UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

______________

FORM 10-KSB

______________

þANNUAL REPORT UNDER OR OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2007

 ̈TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE 
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) 833- 9808

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

None

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

Common Stock, par value $.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 þ  No  ̈

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. þ

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange act). Yes  ̈  No þ

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

The aggregate market value of our common stock held by non-affiliates was approximately $824,800 as of March 31, 2008, based on the average bid and asked price as of that date.

The number of outstanding shares of our common stock on March 31, 2008 was 28,395,580.

Transitional Small Business Disclosure Format: Yes  ̈  No þ









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PART  I

Special Note Regarding Forward-Looking Statements

This annual report on Form 10-KSB and the documents incorporated by reference herein contain forward looking statements that are not statements of historical fact and may involve a number of risks and uncertainties. These statements relate to managements analysis and other information that is based on forecasts of future results and estimates of time lines, etc., that are not yet determinable. These statements may also include references to our future plans, prospects, and business strategies.

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, including the following factors that may cause actual results to differ materially from our forward looking statements:

1.

The general global economy and industry conditions

2.

Our limited operating history

3.

Industry competition

4.

Environmental and government regulation

5.

Whether the alternative transportation vehicle industry will continue to grow

6.

Our ability to obtain approval, if required, from government authorities for our vehicles

7.

Our ability to fund short term and long term capital financing

Note that forward looking statements made by management in this annual report speaks only as of the date on which the report references.

Item 1.

The Business

Real Logic, Inc. was incorporated in the state of Florida on June 28, 1999. Our primary activity was to locate and acquire an operating company in an industry that had potential for development while making contributions to society. 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 mid 2005, along with government and various industries, we debated how best to alleviate the growing transportation problems and concurrently assist clean air environment efforts. We began to target potential acquisition company candidates that had already been involved in research and development for what was fast becoming known as alternative transportation vehicles. We were looking for something that was close or ready to be brought to market. These vehicles included 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 design for an off road vehicle, an alternative transportation vehicle, that was capable of providing transportation in many parts of the world, at cost effective pricing. The vehicle was designed to be a lightweight vehicle with minimal fuel



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consumption, while carrying multiple persons and capable of achieving speeds of up to 70 miles per hour. The company acquired a 60% percent interest in a new development company that was incorporated in the State of Florida, Duncan Motor Company.

We look to acquire additional advanced technology vehicles and evaluate the feasibility of integrating potential prototypes into our existing product line. We intend to focus on the International Markets which are looking for dependable and inexpensive transportation.  We believe the Company is one of the first to pioneer a growing niche for alternative transportation, and our goal is to become known as a source for new technology vehicles for transportation.

During the last quarter of the year, in conformity with our dedication to green technology, we pursued several  potential candidates involved in clean energy.  The company intends to establish a Clean Energy Division,  Andover Energy, Inc., that will be a Florida Corporation.  This Division will enable the structure for the company to make multiple acquisitions of clean energy companies.

Subsidiary:  Duncan Motor Company

In June, 2006, we formed a subsidiary, Duncan Motor Company, a Florida Corporation, which is managed by Richard Duncan, the creator of the prototype, who owns 35% of Duncan Motor Company. Joining the Duncan management team is Dr. Robert Wright, an engineer and expert witness for automobile impact who designed the safety features for the prototype. He owns 5% of Duncan Motor Company. The Company owns 60% of Duncan Motor Company.  During the last quarter, 2006, we were fortunate to attract Elena Golovanova, a highly qualified international business woman, who has assumed the position of Director of Marketing and Sales for Duncan Motor Company.

Duncan Business Development

Ms. Golovanova has made significant progress in developing relationships and interested parties for international vehicle sales.  During the year, Ms. Golovanova made two trips to Russia and other neighboring countries in Eastern Europe in order to introduce and make presentations of the Duncan vehicle.  The fuel efficient and low emissions prototype would be utilized in these markets as primary transportation, and our initial Market Selling Pricing was well received.  We expect Ms. Golovanova will conclude several large contract orders as early as the second quarter of 2008.

Throughout the year, the Duncan engineers studied the progress and development of various new market  'batteries' for vehicles that would enable the Company to launch our electric vehicle prototype that has been on the drawing board for over a year.  Utilizing our standard platform frame, we believe our 'e' Duncan, will set a new standard for an inexpensive electric vehicle.  We intend to go into production with a battery powered electric drive system with a generator back up, enabling a driving range over 200 miles that will recharge in only 5 minutes.  The electric drive system(s) will be made available in both on-road and off-road models.



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RISK FACTORS

We have limited operating history or revenue and minimal assets. We have limited operating history, and no 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 manufacturing and sales initiate. This may result in the Company incurring net operating losses until we can generate revenues.

Our proposed operations are speculative. The success of our plan of operation will depend to a great extent on the companys ability to raise capital for manufacturing of products and establish an effective distribution plan.

We face intense competition. We compete with larger, better capitalized companies that have had working relationships with vendors, distributors, financial establishments and other resources that we do not have

Changes in the marketplace. Changes in the market for Alternative Transportation Vehicles and Clean Energy may overtake our progress and cause our product lines to become obsolete or loose market share.

Failure of parts suppliers. We intend to rely on certain key suppliers to provide parts for vehicle assembly of our prototype. The company could experience a negative impact upon achieving sales goals if suppliers were to default on deliveries.

Regulatory requirements impact. Currently, regulatory requirements do not negatively impact our products. However, it is possible that substantial regulation under federal, state, and local laws may be imposed at some future date on alternative transportation vehicles. Compliance may prove to be burdensome and expensive.

