---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended December 31, 2010

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

For the transition period from [ ] to [ ]

Commission file number 333-139045

ECOLOGIC TRANSPORTATION,
INC.(Exact name of registrant as specified in its
charter)

|Nevada                                                     | 26-1875304                          
|---------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or           | (I.R.S. Employer Identification No.)
|organization)                                              |                                     
|                                                           |                                     
|1327 Ocean Avenue, Suite B, Santa Monica,
      California | 90401                               
|(Address of principal executive offices)                   | (Zip Code)                          
|                                                           |                                     
|Registrant's telephone number, including area code:        | 310.899.3900                        

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

|Title of Each Class | Name of Each Exchange On Which Registered
|------------------- | -----------------------------------------
|N/A                 | N/A                                      

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

N/A(Title of class)

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

Indicate by check mark if the registrant is not required to
file reports pursuant to Section 13 or Section 15(d) of the Act 
Yes [ ] No
[X]

---

Indicate by check mark whether the registrant: (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports) and (2) has been subject
to such filing requirements for the last 90 days. 
Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Website, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registration statement was required to submit and post
such files). Yes [ ] No [X]

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrant's
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K.

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See definition of large accelerated filer, accelerated
filer and smaller reporting company in Rule 12b-2 of the Exchange Act.

|Large accelerated filer [ ] | Accelerated filer [ ]        
|--------------------------- | -----------------------------
|Non-accelerated filer [ ]   | Smaller reporting company [X]

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

The aggregate market value of Common Stock held by non-affiliates of the Registrant as of June 30, 2010  (was $6,186,074 based on a closing price of $0.45 for the Common Stock on June 29 2010 the last business day of the registrant’s most recently completed second fiscal quarter. For purposes of this computation, all executive officers and directors have been deemed to be affiliates. Such determination should not be deemed to be an admission that such executive officers and directors are, in fact, affiliates of the Registrant.

Indicate the number of shares outstanding of each of the
  registrants classes of common stock as of the latest practicable date.

23,812,824 Common Shares issued and outstanding as of March 31, 2011.

DOCUMENTS INCORPORATED BY REFERENCE

None.

---

|TABLE OF CONTENTS
|-----------------
|                 
|Item 1.          
|                 
|Item 1A.         
|                 
|Item 2.          
|                 
|Item 3.          
|                 
|Item 4.          
|                 
|Item 5.          
|                 
|Item 6.          
|                 
|Item 7.          
|                 
|Item 7A.         
|                 
|Item 8.          
|                 
|Item 9.          
|                 
|Item 9A.         
|                 
|Item 9B.         
|                 
|Item 10.         
|                 
|Item 11.         
|                 
|Item 12.         
|                 
|Item 13.         
|                 
|Item 14.         
|                 
|Item 15.         

3

---



PART I

Item 1. Business

This annual report contains forward-looking statements. These
statements relate to future events or our future financial performance. In some
cases, you can identify forward-looking statements by terminology such as may,
should, expects, plans, anticipates, believes, estimates,
predicts, potential or continue or negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, including the risks in the
section entitled Risk Factors, that may cause our or our industrys actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Except as required by
applicable law, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform these
statements to actual results.

Our financial statements are stated in United States Dollars
(US$) and are prepared in accordance with United States Generally Accepted
Accounting Principles.

In this annual report, unless otherwise specified, all dollar
amounts are expressed in United States Dollars and all references to common
shares refer to the common shares in our capital stock.

As used in this annual report, the terms "we", "us", "our" and
"Ecologic" mean Ecologic Transportation, Inc. and our wholly-owned subsidiaries,
Ecological Products, Inc., Ecologic Car Rentals, Inc. and Ecologic Systems,
Inc., unless otherwise indicated.

Corporate Overview

The address of our principal executive office is 1327 Ocean
Avenue, Suite B, Santa Monica, California, 90401. Our telephone number is
310.899.3900.

Our common stock is quoted on the OTC Bulletin Board under the
symbol EGCT.

Corporate History

We were incorporated in the State of Nevada on September 30,
  2005 under the name Heritage Explorations Inc. On June 20, 2008, we merged with
  our wholly owned subsidiary and changed our name to USR Technology, Inc., and on
  June 26, 2008 our shares began trading under the symbol USRT. We were engaged
  primarily in the provision of drilling services internationally.

On July 2, 2009, USR's wholly owned subsidiary Ecological
  Acquisition Corp. was merged into Ecologic Sciences, Inc. (formerly, Ecologic
  Transportation, Inc.) with Ecologic Sciences, Inc. being the sole surviving
  entity under the name Ecologic Sciences, Inc. and our company being the sole
  shareholder of the surviving entity. In connection with the closing of the
  merger, we issued an aggregate of 17,559,486 restricted shares of our common
  stock representing approximately 75.85% of the issued and outstanding shares of
  our company to the former shareholders of Ecologic Sciences, Inc.

Following the completion of the acquisition of Ecologic
  Sciences, Inc., we are a development stage company that plans to be engaged in
  the rental of environmentally friendly hybrid electric and low-emission vehicles
  to the public.

Pursuant to the terms of the Agreement and Plan of Merger, as
  amended:

4

---

- effective June 11 2009, we effected a two (2) old for one (1) new reverse
  stock split of our issued and outstanding common stock. As a result, our
  authorized capital decreased from 150,000,000 shares of common stock with a
  par value of $0.001 to 75,000,000 shares of common stock with a par value of
  $0.001 and our issued and outstanding shares decreased from 15,020,017 shares
  of common stock to 7,510,000 shares of common stock;
- effective June 11, 2009, we changed our name from USR Technology, Inc.
  to Ecologic Transportation, Inc., by way of a merger with our wholly owned
  subsidiary Ecologic Transportation, Inc., which was formed solely for the
  change of name. The name change and forward stock split became effective with
  the Over-the-Counter Bulletin Board at the opening of trading on June 11, 2009
  under the stock symbol EGCT. Our CUSIP number is 27888B 105;
- certain of our pre-closing stockholders canceled 2,000,002
  pre-consolidated shares of our common stock for no consideration for the
  purpose of making our capitalization more attractive to future equity
  investors; and
- certain affiliates of our company cancelled an aggregate of $108,500 of
  debt at no consideration.

On July 2, 2009 and in connection with the closing of the
agreement and plan of merger, there was a change in control of our company that
resulted from the issuance of 17,559,486 shares of our common stock to the
former shareholders of Ecologic Sciences, Inc.

The issuance of the 17,559,486 common shares to the former
shareholders of Ecologic Sciences, Inc. was deemed to be a reverse acquisition
for accounting purposes. Ecologic Sciences, Inc., the acquired entity, is
regarded as the predecessor entity as of July 2, 2009. Starting with the
periodic report for the quarter in which the acquisition was consummated, the
Company has filed annual and quarterly reports based on the December 31st fiscal
year end of Ecologic Sciences, Inc.

