its services to be
rendered or delivery of products to its customers. The Company has not generated
revenues since inception

Development Stage

The Company is in its development stage. The Company since inception has not
commenced its operations, nor has generated sufficient working capital to pursue
its business objectives. The accumulated deficit during its development stage is
approximately $359,000.


                                      F-6

<PAGE>


                                REAL LOGIC, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2005


NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Net Earnings (Loss) Per Share

The Company reports its net earnings (losses) per share in accordance with SFAS
No. 128 "Earnings Per Share". Basic net earnings (losses) per share is computed
by dividing net income (loss) available to common stockholders by the weighted
averaged number of common shares outstanding. Diluted earnings (losses) per
share is computed similar to basic earnings (losses) per share except that the
denominator is increased to include the number of additional common shares that
would have been outstanding. As of December 31, 2005, there are no outstanding
stock options or stock warrants that would have affected the computation.

Fair Value of Financial Instruments

Statement of Financial Accounting Standards No. 107, "Disclosures about Fair
Value of Financial Instruments", requires disclosures of information about the
fair value of certain financial instruments for which it is practicable to
estimate the value. For purpose of this disclosure, the fair value of a
financial instrument is the amount at which the instrument could be exchanged in
a current transaction between willing parties, other than in a forced sale or
liquidation.

The carrying amounts reported in the balance sheet for cash, accounts payable
and accrued expenses, and loans payable approximate their fair market value
based on the short-term maturity of these instruments.

PROPERTY AND EQUIPMENT

Property and equipment when acquired will be stated at cost. Depreciation and
amortization will be provided using the straight-line method over the estimated
economic lives of the assets. Expenditures for major renewals and betterments
that extend the useful lives of property and equipment are capitalized.
Expenditures for maintenance and repairs are charged to expense as incurred. In
accordance with Statement of Financial Accounting Standards (SFAS) No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets", the Company
examines the possibility of decreases in the value of property and equipment
when events or changes in circumstances reflect the fact that their recorded
value may not be recoverable.





                                      F-7

<PAGE>


                                REAL LOGIC, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2005


NOTE 2 - GOING CONCERN

As shown in the accompanying financial statements, the Company incurred net
losses for the year ending December 31, 2005 of approximately
$212,000, and cumulatively since inception, for the period February 3, 1999 to
December 31, 2005 of approximately $359,000. There is no guarantee whether the
Company will be able to generate enough revenue and/or raise capital to support
those operations. This raises substantial doubt about the Company's ability to
continue as a going concern.

Management states that they are confident that they can improve operations and
raise the appropriate funds to grow their underlying business and acquire other
businesses. The financial statements do not include any adjustments that might
result from the outcome of these uncertainties.

NOTE 3 - INCOME TAX

In February 1992, the Financial Standards Board issued Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes." Under SFAS No.
109,deferred assets and liabilities are recognized for the estimated future tax
consequences between the financial statement carrying amounts of the existing
assets and their respective basis.

Deferred assets and liabilities are measured using enacted tax rates in effect
for the year in which temporary differences are expected to be recovered or
settled. Under SFAS No. 109, the effect on deferred assets and liabilities of a
change in tax rates is recognized in the period that includes the enactment
date.

                                               Year ending
                                ---------------------------------------
                                     December 31,          November 30,
                                         2005                  2004
                                     ------------          ------------
Statutory federal income tax rate         34%                  34%
Valuation allowance                      (34)                 (34)
Effective tax rate                        --%                  --%

The Company has a net operating loss carry forward as of December 31, 2005 of
approximately $350,000 which is offset by a 100% valuation allowance due to the
uncertainty surrounding the ultimate realization of these assets. The loss
carry-forward expires progressively in 15 years from 2001.

NOTE 4 - RELATED PARTY TRANSACTIONS

A related party has been paid $ 79,819 for professional services made on behalf
of the company during the year ended December 31, 2005.



                                      F-8

<PAGE>


                                REAL LOGIC, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2005


NOTE 5 - LOANS PAYABLE RELATED PARTIES

Reflects advances from major stockholders, no due date, and unsecured. Interest
commenced accruing at January 1, 2005 at 7%.