International product sales. It is the Companys belief that international sales of our Duncan Models will represent a significant percentage of our annual sales. A failure to address the risks associated with international business issues, i.e. fluctuations in currency exchange rates, political and economical instability, regulatory compliance, contract enforcement, etc. could greatly impact revenues.

Our Securities and Exchange Commission reporting requirements may delay or preclude future acquisitions. 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.

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 ability 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 Chief Executive Officer owns approximately 56% of our outstanding stock. As a result, other investors in ourcommon stock will not have a significant influence on corporate decision-making.

Regulation as a penny stock. The trading price of our stock results 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.

Rule 144 sales could affect the Companys stock price. Most 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. Restricted 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 during any three month period, 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 calendar weeks prior to the sale. There is no limit on the amount of restricted securities that may be sold by nonaffiliated persons 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



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registration of shares of Common Stock of present stockholders, may have a depressive effect upon the price of the Common Stock inany market that may develop.

Item 2.

Property

We own no real estate. Our corporate offices are located at 340 Royal Poinciana Way, Suite 326 B, Palm Beach, FL., 33480. We pay rent of approximately $2,400 per month for our offices. We believe this space will be adequate for our needs for the foreseeable future.  Our subsidiaries operate from their own strategically located headquarters.

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.



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PART  II

Item 5.

Market for Common Equity and Related Stockholder Matters.

Our common stock began trading in the Over-The-Counter market under the symbol "RLLC", on August 29, 2007.   The following table sets forth the high and low bid, as reported by Stockwatch, for our common stock for the calendar periods indicated.

|            |  |             
|----------- |  | ------------
|Period      |  | Bid
High/Low
|2007        |  |             
|3rd Quarter |  | 1.75/1.00   
|4th Quarter |  | 1.00/ .12   

The average of the bid and ask price of our common stock in the over-the-counter market as of March 31, 2008 was $0.14 per share. The above quotations do not include retail mark-ups, mark-downs or commissions and represents prices between dealers and not necessarily actual transactions. The past performance of our securities is not necessarily indicative of future performance.

Holders of Record

As of March 31, 2008, we had approximately 1,132 shareholders of our common stock, which is the only class of stock which we have outstanding, according to a shareholder list provided by our transfer agent as of that date. Our transfer agent is Florida Atlantic Stock Transfer.

Recent Sales of Unregistered Securities

None

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 Plan of Operation.

We are a development stage company as defined in the Statement of Financial Accounting Standards No. 7, with limited operations. We have had no Revenues since inception.  In June 2006 we entered into an Asset Purchase Agreement in order to collaborate in the development, manufacture and marketing of a superior design for an off road vehicle, an alternative transportation vehicle, that was capable of providing transportation to many parts of the world, at cost effective pricing. The vehicle was designed to be a lightweight vehicle with minimal fuel consumption, while carrying multiple persons and capable of achieving speeds of up to 70 miles per hour.

Duncan management continues research and development to increase fuel efficiency and lower emissions.   The plan is to continue to use a standard platform frame enabling multiple prototypes for manufacturing at very cost effective pricing.  An electric prototype has been designed that will be brought to market at such time adequate batteries become available to make this model practical and cost effective..

We look to acquire other advanced technologies and are currently planning to establish a new division that will specialize in clean energy technology.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with and are qualified by reference to, our Financial Statements and the related Footnotes of this report. Certain statements and forth below under this caption constitute forward looking statements within the meaning of the Private Securities Litigation Reform of 1995. Also, for a discussion of certain Risk Factors applicable to our business and operations see Risk Factors in Item 1 of this report.

As of December 31, 2007, the Company's accumulated deficit was $2,762,445 and we had a working capital deficit of $809,372.  Until we initiate sales of the Duncan vehicle prototypes and achieve profitable



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operations, we are dependant upon funding from our principal shareholders,Bradford L. Tolley. In order to begin production of the Duncan vehicle, we need a significant amount of capital which we are in the process of securing.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements

Item 7.

Financial Statements

Financial statements and supplementary data are set forth on Pages F1 through F10.

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, including financial 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, who is currently serving as the Company's 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, including those pertaining to financial disclosure, were effective.

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

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.

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 managementnecessarily 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.



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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                        |  | 47  |  | President                     
|Bradford L. Tolley                    |  | 43  |  | Chief Executive Officer,      
|                                      |  |     |  | Secretary, Treasurer, Director
|William Meade                         |  | 36  |  | Vice President                
|Dr. Gerfried Mueller
Elena Golovanova |  | 62  |  | Director
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, Director, 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 has been a director of the Company since July 2005. For the past approximately seven years, Dr. Mueller has been a private investor in various opportunities. 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. Dr. Mueller was Managing Director for his own company specializing in developing and manufacturing of high-tech medical equipment, until sale of his company.

William Meade has been Vice President of the Company since June 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.

Elena Golovanova has been a director of the Company since September 2007and is Vice President of Sales and Marketing of our Duncan Motor Company, Inc., a subsidiary.  Ms. Golovanova was born and educated in Russia and has previous experience in International Marketing of next generation automobile lines.  She will oversee the burgeoning European marketplace, Russia, the Ukraine, the Baltic states, the Balkans, and the Commonwealth of Independent States.

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.



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Item 10.