On September 24, 2009, we, through our wholly owned subsidiary
  Ecologic Products, Inc., entered into a service agreement with Park N Fly Inc.,
  a national off-airport parking company. Pursuant to the terms of the service
  agreement, we have agreed to provide car wash cleaning services using our 100%
  organic cleaning products, known as Ecologic Shine TM,for a period
  of three years at certain of Park N Fly Inc.s locations. We opened in Atlanta,
  Georgia on October 19, 2009. We opened in San Diego, California on November 16,
  2009 and opened in Los Angeles, California in December 2009.

On November 10, 2009, in accordance with the change in
  direction of our company, we rescinded our agreements with Shuayb K. Al
  Suleimany and Euroslot S.A.S.

5

---

Our Current Business

Until April 2009, we were a company focused on the drilling
services sector of the oil and gas industry. As of the closing date of the
agreement and plan of merger on July 2, 2009, we became a development stage
company in the business of environmental transportation. We are structured with
three operating units. Our primary operation is the car rental division which
will focus on an environmental car rental operation.

We have two subsidiaries in addition to Ecologic Car Rentals
Inc.:

|1. | Ecologic Products, Inc., a Nevada Corporation 
|-- | ----------------------------------------------
|   |                                               
|2. | Ecologic Systems, Inc., a Nevada
  Corporation

These subsidiaries were created to provide an infrastructure
and support for Ecologic Car Rentals. Our car rental business and our systems
business intends to provide distribution channels for certain environmental
products and both generate certain internal product requirements in order to
allow us to be green throughout our operation. Initially our business plan
calls for the products to be focused on transportation and its ancillary
markets.

Car Rentals

Currently, we intend to rent only environmentally friendly
vehicles in the compact, full-size and sport-utility vehicle classes. We intend
to rent cars on daily, multi-day, weekly and monthly basis. We expect that our
primary source of revenue will consist of base time and mileage car rental fees which can include daily rates including mileage. We
expect to also charge an additional fee for one-way rentals to and from specific
locations. In addition to rental fees, we intend to sell other optional products
to our customers, such as collision or loss damage waivers, supplemental
liability insurance, personal effects coverage and gasoline.

Our customers will make rental reservations via our website,
  www.ecologictransportation.com, at our proposed partners websites, at the
  rental counter at any of our proposed locations, by phone, through several
  online travel websites that we intend to partner with or through a corporate
  account program in place with their employers.

We have held discussions with auto manufacturers such as
  Volkswagen, Toyota and Nissan about coupling green marketing initiatives with
  fleet sale programs. In addition, we have held discussions with a U.S. based
  electric automobile manufacturer regarding possible acquisition of their new
  line of electric vehicles.

We plan to acquire existing profitable independent car rental
  operations on a multi-regional basis and convert their operations to an Ecologic
  platform. We have identified independent car rental operations that will provide
  a multi-regional presence and can be used as a platform to become the only large
  green independent car rental operation in the U.S.

We will incrementally replace the fleets with our environmental
  vehicles over a 12  24 month period. Our strategy is to co-brand with the
  acquisitions for a limited period of time and complete the rebranding to green
  outlets as Ecologic Car Rentals.

Ecologic Products

Our car rental business and our systems business intend to
  provide distribution channels for certain environmental products and both
  generate certain internal product requirements in order to allow us to be
  green throughout our operation. Initially our business plan calls for the
  products to be focused on transportation and its ancillary markets.

In anticipation of our first rental car location and our need
  for environmentally friendly car cleaning (one of the most important aspects of
  a rental operation), we developed Ecologic Shine, a proprietary waterless car

6

---

cleaning process that delivers cleaning comparable to normal
washing without using any harmful chemicals.

We have launched Ecologic Shine in collaboration with Park N
Fly, the airport parking chain with prominent locations in 15 airport markets,
and in this regard Park N Fly has launched an initial test market and we
currently have operations in Atlanta, San Diego and Los Angeles with encouraging
results, however no new locations have been established as at December 31, 2010.

The commercialization of the Ecologic Shine products and
services are:

- Good for the environment
- Good for the customer
- Good for the vehicle
- Good for the bottom line

Ecologic Systems

We intend to develop and manage the greening of gas stations
  along with retrofitting them with alternative energy options and solutions. To
  build this infrastructure, we intend to provide turnkey management,
  installation, and integration of equipment procurement, equipment installation,
  contracting, fuel, and regulatory tax incentive and grant subsidization
  proposals.

Sales, Marketing, and Advertising

Our primary marketing objective will be to convey to customers
  that we are the only transportation company committed to the environment. We
  will seek to appeal to eco-conscious customers by stressing the interrelated
  environmental and economic benefits of renting our proposed environmentally
  friendly cars, using our proposed infrastructure, and purchasing our proposed
  environmental products.

We intend to:

- Exploit the differentiation of Ecologic Car Rentals from other car rental
    company brands.
- Use direct sales and education to state and municipal government agencies,
    universities, and corporations committed to environmental efforts.
- Capitalize on public relations opportunities available to an all
    environmental transportation company.
- Employ strategic use of electronic and internet distribution employing
    state of the art technology to target retail customers looking for green
    transportation including direct marketing and affinity programs.

7

---

Ecologic created www.ecologicradio.comas a way of expanding the communication of the brands message.

- Ecologic Radio is headed by talk radio veteran Rich Keppler. Rich is a
  veteran of 15 years of talk radio in Philadelphia. He is an online radio
  pioneer and co-founder of Boombox Radio, Voice America & Renegade Talk.
- Talk Show:Ecologic Talk Radio (Eco Talk) is a call in online talk
  radio network. Eco Talks goal is to become a 24 hour 7 day a week online
  broadcaster.
- Host: Rich has built a career developing content and has an extensive
    network of potential hosts to become members of Eco talk.
- Content: Green Auto, Green Building, Green Fuels, Green Lifestyle, Green
    Investments & Products.
- Distribution:Internet Domestic & International.

Other than as disclosed above, currently, our sales, marketing,
  and advertising efforts are minimal because of our size and limited financial
  resources.

Our Business Strategy

We believe that growth in demand for environmentally friendly
  cars and the anticipated increase in production of new models of these vehicles
  by major automakers have created an opportunity for an environmentally friendly
  transportation company such as ours. We intend to capitalize on our position as
  a prime mover in this market by executing a comprehensive business strategy.

Our business model supports growth while holding true to our
  planet-friendly mission. Our first objective is to purchase our fleet of rental
  cars and to secure our proposed rental locations. We expect that as costs of
  gasoline and prices continue to rise, demand for our environmentally-friendly,
  higher mile per gallon proposed fleet will increase. Our intended business
  operations and purchase of our fleet will be contingent on our company receiving
  financing.