NOTE 6 - CAPITAL TRANSACTIONS

On August 29, 2002, the par value of common stock was changed to $.001. During
the year the company sold 8,846,000 shares of common stock at par value for
$8,846 and 600,000 shares of common stock for $32,700. The company issued
300,000 shares for services valued at $300. In February 2003, the company issued
6,525,000 shares of common stock at par value for $6,525 of prior advances. In
Year 2004, there were no capital transactions. In 2005, the company sold, to
various investors, 3,752,500 shares of common stock for $217,500. The company
issued 50,000 shares for services valued at $3,000. On September 9, 2005, the
company issued 871,080 shares to the Timber Property Shareholders upon the
merger of Timber Property, Inc., into Real Logic, Inc.

NOTE 7 - ACQUISITION


On September 9, 2005 the Company acquired 100% of the outstanding shares of
Timber Property, a dormant entity without assets or liabilities. The purpose for
this transaction was solely to increase the shareholder base of the Company.

The controlling shareholder of Timber Property was also the controlling
shareholder of the Company. Subsequent to the merger, this individual continued
to be the controlling shareholder of the Company. Accordingly, the acquisition
was accounted for as a merger between entities under common control in
accordance with SFAS #141, Business Combinations, paragraphs D-11 and D-12. As
such the assets and liabilities were recorded at zero, the carrying amounts in
the accounts of the transferring entity.



NOTE 8 - LEASE COMMITMENTS

The company rents office space in Palm Beach Florida, under a lease that
commenced in March 2005 and expires in March 2007. The rent and CAM expenses for
2005 was $20,335. Future lease expenses are approximately $ 25,560 in 2006 and
$6,390.




                                      F-9

<PAGE>


                                REAL LOGIC, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2005


NOTE 9 - NEW ACCOUNTING PRONOUNCEMENTS,

In November 2005, the FASB issued Statement of Financial Accounting Standards
(SFAS) No. 151, Inventory Costs, which clarifies the accounting for abnormal
amounts of idle facility expense, freight, handling costs, and wasted material.
SFAS No. 151 will be effective for inventory costs incurred during fiscal years
beginning after June 15, 2005. We do not believe the adoption of SFAS No. 151
will have a material impact on our financial statements.

In December 2005, the FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets,
which eliminates the exception for nonmonetary exchanges of similar productive
assets and replaces it with a general exception for exchanges of nonmonetary
assets that do not have commercial substance. SFAS No. 153 will be effective for
nonmonetary asset exchanges occurring in fiscal periods beginning after June 15,
2005. We do not believe the adoption of SFAS No. 153 will have a material impact
on our financial statements.

In December 2005, the FASB issued SFAS No. 123 (R) Share-Based Payment, which
establishes standards for transactions in which an entity exchanges its equity
instruments for goods or services. This standard requires a public entity to
measure the cost of employee services received in exchange for an award of
equity instruments based on the grant-date fair value of the award. This
eliminates the exception to account for such awards using the intrinsic method
previously allowable under APB Opinion No. 25. SFAS No. 123 (R) will be
effective for interim or annual reporting periods beginning on or after June 15,
2005. We believe SFAS No. 123(R) may have a material impact on financial
statements at such time as options are issued.

In February 2006 the Financial Accounting Standards Board issued Statement No.
155 ("SFAS No 155"), "Accounting for Certain Hybrid Instruments: An Amendment of
FASB Statements No. 133 and 140". Management does not believe that this
statement will have a significant impact as the Company does not use such
instruments.


NOTE 10 - SUBSEQUENT EVENT

On June 7, 2006, the Company entered into an Agreement (the "Agreement") for the
development of an alternative transportation vehicle, pursuant to which the
Company acquired certain in-process research and development. This transaction
was consummated on July 20, 2006. The Agreement called for the formation of a
new entity in which the Company would hold a 60% ownership interest, with the
remaining 40% owned by two individuals. One of these individuals was to
contribute certain research and development with a value of $130,000 in exchange
for a promissory note of $130,000. The Company was to issue 125,000 shares of
its common stock to the two individuals.

Upon the closing of the transaction in July 2006, the research and development
was expensed in accordance with SFAS # 2, Accounting for Research and
Development Costs. The value of the stock issued by the Company was determined
by management to be $0.25 per share ($31,250) based upon the most recent sale of
unregistered common stock.

The Company determined that any goodwill arising on the acquisition had no
inherent value, and as such treated the goodwill as having been impaired in
accordance with SFAS #142, Goodwill and Other Intangible Assets.

As the subsidiary effectively has minimal value, the Company determined that
this was not a significant acquisition and that form 8K was not required.



                                      F-10