Executive Compensation

The following table sets forth all compensation paid or earned for services rendered to the Company in all capacities during the years ended December 31, 2007, 2006 and 2005, by our Chief Executive Officer.  No other executive officer received total annual salary, bonus and other compensation in excess of $100,000 in those periods.

|                            |  |           |  |                     |  |           |  |                               |    
|--------------------------- |  | --------- |  | ------------------- |  | --------- |  | ----------------------------- | ---
|                            |  |           |  | Annual Compensation |  |           | 
|Name And Principal Position |  | Year      |  | Salary ($)          |  | Bonus ($) |  | Other
Annual
Compensation ($) |    
|Bradford L. Tolley          |  | 2007      |  | 0                   |  | 0         |  | 83,500                        | (1)
|Chief Executive Officer     |  | 2006
2005 |  | 0
0                 |  | 0
0       |  | 0
0                           |    



(1)

Paid by issuing to Mr. Tolley 350,000 shares of common stock valued at approximately $0.24 per share.

Effective July 1, 2007, the Board of Directors of the Company approved an employment arrangement with Bradford L. Tolley to serve as the Companys Chief Executive Officer for a term of five years, with a renewal option for an additional three years.  Under the Agreement, Mr. Tolley is to receive an annual base salary of $175,000, plus a bonus based on achieving definitive benchmarks to be established by the Companys Board of Directors.

No other officer has an employment arrangement with the Company.  They are compensated from time to time based upon services rendered to the Company.  During 2007, Michael Posner, President of Real Logic, Inc., Richard Duncan, President of Duncan Motor Company, and Elena Golovanova, Vice President of Duncan Motor Company, collectively received a total of 85,000 shares of common stock valued at a total of $36,200.



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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 March 31, 2008. Each of the shareholders listed below has voting and investment power over the shares beneficially owned. As of March 31, 2008 there were issued and outstanding 28,395,580 shares of the Company's common stock.

|                                     |  |                            |  |                 
|------------------------------------ |  | -------------------------- |  | ----------------
|Name and address of Beneficial Owner |  | Shares
Beneficially 
Owned |  | Percent
of Class
|                                     |  |                            |  |                 
|Bradford L. Tolley                   |  | 15,835,150                 |  | 55.8%           
|326 B Royal Poinciana Way            |  |                            |  |                 
|Palm Beach, FL 33480                 |  |                            |  |                 
|                                     |  |                            |  |                 
|Michael Posner                       |  | 250,000                    |  | 0.9%            
|4420 Beacon Circle                   |  |                            |  |                 
|West Palm Beach, FL 33407            |  |                            |  |                 
|                                     |  |                            |  |                 
|Gerfried Mueller                     |  | 300,000                    |  | 1.1%            
|326 B Royal Poinciana Way            |  |                            |  |                 
|Palm Beach, FL 33480                 |  |                            |  |                 
|                                     |  |                            |  |                 
|William Meade                        |  | 100,000                    |  | 0.4%            
|326 B Royal Poinciana Way            |  |                            |  |                 
|Palm Beach, FL 33480                 |  |                            |  |                 
|                                     |  |                            |  |                 
|The Lang Family Trust                |  | 3,169,000                  |  | 11.2%           
|326 B Royal Poinciana Way            |  |                            |  |                 
|Palm Beach, FL 33480                 |  |                            |  |                 
|                                     |  |                            |  |                 
|Elena Golovanova                     |  | 2,850,000                  |  | 10.0%           
|326 B Royal Poinciana Way            |  |                            |  |                 
|Palm Beach, FL., 33480               |  |                            |  |                 
|                                     |  |                            |  |                 
|All Executive Officers and Directors |  | 19,335,150                 |  | 68.1%           
|as a group (5 persons)               |  |                            |  |                 

Equity Compensation Plans

In September 2007, the Company adopted a Stock Compensation Plan. This Plan is intended to advance the best interests of the Company by permitting the Company to issue stock to select employees, officers, directors, and key consultants to the Company and its subsidiaries who have substantial responsibility for the management and growth of the Company and its subsidiaries in order to increase their proprietary interest in the success of the Company, thereby encouraging them to remain in the employ of the Company or any of its subsidiaries.  The Plan is administered by a Committee of two non-employee Directors of the Company.  The Company has reserved a total of 1,000,000 shares for issuance under the Plan, and has filed an S-8 Registration Statement registering the issuance of shares under the Plan.

During 2007, the Company issued a total of 395,000 shares under the Plan.



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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 owed to Mr. Tolley and/or his affiliates was $254,566 as of December 31, 2007.  Beginning in January 2007, we pay or accrue $15,000 per month to Tolley Investments, Inc., an affiliate of Mr. Tolley, for professional investment banking services.

Item 13.

Exhibits.

|               |  |                                                                                                                                                                                                                                       
|-------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit  Index |  | Description                                                                                                                                                                                                                           
|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  $14,500 for the year ended December 31, 2006 and $24,675 for the year ended December 31, 2007.

Tax Fees

The aggregate fees billed to the Company for professional services rendered for completion of the Company's tax returns was $500 in 2006 and $1,125 in 2007.