This growing demand will allow us to add to our proposed fleet
  and additional rental locations. We intend to market our fleet to state
  governments, local governments and environmentally conscious organizations. Our
  business will continue to expand as more manufacturers make more hybrid,
  electric, CNG and other environmental vehicles. We will be able to expand our
  product offering, capitalizing on our position as the prime mover in the market.

We initially intend to have our rental locations located at
  airports on the west coast of the United States. Our strategy will be a
  multi-pronged approach. We intend to:

|1. | identify acquisition targets for roll up;                                                           
|-- | ----------------------------------------------------------------------------------------------------
|   |                                                                                                     
|2. | add business to expand acquisitions while greening the
      acquisitions; and                    
|   |                                                                                                     
|3. | develop new facilities that will also be a platform for
      Ecologic Systems and Ecologic Products

8

---

The execution of our business strategy will be contingent upon
and require significant financing. There can be no assurance that such financing
will become available or if it does, that it will be offered on favorable terms
to us. Our ultimate goal is to achieve a national presence in the car rental
industry.

Facilities

Our corporate headquarters are located at 1327 Ocean Avenue Suite B, Santa Monica, California 90401.

Employees

As of December 31, 2010 we had 35 full and part-time employees in addition to our directors and executive officers. Currently, we have 34 full and part-time employees. Over the next twelve months, we intend to significantly increase the number of
  our employees.

Principal Suppliers

KO Manufacturing, Inc. Ecologic ShineTM products are manufactured exclusively for Ecologic ShineTM by KO Manufacturing. KO Manufacturing was founded in 1976 and is headquartered in Springfield, MO.

Competition

For waterless car cleaning services, there are three primary competitors:

ProntoWashis a company based in Argentina with franchises in the United States. All product and delivery systems are manufactured in Argentina, making it costly to import to the U.S.

GeoWashis a 100% franchised company with global franchisees.

EcoWashis a 100% franchised company owned and operated in Australia with a third party product supplier.

Dependence on a Few or Major Customers

The company is currently dependent upon a major customer. The major customer for the car cleaning services is Park ‘N Fly, an off airport parking company. In 2010, 100% of sales were attributable to Park 'N Fly. At December 31, 2010, 100% of
  accounts receivable were due from Park 'N Fly.

Government Regulation

Our operations will be subject to various federal, state and local laws, regulations, and controls including the leasing and sale of used cars, licensing, charge card operations, reservation policies, privacy and personal data protection,
  environmental protection, labor matters, insurance, prices, and advertising. We believe we are in compliance with any such regulations affecting our business.

Intellectual Property

We have an agreement with KO Manufacturing for our Ecologic
Shine products for the exclusive use of the Ecologic Shine waterless car wash
products.

The Company has filed a trademark application with the US
  office of Trademarks to trademark the name Ecologic Transportation, Inc. and
  the following logo for our company:

9

---



On August 17, 2010 the United States Patent and Trademark
  Office registered a Service Mark consisting of the words Ecologic Shine as
  illustrated below.

Seasonality

There is seasonality only in the car rental sector of our
  company. The car rental industry tends to be seasonal. The third quarter, during
  the peak summer months of July and August, has traditionally been the strongest
  quarter of the year in terms of numbers of rentals and rental rates.

Research and Development

Our company has not spent any funds on research and development
  since inception (December 16, 2008).

REPORTS TO SECURITY HOLDERS

We are not required to deliver an annual report to our
stockholders, but will voluntarily send an annual report, together with our
annual audited financial statements upon request. We are required to file
annual, quarterly and current reports, proxy statements, and other information
with the Securities and Exchange Commission. Our Securities and Exchange
Commission filings are available to the public over the Internet at the SEC's
website at http://www.sec.gov.

The public may read and copy any materials filed by us with the
  SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington DC 20549.
  The public may obtain information on the operation of the Public Reference Room
  by calling the SEC at 1-800-SEC-0330. We are an electronic filer. The SEC
  maintains an Internet site that contains reports, proxy and information
  statements, and other information regarding issuers that file electronically
  with the SEC. The Internet address of the site is http://www.sec.gov.

Item 1A. Risk Factors

Much of the information included in this annual report includes
  or is based upon estimates, projections or other "forward looking statements".
  Such forward looking statements include any projections or estimates made by us
  and our management in connection with our business operations. While these
  forward-looking statements, and any assumptions upon which they are based, are
  made in good faith and reflect our current judgment regarding the direction of
  our business, actual results will almost always vary, sometimes materially, from
  any estimates, predictions, projections, assumptions or other future performance
  suggested herein.

Such estimates, projections or other "forward looking
  statements" involve various risks and uncertainties as outlined below. We
  caution the reader that important factors in some cases have affected and, in
  the future, could materially affect actual results and cause actual results to
  differ materially from the results expressed in any such estimates, projections
  or other "forward looking statements".

Our common shares are considered speculative as our business is
  still in an early growth stage of its development. Prospective investors should
  consider carefully the risk factors set out below.

10

---

Risks Related to our Business

We have a limited operating history, and it is difficult to
  evaluate our financial performance and prospects. There is no assurance that we
  will achieve profitability or that we will not discover problems with our
  business model.

We have a limited operating history. As such, it is difficult
  to evaluate our future prospects and performance, and therefore we cannot ensure
  that we will operate profitably in the future.

We have limited funds available for operating expenses. If
we do not obtain funds when needed, we will have to cease our operations.

Currently, we have limited operating capital. As of December
  31, 2010, our cash available was $21,579. In the foreseeable future, we expect
  to incur significant expenses when developing our business. We may be unable to
  locate sources of capital or may find that capital is not available on terms
  that are acceptable to us to fund our additional expenses. There is the
  possibility that we will run out of funds, and this may affect our operations
  and thus our profitability. If we cannot obtain funds when needed, we may have
  to cease our operations.

Our business plan may not be realized. If our business plan
  proves to be unsuccessful, our business may fail and you may lose your entire
  investment.

Our operations are subject to all of the risks inherent in the
  establishment of a new business enterprise, including inadequate working capital
  and a limited operating history. The likelihood of our success must be
  considered in light of the problems, expenses, complications and delays
  frequently encountered in connection with the development of a new business.
  Unanticipated events may occur that could affect the actual results achieved
  during the forecast periods. Consequently, the actual results of operations
  during the forecast periods will vary from the forecasts, and such variations
  may be material. In addition, the degree of uncertainty increases with each
  successive year presented. There can be no assurance that we will succeed in the
  anticipated operation of our business plan. If our business plan proves to be
  unsuccessful, our business may fail and you may lose your entire investment.

We will need additional financing to expand our business,
  and to implement our business plan. Such financing may not be available on
  favorable terms, if at all.

If we need funds and cannot raise them on acceptable terms, we
  may not be able to:

- execute our business plan;
- acquire or lease our proposed fleet of rental cars;
- take advantage of future opportunities, including synergistic
    acquisitions;
- respond to customers, competitors or violators of our proprietary and
    contractual rights; or
- remain in operation.