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SIGNATURES

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

|                                                                                                                                                                              |                  |                                                                                                              
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------- | -------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                              | REAL LOGIC, INC.
|                                                                                                                                                                              |                  |                                                                                                              
|                                                                                                                                                                              | By:              | /s/ BRADFORD L. TOLLEY                                                                                       
|                                                                                                                                                                              |                  | Bradford L. Tolley,                                                                                          
|                                                                                                                                                                              |                  | Chief Executive Officer                                                                                      
|                                                                                                                                                                              |                  | Date: April 14, 2008                                                                                         
|                                                                                                                                                                              |                  |                                                                                                              
|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 executive officer
and principal financial officer)
|                                                                                                                                                                              |                  | Date: April 14, 2008                                                                                         
|                                                                                                                                                                              |                  |                                                                                                              
|                                                                                                                                                                              | By:              | /s/ GERFRIED MUELLER                                                                                         
|                                                                                                                                                                              |                  | Gerfried Mueller, Director                                                                                   
|                                                                                                                                                                              |                  | Date: April 14, 2008                                                                                         
|                                                                                                                                                                              |                  |                                                                                                              
|                                                                                                                                                                              | By:              |                                                                                                              
|                                                                                                                                                                              |                  | Elena Golovanovo, Director                                                                                   
|                                                                                                                                                                              |                  | Date: April __, 2008                                                                                         
|                                                                                                                                                                              |                  |                                                                                                              





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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, 2007 and the related statements of operations, stockholders' deficiency and cash flows for the years ended December 31, 2007 and 2006, and cumulatively from inception, June 28, 1999 to December 31, 2007. 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, 2007 and the results of its operations and its cash flows for the years ended December 31, 2007 and 2006 and cumulatively from inception, June 28, 1999 to December 31, 2007 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.



/s/ Baum & Company, P.A.

Coral Springs, Florida

April 11, 2008



F-1



---





REAL LOGIC, INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED BALANCE SHEET

DECEMBER 31, 2007



|                                                                                                       |  |   |            |  
|------------------------------------------------------------------------------------------------------ |  | - | ---------- | -
|ASSETS                                                                                                 |  |   |            |  
|                                                                                                       |  |   |            |  
|Current Assets                                                                                         |  |   |            |  
|Cash                                                                                                   |  | $ |           |  
|Total current assets                                                                                   |  |   |           |  
|                                                                                                       |  |   |            |  
|Property and Equipment-net                                                                             |  |   | 2,260      |  
|                                                                                                       |  |   |            |  
|Other Assets-Security Deposit                                                                          |  |   | 1,900      |  
|                                                                                                       |  |   |            |  
|Total Assets                                                                                           |  | $ | 4,160      |  
|                                                                                                       |  |   |            |  
|LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                                                         |  |   |            |  
|                                                                                                       |  |   |            |  
|Current Liabilities                                                                                    |  |   |            |  
|Cash overdraft                                                                                         |  | $ | 2,666      |  
|Accounts payable and accrued expenses                                                                  |  |   | 116,130    |  
|Accounts payable and accrued expenses-related parties                                                  |  |   | 266,360    |  
|Line of credit                                                                                         |  |   | 25,275     |  
|Note payable                                                                                           |  |   | 130,000    |  
|Loans payable                                                                                          |  |   | 77,500     |  
|Loans payable and accrued expenses-related parties                                                     |  |   | 191,441    |  
|                                                                                                       |  |   |            |  
|Total Current Liabilities                                                                              |  |   | 809,372    |  
|                                                                                                       |  |   |            |  
|Total Liabilities                                                                                      |  |   | 809,372    |  
|                                                                                                       |  |   |            |  
|Commitments and contingencies                                                                          |  |   |            |  
|                                                                                                       |  |   |            |  
|Stockholders' (Deficit):                                                                               |  |   |            |  
|Preferred stock, $0.001 par value, 20,000,000 shares authorized;
none issued and outstanding           |  |   |            |  
|                                                                                                       |  |   |           
|                                                                                                       |  |  |           
|Common stock, $0.001 par value, 50,000,000 shares authorized;
26,745,580 shares issued and outstanding |  |   | 26,756     |  
|                                                                                                       |  |  
|Additional paid in capital                                                                             |  |   | 1,930,487  |  
|Deficit accumulated during the development stage                                                       |  |   | (2,762,445 | )
|                                                                                                       |  |   |            |  
|Total Stockholders' (Deficit)                                                                          |  |   | (805,212   | )
|                                                                                                       |  |   |            |  
|Total Liabilities and Stockholders' Equity (Deficit)                                                   |  | $ | 4,160      |  



The accompanying notes are an integral part of the condensed consolidated financial statements



F-2



---





REAL LOGIC, INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF OPERATIONS

|                                                    |  |                                                                |            |                                      |   |                                      |   |   |            |  
|--------------------------------------------------- |  | -------------------------------------------------------------- | ---------- | ------------------------------------ | - | ------------------------------------ | - | - | ---------- | -
|                                                    |  | Cumulative from
Inception
(June 28, 1999)
To December 31,
2007 |            | For the
Year Ended
December 31,
2007 |   | For the
Year Ended
December 31,
2006 |  
|                                                    |  |                                                                |            |                                     
|                                                    |  |                                                                |            |                                     
|                                                    |  |                                                                |            |                                     
|                                                    |  |                                                                |            |                                     
|                                                    |  |                                                                |            |                                      |   |                                      |   |   |            |  
|REVENUES                                            |  | $                                                              |           |                                      | $ |                                     |   | $ |           |  
|                                                    |  |                                                                |            |                                      |   |                                      |   |   |            |  
|OPERATING EXPENSES                                  |  |                                                                | 2,727,185  |                                      |   | 1,773,831                            |   |   | 600,361    |  
|                                                    |  |                                                                |            |                                      |   |                                      |   |   |            |  
|Operating (Loss) Before Interest Expense            |  |                                                                | (2,727,185 | )                                    |   | (1,773,831                           | ) |   | (600,361   | )
|                                                    |  |                                                                |            |                                      |   |                                      |   |   |            |  
|Interest (Expense)                                  |  |                                                                | (35,260    | )                                    |   | (21,217                              | ) |   | (8,016     | )
|                                                    |  |                                                                |            |                                      |   |                                      |   |   |            |  
|(Loss) Before Provision for Income Taxes            |  |                                                                | (2,762,445 | )                                    |   | (1,795,048                           | ) |   | (608,377   | )
|                                                    |  |                                                                |            |                                      |   |                                      |   |   |            |  
|Income taxes                                        |  |                                                                |           |                                      |   |                                     |   |   |           |  
|                                                    |  |                                                                |            |                                      |   |                                      |   |   |            |  
|Net (Loss)                                          |  | $                                                              | (2,762,445 | )                                    | $ | (1,795,048                           | ) | $ | (608,377   | )
|                                                    |  |                                                                |            |                                      |   |                                      |   |   |            |  
|Net (Loss) Per Common Share-Basic
and Diluted       |  |                                                                |            |                                      | $ | (0.07                                | ) | $ | (0.03      | )
|                                                    |  |                                                                |            |                                      |   |                                      |   |   |            |  
|                                                    |  |                                                                |            |                                      |   |                                      |   |   |            |  
|Weighted Average Shares of Common Stock
Outstanding |  |                                                                |            |                                      |   | 25,746,607                           |   |   | 23,077,778 |  





The accompanying notes are an integral part of the condensed consolidated financial statements



F-3



---





REAL LOGIC, INC.

CONSOLIDATED EQUITY SCHEDULE

DECEMBER 31, 2007

|                                      |  |                  |            |              |  |                            |  |                                     |           |                                                  |  |                                |  |  |            |   |  |            |  
|------------------------------------- |  | ---------------- | ---------- | ------------ |  | -------------------------- |  | ----------------------------------- | --------- | ------------------------------------------------ |  | ------------------------------ |  |  | ---------- | - |  | ---------- | -
|Summary                               |  | Number of
Shares |            | Common
Stock |  | Additional
Paid-In
Capital |  | Deferred
Equity-
Based
Compensation |           | Deficit
Accumulated
During The
Development
Stage |  | Total
Stockholders
Deficiency | 
|Balance, December 31, 2005            |  |                  | 22,944,580 |              |  | 22,945                     |  |                                     | 254,638   |                                                  |  |                               |  |  | (359,020   | ) |  | (81,437    | )
|                                      |  |                  |            |              |  |                            |  |                                     |           |                                                  |  |                                |  |  |            |   |  |            |  
|Sale of Common Stock                  |  |                  |            |              |  |                            |  |                                     |           |                                                  |  |                                |  |  |            |   |  |            |  
|Quarter 1                             |  |                  | 100,000    |              |  | 100                        |  |                                     | 24,900    |                                                  |  |                                |  |  |            |   |  | 25,000     |  
|Quarter 2                             |  |                  | 40,000     |              |  | 40                         |  |                                     | 19,960    |                                                  |  |                                |  |  |            |   |  | 20,000     |  
|Quarter 3                             |  |                  | 20,000     |              |  | 20                         |  |                                     | 9,980     |                                                  |  |                                |  |  |            |   |  | 10,000     |  
|Quarter 4                             |  |                  | 261,000    |              |  | 261                        |  |                                     | 130,239   |                                                  |  |                                |  |  |            |   |  | 130,500    |  
|                                      |  |                  |            |              |  |                            |  |                                     |           |                                                  |  |                                |  |  |            |   |  |            |  
|Common Stock Issued
for Services      |  |                  |            |              |  |                            |  |                                     |           |                                                  |  |                                |  |  |            |   |  |            |  
|Quarter 1                             |  |                  | 25,000     |              |  | 25                         |  |                                     | 4,975     |                                                  |  |                                |  |  |            |   |  | 5,000      |  
|Quarter 4                             |  |                  | 250,000    |              |  | 250                        |  |                                     | 124,750   |                                                  |  |                                |  |  |            |   |  | 125,000    |  
|                                      |  |                  |            |              |  |                            |  |                                     |           |                                                  |  |                                |  |  |            |   |  |            |  
|Common Stock Issued for
Purchased R&D |  |                  | 125,000    |              |  | 125                        |  |                                     | 31,125    |                                                  |  |                                |  |  |            |   |  | 31,250     |  
|                                      |  |                  |            |              |  |                            |  |                                     |           |                                                  |  |                                |  |  |            |   |  |            |  
|Net Loss for Year                     |  |                  |            |              |  |                            |  |                                     |           |                                                  |  |                                |  |  | (608,377   | ) |  | (608,377   | )
|                                      |  |                  |            |              |  |                            |  |                                     |           |                                                  |  |                                |  |  |            |   |  |            |  
|Balance December 31, 2006             |  |                  | 23,765,580 |              |  | 23,766                     |  |                                     | 600,567   |                                                  |  |                               |  |  | (967,397   | ) |  | (343,064   | )
|                                      |  |                  |            |              |  |                            |  |                                     |           |                                                  |  |                                |  |  |            |   |  |            |  
|Sale of Common Stock                  |  |                  |            |              |  |                            |  |                                     |           |                                                  |  |                                |  |  |            |   |  |            |  
|Quarter 2                             |  |                  | 225,000    |              |  | 225                        |  |                                     | 112,275   |                                                  |  |                                |  |  |            |   |  | 112,500    |  
|Quarter 3                             |  |                  | 60,000     |              |  | 60                         |  |                                     | 29,940    |                                                  |  |                                |  |  |            |   |  | 30,000     |  
|                                      |  |                  |            |              |  |                            |  |                                     |           |                                                  |  |                                |  |  |            |   |  |            |  
|Common Stock Issued
for Services      |  |                  |            |              |  |                            |  |                                     |           |                                                  |  |                                |  |  |            |   |  |            |  
|Quarter 1                             |  |                  | 1,900,000  |              |  | 1,900                      |  |                                     | 948,100   |                                                  |  |                                |  |  |            |   |  | 950,000    |  
|Quarter 3                             |  |                  | 265,000    |              |  | 265                        |  |                                     | 84,535    |                                                  |  |                                |  |  |            |   |  | 84,800     |  
|Quarter 4                             |  |                  | 505,000    |              |  | 505                        |  |                                     | 147,095   |                                                  |  |                                |  |  |            |   |  | 147,600    |  
|                                      |  |                  |            |              |  |                            |  |                                     |           |                                                  |  |                                |  |  |            |   |  |            |  
|Shares issued to settle A/P           |  |                  |            |              |  |                            |  |                                     |           |                                                  |  |                                |  |  |            |   |  |            |  
|Quarter 3                             |  |                  | 25,000     |              |  | 25                         |  |                                     | 7,975     |                                                  |  |                                |  |  |            |   |  | 8,000      |  
|                                      |  |                  |            |              |  |                            |  |                                     |           |                                                  |  |                                |  |  |            |   |  |            |  
|Net loss for the Period               |  |                  |            |              |  |                            |  |                                     |           |                                                  |  |                                |  |  | (1,795,048 | ) |  | (1,795,048 | )
|                                      |  |                  |            |              |  |                            |  |                                     |           |                                                  |  |                                |  |  |            |   |  |            |  
|Balance December 31, 2007             |  |                  | 26,745,580 |              |  | 26,746                     |  |                                     | 1,930,487 |                                                  |  |                               |  |  | (2,762,445 | ) |  | (805,212   | )
|                                      |  |                  |            |              |  |                            |  |                                     |           |                                                  |  |                                |  |  |            |   |  |            |  