We will have to raise substantial additional capital if we wish
  to execute our business plan. There can be no assurance that debt or equity
  financing, or cash generated by operations, will be available or sufficient to
  meet our requirements. Additional funding may not be available under favorable
  terms, if at all.

We may be unable to predict accurately the timing and amount of
  our capital requirements. We have historically financed our activities through
  the sale of our equity securities, loans and from lines of credit. We may be
  required to raise additional funds through public or private financing, bank
  loans, collaborative relationships or other arrangements. It is possible that
  banks, venture capitalists and other investors may perceive our capital
  structure or operating history as too great a risk to bear. As a result, additional funding may not be
available at attractive terms, or at all. If we cannot obtain additional capital
when needed, we may be forced to agree to unattractive financing terms, change
our method of operations, curtail operations significantly, obtain funds through
entering into arrangements with collaborative partners or others, or issue

11

---

additional securities. Any future issuances of our securities
may result in substantial dilution to existing stockholders.

Our success will depend on our newly assembled senior
  management team.

Our success will be largely dependent upon the performance of
  our senior management team. Investors must rely on the expertise and judgment of
  senior management and other key personnel. The failure to attract and retain
  individuals with the skill and experience necessary to execute our business plan
  could have a materially adverse impact upon our prospects. We currently do not
  have any key man insurance policies and have no current plans to obtain any;
  therefore, there is a risk that the death or departure of any director, member
  of management, or any key employee could have a material adverse effect on
  operations.

We face significant competition in the car rental industry.
  There can be no assurance that we will be able to compete successfully against
  our competitors.

The car rental business is highly competitive. We compete
  against a number of established rental car companies with greater marketing and
  financial capabilities. Our market specialization is the rental of hybrid
  electric and low-emissions cars. Although we believe that we will be the first
  rental company featuring predominately environmentally friendly cars, we may
  face difficulty competing against other car rental companies should they devote
  significant resources to such cars. There can be no assurance that one or more
  competitors may not initiate a rental business similar to ours, thus
  compromising the differentiating factor for us. Increased competition in the
  rental car industry may result in reduced operating margins, loss of market
  share and a diminished brand franchise. There can be no assurance that we will
  be able to compete successfully against our competitors, and competitive
  pressures faced by us may have a material adverse effect on our business,
  prospects, financial condition and results of operations.

We are dependent on fleet financing for acquiring cars. Our
  failure to obtain financing for the acquisition of cars could have a material
  adverse effect on our business and prospects.

Our ability to purchase and finance our proposed fleet of
  rental vehicles will depend on the calculation and assignment of risk for the
  resale value of the vehicles. Despite our plans for securing the resale value,
  lending companies may not be enticed to finance the cars. There can be no
  assurance that the financing required to purchase and deploy cars will be
  available to us in order to meet business projections. Our failure to obtain
  financing for the acquisition of cars could have a material adverse effect on
  our business and prospects.

We may not maintain insurance sufficient to cover the full
extent of our liabilities. The payment of such uninsured liabilities would
reduce the funds available to us.

We intend to maintain various forms of insurance. However, such
  insurance has limitations on liability that may not be sufficient to cover the
  full extent of such liabilities. Also, such risks may not, in all circumstances,
  be insurable or, in certain circumstances, we may elect not to obtain insurance
  to deal with specific risks due to the high premiums associated with such
  insurance or other reasons. The payment of such uninsured liabilities would
  reduce the funds available to us. The occurrence of a significant event that we
  are not fully insured against, or the insolvency of the insurer of such event,
  could have a material adverse effect on our financial position, results of
  operations or prospects.

We may not be able to obtain all the necessary licenses and
  permits required to carry on our business activities.

Our operations may require licenses and permits from various
  governmental authorities. There can be no assurance that we will be able to
  obtain all necessary licenses and permits that may be required to carry required
  business activities.

12

---

We may not be able to maintain the information technology
and computer systems required to serve our customers.

Our reputation and ability to attract retain, and serve
  customers are dependent upon the reliable performance of our technology
  infrastructure and fulfillment processes. Interruptions or technical problems
  could make our systems unavailable to service customers and could diminish the
  overall attractiveness of our service to potential customers.

Risks Relating to Our Common Shares

Trading on the OTC Bulletin Board may be volatile and
  sporadic, which could depress the market price of our common shares and make it
  difficult for our shareholders to resell their shares.

Our common shares are quoted on the OTC Bulletin Board service.
  Trading in shares quoted on the OTC Bulletin Board is often thin and
  characterized by wide fluctuations in trading prices, due to many factors that
  may have little to do with our operations or business prospects. This volatility
  could depress the market price of our common shares for reasons unrelated to
  operating performance. Moreover, the OTC Bulletin Board is not a stock exchange,
  and trading of securities on the OTC Bulletin Board is often more sporadic than
  the trading of securities listed on a quotation system like Nasdaq or a stock
  exchange like Amex. Accordingly, shareholders may have difficulty reselling any
  of the shares.

Our share is a penny stock. Trading of our share may be
restricted by the SECs penny stock regulations which may limit a shareholders
ability to buy and sell our shares.

Our share is a penny stock. The Securities and Exchange
  Commission has adopted Rule 15g-9 which generally defines penny stock to be
  any equity security that has a market price (as defined) less than $5.00 per
  share or an exercise price of less than $5.00 per share, subject to certain
  exceptions. Our securities are covered by the penny stock rules, which impose
  additional sales practice requirements on broker-dealers who sell to persons
  other than established customers and accredited investors. The term
  accredited investor refers generally to institutions with assets in excess of
  $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual
  income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock
  rules require a broker-dealer, prior to a transaction in a penny stock not
  otherwise exempt from the rules, to deliver a standardized risk disclosure
  document in a form prepared by the SEC which provides information about penny
  stocks and the nature and level of risks in the penny stock market. The
  broker-dealer also must provide the customer with current bid and offer
  quotations for the penny stock, the compensation of the broker-dealer and its
  salesperson in the transaction and monthly account statements showing the market
  value of each penny stock held in the customers account. The bid and offer
  quotations, and the broker-dealer and salesperson compensation information, must
  be given to the customer orally or in writing prior to effecting the transaction
  and must be given to the customer in writing before or with the customers
  confirmation. In addition, the penny stock rules require that prior to a
  transaction in a penny stock not otherwise exempt from these rules; the
  broker-dealer must make a special written determination that the penny stock is
  a suitable investment for the purchaser and receive the purchasers written
  agreement to the transaction. These disclosure requirements may have the effect
  of reducing the level of trading activity in the secondary market for the shares
  that are subject to these penny stock rules. Consequently, these penny stock
  rules may affect the ability of broker-dealers to trade our securities. We
  believe that the penny stock rules discourage investor interest in and limit the
  marketability of our common shares.