The accompanying notes are an integral part of the condensed consolidated financial statements



F-4



---





REAL LOGIC, INC.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                             |                                                                |   |                                       |   |                                      |             |   |   |          |  
|---------------------------------------------------------------------------- | -------------------------------------------------------------- | - | ------------------------------------- | - | ------------------------------------ | ----------- | - | - | -------- | -
|                                                                             | Cumulative From
Inception
(June 28, 1999)
To December 31,
2007 |   | For the 
Year Ended
December 31,
2007 |   | For the
Year Ended
December 31,
2006 |            
|                                                                             |                                                               
|                                                                             |                                                               
|CASH FLOWS FROM OPERATING ACTIVITIES:                                        |                                                                |   |                                       |   |                                      |             |   |   |          |  
|Net (loss)                                                                   |                                                                | $ | (2,762,445                            | ) | $                                    | (1,795,048) |   | $ | (608,377 | )
|Adjustments to reconcile net loss to net cash used in 
operating activities: |                                                                |   |                                       |   |                                      |             |   |   |          |  
|Depreciation                                                                 |                                                                |   | 625                                   |   |                                      | 577         |   |   | 48       |  
|Stock based compensation                                                     |                                                                |   | 1,315,700                             |   |                                      | 1,182,400   |   |   | 130,000  |  
|Stock and note issued for purchased R & D                                    |                                                                |   | 161,250                               |   |                                      |            |   |   | 161,250  |  
|Accumulated loss of acquisition                                              |                                                                |   | 8,711                                 |   |                                      |            |   |   |         |  
|Changes in operating assets and liabilities:                                 |                                                                |   |                                       |   |                                      |             |   |   |          |  
|Other assets - security deposits                                             |                                                                |   | (1,900                                | ) |                                      |            |   |   |         |  
|Accounts payable and accrued expenses                                        |                                                                |   | 124,130                               |   |                                      | 77,143      |   |   | 14,625   |  
|Accounts payable-related parties                                             |                                                                |   | 320,642                               |   |                                      | 241,360     |   |   | 73,255   |  
|Net cash used in operating activities                                        |                                                                |   | (833,287                              | ) |                                      | (293,568    | ) |   | (229,199 | )
|                                                                             |                                                                |   |                                       |   |                                      |             |   |   |          |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                        |                                                                |   |                                       |   |                                      |             |   |   |          |  
|Purchases of property and equipment                                          |                                                                |   | (2,885                                | ) |                                      |            |   |   | (2,885   | )
|Net cash used in investing activities                                        |                                                                |   | (2,885                                | ) |                                      |            |   |   | (2,885   | )
|                                                                             |                                                                |   |                                       |   |                                      |             |   |   |          |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                        |                                                                |   |                                       |   |                                      |             |   |   |          |  
|Bank overdraft                                                               |                                                                |   | 2,666                                 |   |                                      | 2,666       |   |   |         |  
|Loans payable proceeds- related parties                                      |                                                                |   | 276,372                               |   |                                      | 146,172     |   |   | 26,940   |  
|Loans payable repayments- related parties                                    |                                                                |   | (132,689                              | ) |                                      | (77,916     | ) |   | (8,000   | )
|Proceeds from loans payable                                                  |                                                                |   | 77,500                                |   |                                      | 77,500      |   |   |         |  
|Line of credit - net                                                         |                                                                |   | 25,275                                |   |                                      | 474         |   |   | 24,801   |  
|Proceeds from sale of common stock                                           |                                                                |   | 587,048                               |   |                                      | 142,500     |   |   | 185,500  |  
|Net cash provided by financing activities                                    |                                                                |   | 836,172                               |   |                                      | 291,396     |   |   | 229,241  |  
|                                                                             |                                                                |   |                                       |   |                                      |             |   |   |          |  
|Net increase (decrease) in cash                                              |                                                                |   |                                      |   |                                      | (2,172      | ) |   | (2,843   | )
|                                                                             |                                                                |   |                                       |   |                                      |             |   |   |          |  
|Cash and equivalents, beginning of period                                    |                                                                |   |                                      |   |                                      | 2,172       |   |   | 5,015    |  
|                                                                             |                                                                |   |                                       |   |                                      |             |   |   |          |  
|Cash and equivalents, end of period                                          |                                                                | $ |                                      |   | $                                    |            |   | $ | 2,172    |  
|                                                                             |                                                                |   |                                       |   |                                      |             |   |   |          |  
|SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:                            |                                                                |   |                                       |   |                                      |             |   |   |          |  
|Payment of taxes                                                             |                                                                | $ |                                      |   | $                                    |            |   | $ |         |  
|Payment of interest                                                          |                                                                | $ | 8,853                                 |   | $                                    | 7,332       |   | $ | 1,521    |  
|                                                                             |                                                                |   |                                       |   |                                      |             |   |   |          |  
|SUPPLEMENTAL DISCLOSURE OF NON-CASH                                          |                                                                |   |                                       |   |                                      |             |   |   |          |  
|INVESTING AND FINANCING ACTIVITIES:                                          |                                                                |   |                                       |   |                                      |             |   |   |          |  
|Stock Issued for Services                                                    |                                                                | $ | 1,315,700                             |   | $                                    | 1,182,400   |   | $ | 130,000  |  
|Stock Issued for Acquisition of Timber Property, Inc.                        |                                                                | $ | 8,711                                 |   | $                                    |            |   | $ |         |  
|Stock Issued for Purchased R & D                                             |                                                                | $ | 31,250                                |   | $                                    |            |   | $ | 31,250   |  