FINRA sales practice requirements may also limit a
  shareholder's ability to buy and sell our share.

In addition to the penny stock rules promulgated by the
  Securities and Exchange Commission, the Financial Industry Regulatory Authority,
  or FINRA, has adopted rules that require that in recommending an investment to a
  customer, a broker-dealer must have reasonable grounds for believing that the
  investment is suitable for that customer. Prior to recommending speculative low
  priced securities to their non-institutional customers, broker-dealers must make
  reasonable efforts to obtain information about the customers financial status,
  tax status, investment objectives and other information. Under interpretations

13

---

of these rules, the FINRA believes that there is a high
probability that speculative low priced securities will not be suitable for at
least some customers. The FINRA requirements make it

more difficult for broker-dealers to recommend that their
customers buy our common shares, which may limit your ability to buy and sell
our share.

Trends, Risks and Uncertainties

We have sought to identify what we believe to be the most
  significant risks to our business, but we cannot predict whether, or to what
  extent, any of such risks may be realized nor can we guarantee that we have
  identified all possible risks that might arise. Investors should carefully
  consider all of such risk factors before making an investment decision with
  respect to our common shares.

|Item 2. | Properties
|------- | ----------

Our corporate headquarters are located at 1327 Ocean Avenue
  Suite B, Santa Monica, California 90401. We lease our headquarters on a month to
  month basis (suite B, M, F) for $7,800 per month.

We believe our current premises are adequate for our current
  operations and we do not anticipate that we will require any additional premises
  in the foreseeable future. When and if we require additional space, we intend to
  move at that time.

|Item 3. | Legal Proceedings
|------- | -----------------

We know of no material, existing or pending legal proceedings
  against us, nor are we involved as a plaintiff in any material proceeding or
  pending litigation. There are no proceedings in which any of our directors,
  officers or affiliates, or any registered or beneficial shareholder, is an
  adverse party or has a material interest adverse to our company.

|Item 4. | (Removed and Reserved)
|------- | ----------------------

PART II

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

In the United States, our common shares are traded on the
  Over-the-Counter Bulletin Board under the symbol EGCT. The following
  quotations obtained from Stock Watch reflect the high and low bids for our
  common shares based on inter-dealer prices, without retail mark-up, mark-down or
  commission and may not represent actual transactions.

The high and low prices of our common shares for the periods
  indicated below are as follows:

Quarter Ended(1)
      High
      LowDecember 31, 2010
      $0.52
      $0.07September 30, 2010
      $0.53
      $0.31June 30, 2010
      $0.85
      $0.31March 31, 2010
      $1.07
      $0.56December 31, 2009
      $2.00
      $0.66September 30, 2009
      $3.10
      $1.85June 30, 2009
      No
        trades
      No
        tradesMarch 31, 2009
      No
        trades
      No
        trades**Quarter Ended**(1)
      **High**
      **Low**


14

---

(1) Our common shares were initially approved for quotation on
the OTC Bulletin Board on March 14, 2007 under the symbol USRI. On June 11,
2009 our trading symbol changed to EGCT. There has been intermittent trading of
shares of our common stock since we were approved for quotation.

Our common shares are issued in registered form. Island Stock Transfer, 100 Second Avenue South, Suite 705S, St. Petersburg, FL, 33701(Telephone 727.289.0010, Facsimile 727.289.0069) is the registrar and transfer agent for our common shares. . On, March 31, 2011 the shareholders' list of our common shares pursuant to Island Stock Transfer showed 83 registered shareholders and 23,662,824 shares outstanding. The total number of shares outstanding stated in the Island Stock Transfer list of 23,662,824 does not include (i) 50,000 shares that have not yet been issued but recorded by the Company to Audio Eye, Inc. pursuant to a consulting agreement dated May 15, 2009; and (ii) 100,000 shares that have not yet been issued but recorded by the Company to Richard Keppler pursuant to an employment agreement providing for 100,000 shares, 25,000 shares at signing and 12,500 shares per quarter until the end of his two year contract. Pursuant to his employment agreement, Mr. Keppler was to have been issued 87,500 shares as at December 31, 2010 out of the total due of 100,000 shares.  Mr. Keppler is currently employed by the Company and the Company intends to issue Mr. Keppler the shares pursuant to his employment agreement.

Dividends

We have not declared any dividends on our common stock since
  the inception of our company on December 16, 2008. There is no restriction in
  our Articles of Incorporation and Bylaws that will limit our ability to pay
  dividends on our common stock. However, we do not anticipate declaring and
  paying dividends to our shareholders in the near future.

Equity Compensation Plan Information

On June 30, 2010 the Company, under its 2009 Stock Option Plan, granted qualified stock options to purchase 435,000 shares of its common stock for five years at $0.473 per share. Of the total options granted, 240,000 were granted to three members of the Board of Directors, 120,000 of which vest on July 2, 2010 and 120,000 of which vest on July 2, 2011 and 195,000 were granted to four consultants, all of which vested on July 2, 2010. The value of the options using the Black-Scholes valuation method is $0.13 per share or $56,550. The 120,000 Directors’ options vesting at any time after July 2, 2010 were valued at $15,600 and were expensed on the books of the Company at June 30, 2010. The 120,000 Directors’ options vesting on or after July 2, 2011 were recorded on the books as deferred compensation of $15,600 as of June 30, 2010. The 195,000 Consultants’ options vesting at any time after July 2, 2010 were valued at $25,350 and were expensed on the books of the Company as at June 30, 2010. The Company used the following assumptions in valuing the options: expected volatility 33%; expected term 5 years; expected dividend yield 0%, and risk-free interest rate of 1.49%.

Purchase of Equity Securities by the Issuer and Affiliated
  Purchasers

We did not purchase any of our shares of common stock or other
  securities during the year ended December 31, 2010.

Recent Sales of Unregistered Securities

None.

|Item 6. | Selected Financial Data
|------- | -----------------------

As a smaller reporting company, we are not required to
  provide the information required by this Item.

|Item 7. | Managements Discussion and
      Analysis of Financial Condition and Results **of
        Operations**
|------- | -------------------------------------------------------------------------------------------------------

The following discussion should be read in conjunction with our consolidated audited financial statements and the related notes for the years ended December 31, 2009 and 2010 that appear elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this annual report, particularly in the section entitled "Risk Factors" of this annual report.

15

---

Our consolidated audited financial statements are stated in
United States Dollars and are prepared in accordance with United States
Generally Accepted Accounting Principles.

Overview

Our car rental business and our systems business intends to
  provide distribution channels for certain environmental products and both
  generate certain internal product requirements in order to allow us to be
  green throughout our operation. Initially our business plan calls for the
  products to be focused on transportation and its ancillary markets.

We are a development stage company in the business of
  environmental transportation. We are structured with three operating units. Our
  primary operation is the car rental division which will focus on an
  environmental car rental operation.

|Results of Operations               |   | Year Ended December 31 |  
|----------------------------------- | - | ---------------------- | -
|
|                                    |   | 2010                   |  
|Revenue                             | $ | 386,708 $              |  
|Cost of Sales                       |   | 368,413                |  
|Gross profit (loss)                 |   | 18,295                 |  
|General and Administrative expenses |   | 2,547,511              |  
|Operating (loss)                    |   | (2,529,216             | )
|Interest income                     |   | 81                     |  
|Net (loss)                          | $ | (2,529,135             | )

In anticipation of our first rental car location and our need
  for environmentally friendly car cleaning (one of the most important aspects of
  a rental operation), we developed Ecologic Shine, a device and system for near
  waterless car cleaning that delivers cleaning comparable to normal washing
  without using any harmful chemicals.

We have launched Ecologic Shine in collaboration with Park ‘N Fly, the airport parking chain with prominent locations in 15 airport markets, and in this regard Park ‘N Fly has launched an initial test market and we currently have operations in Atlanta, San Diego and Los Ang eles with encouraging results, however no new locations have been established as at December 31, 2010.  An additional location was opened in Houston on March 24, 2010 and having not met expectations was subsequently closed on June 30, 2010 upon mutual agreement by Park ‘N Fly and the Company

The commercialization of the Ecologic Shine products and
  services are:

- Good for the environment
- Good for the customer
- Good for the vehicle
- Good for the bottom line

Revenue

For the year 2010, revenue in the amount of $386,708 consisted
  of limited levels of car washing services in Atlanta, San Diego and Los Angeles,
  our initial cities of test market operations. For the year 2009, revenue in the
  amount of $34,579 consisted of limited levels of car washing services beginning
  in October 2009 in Atlanta, San Diego and Los Angeles, our initial cities oftest market operations. As a development stage company, we have
not yet launched our major business activity, which is car rental.

Cost of sales

For the year 2010, cost of sales in the amount of $368,413 consisted of cleaning supplies and payroll, including related payroll taxes and workers compensation insurance. For the year 2009, cost of sales in the amount of $43,832 consisted of cleaning supplies and payroll, including related payroll taxes and workers compensation insurance. An audit of the workers compensation insurance resulted in a reduction of the deposit premium and reduced cost of sales accordingly.  Increased sales activity at the car washing in the year 2010 sites resulted in an increased cost of sales.  The increase in revenue and reduction in workers compensation insurance expense resulted in a gross profit in the year 2010 of $18,295 compared to a gross loss of ($9,253) in the year 2009.

16

---

General and Administrative Expenses

General and administrative expenses for the year ended December 31, 2010 were $2,547,511 as compared to $1,237,456 for the year ended December 31, 2009.  General and administrative expenses for both 2009 and 2010 were incurred primarily for the purpose of advancing the Company closer to its goal of financing and operating an environment-friendly car rental business.

Significant increases in general and administrative expenses in the year 2010 over 2009 were attributable to the following items:
(i) an increase in accounting and professional fees of $67,794 due primarily to a $10,834 increase in our auditors fees, a $59,000 financial consulting fee for services that commenced on July 1, 2010, a $15,655 decrease in legal fees and an increase of $2,090 in fees to various other accounting consultants;
(ii) an increase in management consulting fees of $313,488 due primarily to  $235,000 increases in accrued executive management fees which commenced May 1, 2009, therefore including twelve months of expense in 2010 and only eight months of expense in 2009;
(iii) an increase in amortization of stock options of $683,486, primarily due to amortizing stock options to three consultants all of which commenced in 2009 and included only a portion of the expense in that year; and
(iv) an increase in other outside services of  $92,500, including an increase of $80,000 to a consultant which commenced on December 1, 2009; and
(v)    an increase in capital market expenses of $75,000 attributable to a fee to a financial advisory consultant.

General and Administrative Expenses

|                                                                   |   | Year Ended |  |   | Year Ended |  |   |           |  
|------------------------------------------------------------------ | - | ---------- |  | - | ---------- |  | - | --------- | -
|                                                                   |   | December   |  |   | December   |  |   |           |  
|                                                                   |   | 2010       |  |   | 2009       |  |   | Variances |  
|                                                                   |   |            |  |   |            |  |   |           |  
|Legal, accounting and professional fees                            | $ | 132,266    |  | $ | 64,472     |  | $ | 67,794    |  
|Liability and workers compensation insurance                       |   | 10,263     |  |   | 9,067      |  |   | 1,196     |  
|Office supplies and miscellaneous expenses                         |   | 59,892     |  |   | 31,000     |  |   | 28,892    |  
|Management consulting services                                     |   | 758,488    |  |   | 445,000    |  |   | 313,488   |  
|Value of stock option grants                                       |   | 40,950     |  |   | -          |  |   | 40,950    |  
|Investor relations services                                        |   | 60,000     |  |   | 149,751    |  |   | (89,751   | )
|Amortization of stock options related to
      consulting services |   | 951,763    |  |   | 268,267    |  |   | 683,496   |  
|Other outside services                                             |   | 155,000    |  |   | 62,500     |  |   | 92,500    |  
|Publicity expense                                                  |   | 90,000     |  |   | 82,481     |  |   | 7,519     |  
|Rent expense                                                       |   | 93,800     |  |   | 56,400     |  |   | 37,400    |  
|Travel, entertainment and promotion                                |   | 51,406     |  |   | 64,250     |  |   | (12,844   | )
|Capital market expense                                             |   | 75,000     |  |   | -          |  |   | 75,000    |  
|Bad debts                                                          |   | 7,993      |  |   | -          |  |   | 7,993     |  
|Related party interest expense                                     |   | 49,731     |  |   | 1,554      |  |   | 48,177    |  
|Payroll taxes and employee benefits                                |   | 10,959     |  |   | 2,714      |  |   | 8,245     |  
|                                                                   |   |            |  |   |            |  |   |           |  
|Total                                                              | $ | 2,547,511  |  | $ | 1,237,456  |  | $ | 1,279,055 |  



Liquidity and Capital Resources

Working Capital

|                          |   | At December |   |   | At December |   |   |               |  
|------------------------- | - | ----------- | - | - | ----------- | - | - | ------------- | -
|                          |   | 31,         |   |   | 31,         |   |   | **Increase/** |  
|                          |   | 2010        |   |   | 2009        |   |   | (Decrease)    |  
|Current Assets            | $ | 36,138      |   | $ | 115,309     |   | $ | (79,171       | )
|Current Liabilities       |   | 526,687     |   |   | 242,663     |   |   | 284,024       |  
|Working Capital (Deficit) | $ | (490,549    | ) | $ | (127,354    | ) | $ | 363,195       |  

**Cash Flows**

|                                          |   | Year Ended   |   |   | Year Ended   |  
|----------------------------------------- | - | ------------ | - | - | ------------ | -
|                                          |   | December 31, |   |   | December 31, |  
|                                          |   | 2010         |   |   | 2009         |  
|                                          |   |              |   |   |              |  
|Net Cash (Used in) Operating Activities   | $ | (564,522     | ) | $ | (606,940     | )
|Net Cash Provided by Investing Activities |   | (600         | ) |   | 10,448       |  
|Net Cash Provided by Financing Activities |   | 560,535      |   |   | 622,658      |  
|Increase (Decrease) in Cash               | $ | (4,587       | ) | $ | 26,166       |  

We had cash in the amount of $21,579 as of December 31, 2010 as compared to $26,166 as of December 31, 2009. We had a working capital deficit of $490,549 as of December 31, 2010.