The accompanying notes are an integral part of the condensed consolidated financial statements



F-5



---





REAL LOGIC, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2007

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s has one subsidiary, Duncan Motor Company, Inc., a Florida corporation. All intercompany transactions have been eliminated in consolidation. On October 29, 2002, the Company had changed its corporate name from Xelos, Inc. to Real Logic Inc.

Basis of Accounting

The Company's policy is to prepare its consolidated financial statements using the accrual basis of accounting in accordance with generally accepted accounting principles.  The Company has elected December 31 as its 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 expenses during the reporting periods. Actual results could differ from those estimates.

Cash and Cash Equivalents

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. Business operations are limited to daily office operations, staffs completion of final stage testing for the launch of our prototype Alternative Transportation Vehicle, and completion of our marketing plan in order to initiate sales of our existing Duncan XTV.   The accumulated deficit during its development stage is $2,762,445.

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 (loss) 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, 2007, and 2006 there are no outstanding stock options or stock warrants that would have affected the computation.



F-6



---

REAL LOGIC, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2007



NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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 notes and loans payable approximate their fair market value based on the short-term maturity of these instruments.

Property and Equipment

Property and equipment is stated at cost. Depreciation and amortization are 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.

Recent Accounting Pronouncements



NOTE 2 - GOING CONCERN

As shown in the accompanying financial statements, the Company incurred a net loss for the year ended December 31, 2007 of $1,795,048 and cumulatively since inception for the period June 28, 1999 to December 31, 2007 of $2,762,445 and has a working capital deficiency of $809,372 at December 31, 2007. There is no guarantee whether the Company will be able to generate enough revenue and/or raise capital to support these operations. This raises substantial doubt about the Company's ability to continue as a going concern.

The Company is currently raising working capital to continue and expand its operations via a private placement of common stock. The Company has raised $587,048 from inception on June 28, 1999 through December 31, 2007



NOTE 3 - PROPERTY AND EQUIPMENT

At December 31, 2007, property and equipment consisted of the following:



|                              |  |  |             |  |   |       |  
|----------------------------- |  |  | ----------- |  | - | ----- | -
|                              |  |  | Useful Life |  |   |       |  
|                              |  |  | (Years)     |  |   |       |  
|Computer equipment            |  |  | 5           |  | $ | 2,885 |  
|Less accumulated depreciation |  |  |             |  |   | (625  | )
|                              |  |  |             |  | $ | 2,260 |  



Depreciation expense was $577 and $48 for the years ended December 31, 2007 and 2006, respectively.



NOTE 4  NOTE PAYABLE

The Company has a $130,000 promissory note payable outstanding pursuant to its purchase of research and development (See Note 7). This note has no maturity date or stated interest rate and is to be repaid as funds become available.





F-7



---

REAL LOGIC, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2007



NOTE 5 - LOANS PAYABLE

During 2007, the Company received an aggregate of $77,500 of loans from individuals for working capital purposes.  The loans payable are due on demand, bear interest at 7%, and are unsecured.  Interest expense on the loans payable was $2,525 for the year ended December 31, 2007 and is included in accounts payable and accrued expenses.

NOTE 6  STOCKHOLDERS DEFICIENCY

On August 29, 2002, the par value of common stock was changed to $.001. During 2002, the Company sold 8,846,000 shares of common stock at par value for $8,846 and 600 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.

During 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.