At December 31, 2010, the balance of loans made to our company by affiliates was $1,124,084, including accrued interest of $54,285. The loans bear interest at the rate of 7% per annum, are unsecured and are payable one year from demand.

We have suffered recurring losses from operations. The
  continuation of our company is dependent upon our company attaining and
  maintaining profitable operations and raising additional capital as needed. We
  anticipate that we will have to raise additional funds through private
  placements of our equity securities and/or debt financing to complete our
  business plan. There is no assurance that the financing will be completed as
  planned or at all. If we are unable to secure adequate capital to continue our
  planned operations, our shareholders may lose some or all of their investment
  and our business may fail.

Our principal sources of funds have been from sales of our
  common stock and loans from affiliates.

17

---

Future Financings

We will require additional financing in order to enable us to
  proceed with our plan of operations, as discussed above, including approximately
  $2,000,000 over the next 12 months to pay for our ongoing expenses. These
  expenses include working capital, SG&A, expansion of Ecologic Shine, and the
  pursuit of two acquisitions. These cash requirements are in excess of our
  current cash and working capital resources. Accordingly, we will require
  additional financing in order to continue operations and to repay our
  liabilities. There is no assurance that any party will advance additional funds
  to us in order to enable us to sustain our plan of operations or to repay our
  liabilities.

The Company is in negotiation with several financing sources
  for up to $2,000,000 in working capital, however there is no assurance that
  these negotiations will prove fruitful or that any financing will result from
  them.

On September 29, 2009, we executed a financial advisory and investment banking services agreement with North Sea Securities LP. Under this agreement, North Sea Securities was to advise Ecologic Transportation in structuring and executing transactions, act as its placement agent for equity, and assist it with a full range of corporate debt transactions for acquisitions and fleet financing. Both parties agreed that it was no longer in the best interest of the Company to continue the relationship and as at December 31, 2010 the Agreement was terminated.

On November 23, 2010, we executed an agreement with BMO Capital Markets (“BMO”) retaining BMO to act, on an exclusive basis, (with the exception of up to a $2 million private equity placement which we presently seek and reserve the right to continue to seek), as sole financial advisor and sole placement agent in connection with a possible private placement of equity or debt securities on a best efforts basis and subject to BMO’s satisfactory completion of its due diligence investigation.  The Company has paid a non-refundable retainer to BMO in the amount of $75,000 which would be credited against financing fees to BMO upon a successful closing of a financing.  There is no assurance that a financing of any kind will be successful.

We anticipate continuing to rely on equity sales of our common stock in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing stockholders. There is no assurance that we will
  achieve any additional sales of our equity securities or arrange for debt or other financing to fund our planned business activities.

Personnel

As of December 31, 2010, we had 35 full and part-time employees in addition to our directors and executive officers. Currently, we have 34 full and part-time time employees at our airport car cleaning locations in addition to our directors and
  executive officers. Over the next twelve months, we intend to significantly increase the number of our employees.

Contractual Obligations

As a “smaller reporting company”, we are not required to provide tabular disclosure obligations.

Going Concern

The consolidated audited financial statements included with this annual report have been prepared on the going concern basis which assumes that adequate sources of financing will be obtained as required and that our assets will be realized and
  liabilities settled in the ordinary course of business. Accordingly, the consolidated audited financial statements do not include any adjustments related to the recoverability of assets and classification of assets and liabilities that might be
  necessary should we be unable to continue as a going concern.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures
  or capital resources that is material to stockholders.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of
  America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by managements application of accounting policies. We
believe that understanding the basis and nature of the estimates and assumptions
involved with the following aspects of our financial statements is critical to
an understanding of our financial statements.

Per Share Amounts

Our company computes earnings per share under Accounting
  Standards Codification subtopic 260-10, Earnings Per Share (ASC 260-10). Net
  earnings (loss) per common share is computed by dividing net

18

---

income (loss) by the weighted average number of shares of
common stock and dilutive common stock equivalents outstanding during the
period. Dilutive common stock equivalents consist of shares issuable upon
conversion of convertible preferred shares and the exercise of our company's
stock options and warrants.

Revenue Recognition

Revenue is recognized when all applicable recognition criteria
  have been met, which generally include (a) persuasive evidence of an existing
  arrangement; (b) fixed or determinable price; (c) delivery has occurred or
  service has been rendered; and (d) collectability of the sales price is
  reasonably assured.

Recently Adopted Accounting Standards

The Company evaluates the pronouncements of various
  authoritative accounting organizations, primarily the Financial Accounting
  Standards Board (FASB), the US Securities and Exchange Commission (SEC), and
  the Emerging Issues Task Force (EITF), to determine the impact of new
  pronouncements on US GAAP and the impact on the Company. The Company has adopted
  the following new accounting standards during 2010:

Fair Value Measurements:
  Accounting Standards Update (ASU) No. 2010-06 amended existing disclosure
  requirements about fair value measurements by adding required disclosures about
  items transferring into and out of levels 1 and 2 in the fair value hierarchy;
  adding separate disclosures about purchase, sales, issuances, and settlements
  relative to level 3 measurements; and clarifying, among other things, the
  existing fair value disclosures about the level of disaggregation. The ASU was
  adopted during the period ended March 31, 2010, and its adoption had no impact
  on the Companys consolidated financial position, results of operations or cash
  flows.

Consolidations: ASU No.
  2009-17 revised the consolidation guidance for variable-interest entities. The
  modifications include the elimination of the exemption for qualifying special
  purpose entities, a new approach for determining who should consolidate a
  variable-interest entity, and changes to when it is necessary to
reassess who should consolidate a variable-interest entity. The ASU was adopted
during the period ended March 31, 2010, and its adoption had no impact on the
Companys consolidated financial position, results of operations or cash
flows.

Embedded Derivatives:
  ASU No. 2010-11 clarified that the transfer of credit risk that is only in the
  form of subordination of one financial instrument to another is an embedded
  derivative feature that should not be subject to potential bifurcation and
  separate accounting. This ASU was adopted during the period ended September 30,
  2010, and its adoption had no impact on the Companys consolidated financial
  position, results of operations or cash flows.