In January 2006, the Company issued 100,000 shares of its common stock to a private investor for $25,000, and 20,000 shares of its common stock to a private investor for $5,000.  In April 2006, the Company issued 25,000 shares of its common stock for consulting services valued at $5,000, and 40,000 shares of its common stock for $20,000.  In June 2006, the Company issued 125,000 shares of its common stock (valued at $31,250) for purchased R&D.  In September 2006, the Company issued 20,000 shares of its common stock to a private investor for $10,000. In October and November 2006, the Company issued 261,000 shares of its common stock to private investors for $130,500. In December 2006, the Company issued 250,000 shares for consulting services valued at $125,000.

During 2007, the Company issued an aggregate of 285,000 common shares in exchange for cash proceeds of $142,500.  During 2007, the Company issued an aggregate of 2,670,000 common shares in exchange for services rendered having a fair value of $1,182,400.  During 2007, the Company issued 25,000 common shares to settle $8,000 of accounts payable.

NOTE 7  ACQUISITION & PURCHASED R&D

On June 7, 2006, the Company acquired a sixty percentage equity position in a new alternative transportation vehicle with an Asset Purchase Agreement pursuant to which the Company acquired certain in-process research and development. 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 assigned to the Company certain research and development with a value of $130,000 in exchange for a promissory note of $130,000. Additionally, the Company issued 125,000 shares of its common stock to the two individuals.

The research and development was expensed in accordance with SFAS No. 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 (or $31,250) based upon the most recent sale of unregistered common stock, at that time.

The Company has not booked any goodwill for the research and development, and as such treated the goodwill as having been impaired in accordance with SFAS No. 142, Goodwill and Other Intangible Assets.



F-8



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REAL LOGIC, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2007



NOTE 8  COMMITMENTS AND CONTINGENCIES

Line of Credit

At December 31, 2007, the Company had an outstanding balance due of $25,275 against a $25,000 revolving line of credit with a bank at an annual interest rate of 29.99%. This line was guaranteed by the Chief Executive Officer and a related party.

Operating Lease

The Company rents office space in Palm Beach, Florida, under a lease that commenced in April 1, 2007 and expires in March 31, 2010. Rent expense was $30,415 and $25,880 for the years ended December 31, 2007 and 2006, respectively.  The following is a schedule by years of future minimum rental payments required under the operating lease that has an initial or remaining noncancelable lease term in excess of one year as of December 31, 2007:2008 - $29,589; 2009 - $31,068; 2010 - $8,155.

NOTE 9  RELATED PARTY TRANSACTIONS

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses, related parties includes accounts payable of $224,600, accrued expenses of $30,400 and interest accrued on loans payable of $11,360.

Loans Payable

Loans payable, related parties includes loans for working capital purposes in the amount of $191,441, of which $189,441 bears 7% interest and $2,000 is non-interest bearing. Interest expense on the loans payable was $11,360 for the year ended December 31, 2007 and is included in accounts payable and accrued expenses. Loans payable, related parties also includes $180,000 of accrued expense to Tolley Investments, Inc., an affiliate of Bradford L. Tolley, for professional investment banking services.

NOTE 10 - 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 ended
December 31, | 
|                                  |  |  | 2007                    |  |  | 2006 | 
|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, 2007 of approximately $1,580,000 which is offset by a 100% valuation allowance due to the uncertainty surrounding the ultimate realization of these assets. The loss carryforwards expires at various dates through 2027.





F-9



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REAL LOGIC, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2007



NOTE 11 - OPERATING EXPENSES

Operating expenses for the years ended December 31, 2007 and 2006 were as follows:

|                                 |  |      |           |      |   |         | 
|-------------------------------- |  | ---- | --------- | ---- | - | ------- | 
|                                 |  | 2007 |           | 2006 |  
|Share-based compensation         |  | $    | 1,182,400 |      | $ |        | 
|Management Fee                   |  |      | 180,000   |      |   | 120,000 | 
|Salaries                         |  |      | 87,500    |      |   |        | 
|Professional fees                |  |      | 77,035    |      |   | 50,652  | 
|Purchased R&D                    |  |      |          |      |   | 161,250 | 
|Other general and administrative |  |      | 246,896   |      |   | 268,459 | 
|Total operating expenses         |  | $    | 1,773,831 |      | $ | 600,361 | 



NOTE 12 - SUBSEQUENT EVENTS

During the First Quarter 2008, the Company issued an aggregate of 1,000,000 common shares in exchange for cash proceeds of $100,000. During the First Quarter 2008, the Company issued an aggregate of  580,000 common shares in exchange for services rendered having a fair value of $71,100 . During the First Quarter, 2008, the Company issued 70,000 common shares for services rendered that were incurred as of year end.

NOTE 13 - RECENT ACCOUNTING PRONOUNCMENTS

In May 2007, the FASB issued  FIN 48-1,Definition of Settlement in FASB Interpretation No. 48  (the FSP), which provides guidance for determining  whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits. Under the FSP, a tax position could be effectively settled on completion of examination by a taxing authority if the entity does not intend to appeal or litigate the result and it is remote that the taxing authority would examine or re-examine the tax position. The Company does not expect that this interpretation will have a material impact on its financial statements.

In December 2007, the FASB issued SFAS No. 141(R),Business Combinations, which replaces SFAS No. 141, Business Combinations,  which, establishes for how an acquiring company recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed (including intangibles) and any non-controlling interests in the acquired entity. SFAS No. 141(R) applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The Company does not expect that this interpretation will have a material impact on its financial statements

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51.  SFAS No. 160 amends ARB 51 to establish accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. It also amends certain of ARB 51s consolidation procedures for consistency with the requirements of SFAS No. 141(R). SFAS No. 160 is effective for fiscal years, beginning December 15, 2008. . The Company does not expect that this interpretation will have a material impact on its financial statements.





F-10