Recently Issued Accounting Standards Updates:

The following accounting
  standards updates were recently issued and have not yet been adopted by the
  Company. These standards are currently under review to determine their impact on
  the Companys consolidated financial position, results of operations, or cash
  flows.

ASU No. 2010-13 was issued in
  April 2010, and clarifies the classification of an employee share based payment
  award with an exercise price denominated in the currency of a market in which
  the underlying security trades. This ASU will be effective for the first fiscal
  quarter beginning after December 15, 2010, with early adoption permitted.

ASU 2010-29 was issued in
  December 2010, and requires a public entity to disclose pro forma information
  for business combinations that occurred in the current reporting period. The
  disclosures include pro forma revenue and earnings of the combined entity for
  the current reporting period as though the acquisition date for all business
  combinations that occurred during the year had been as of the beginning of the
  annual reporting period. This ASU will be effective for 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, 2010, with early adoption
  permitted.

There were various other updates
  recently issued, most of which represented technical corrections to the
  accounting literature or application to specific industries. None of the updates
  are expected to a have a material impact on the Company's consolidated financial
  position, results of operations or cash flows.

|Item 7A. | Quantitative and Qualitative
      Disclosures About Market Risk
|-------- | ----------------------------------------------------------------

As a smaller reporting company, we are not required to
  provide the information required by this Item.

|Item 8. | Financial Statements and
      Supplementary Data
|------- | -------------------------------------------------

Our consolidated audited financial statements are stated in
United States dollars (US$) and are prepared in accordance with United States
Generally Accepted Accounting Principles.

The following consolidated audited financial statements are
  filed as part of this annual report:



Report of
        Independent Registered Public Accounting FirmConsolidated Balance
        Sheets as at December 31, 2010 and 2009Consolidated Statements of Operations for
        the years ended December 31, 2010 and 2009, for the period from Inception
        (December 16, 2008) to December 31, 2010Consolidated
        Statements of Changes in Stockholders' (deficit) for the period from
        inception (December 16, 2008) to December 31,
          2010.Statement of Cash
        Flows for the Years Ended December 31, 2009 and 2010 and for the period
        December 16, 2008 (Inception) to December 31,
          2010Notes to the
        Consolidated Financial Statements.


20

---





REPORT OF INDEPENDENT REGISTERED PUBLIC  ACCOUNTING FIRM



Shareholders and Board of  Directors
  Ecologic  Transportation, Inc.

We  have audited the accompanying consolidated balance sheets of Ecologic  Transportation, Inc.( a development stage Company) as of December 31, 2010 and 2009,  and the related consolidated statements of operations, stockholders' equity (deficit),  and cash flows for the years then ended, and the period from inception  (December 16, 2008) to December 31, 2010.   These financial statements are the responsibility of the Company's  management.  Our responsibility is to  express an opinion on these financial statements based on our audits.

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

In  our opinion, the financial statements referred to above present fairly, in all  material respects, the consolidated financial position of Ecologic  Transportation, Inc. as of December 31, 2010 and 2009, the results of its consolidated  operations and its consolidated cash flows for the years then ended, and the  period from inception (December 16, 2008) to December 31, 2010, in conformity  with accounting principles generally accepted in the United States of America.

The  accompanying financial statements have been prepared assuming that the Company  will continue as a going concern.  As  discussed in Note 1 to the financial statements, the Company has suffered a  loss from operations and anticipates further losses in the development of its  business. These factors raise substantial doubt about the Company’s ability to  continue as a going concern.  The  financial statements do not include any adjustments that might result from the  outcome of this uncertainty



Denver,   Colorado
  March 31, 2011



---

|ECOLOGIC TRANSPORTATION, INC.
|-----------------------------
|(A DEVELOPMENT STAGE COMPANY)
|CONSOLIDATED BALANCE SHEETS  

|                                                                                                                                                                                                                                                |   | December 31, 2010 |   |   | December 31, 2009 |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ----------------- | - | - | ----------------- | -
|ASSETS                                                                                                                                                                                                                                          |  
|Current Assets                                                                                                                                                                                                                                  |   |                   |   |   |                   |  
|Cash                                                                                                                                                                                                                                            | $ | 21,579            |   | $ | 26,166            |  
|Accounts receivable, net                                                                                                                                                                                                                        |   | 8,607             |   |   | 27,415            |  
|Prepaid expenses and
      other current assets                                                                                                                                                                                                 |   | 5,952             |   |   | 61,728            |  
|                                                                                                                                                                                                                                                |   |                   |   |   |                   |  
|Total Current Assets                                                                                                                                                                                                                            |   | 36,138            |   |   | 115,309           |  
|                                                                                                                                                                                                                                                |   |                   |   |   |                   |  
|Other Assets                                                                                                                                                                                                                                    |   | 9,239             |   |   | 8,931             |  
|                                                                                                                                                                                                                                                |   |                   |   |   |                   |  
|TOTAL ASSETS                                                                                                                                                                                                                                    | $ | 45,377            |   | $ | 124,240           |  
|                                                                                                                                                                                                                                                |   |                   |   |   |                   |  
|                                                                                                                                                                                                                                                |   |                   |   |   |                   |  
|LIABILITIES AND STOCKHOLDERS' (DEFICIT)                                                                                                                                                                                                         |  
|                                                                                                                                                                                                                                                |   |                   |   |   |                   |  
|CURRENT LIABILITIES                                                                                                                                                                                                                             |   |                   |   |   |                   |  
|Accounts payable and
      accrued expenses                                                                                                                                                                                                     | $ | 466,128           |   | $ | 242,663           |  
|Due to related parties                                                                                                                                                                                                                          |   | 60,559            |   |   | -                 |  
|                                                                                                                                                                                                                                                |   |                   |   |   |                   |  
|Total Current Liabilities                                                                                                                                                                                                                       |   | 526,687           |   |   | 242,663           |  
|                                                                                                                                                                                                                                                |   |                   |   |   |                   |  
|Related party loans                                                                                                                                                                                                                             |   | 1,124,084         |   |   | 94,049            |  
|                                                                                                                                                                                                                                                |   |                   |   |   |                   |  
|STOCKHOLDERS' (DEFICIT)                                                                                                                                                                                                                         |   |                   |   |   |                   |  
|Preferred
      stock, no par value, 10,000,000 shares
      authorized 
           no shares issued or
      outstanding at December 31, 2010
      and 
           December 31, 2009, respectively                                            |   | -                 |   |   | -                 |  
|Common stock, $0.001 par
      value, 75,000,000
      shares 
           authorized 
           23,812,824
      and 22,662,824 shares issued and outstanding
      at 
           December 31, 2010 and December
      31, 2009, respectively |   | 23,813            |   |   | 22,663            |  
|Additional paid in
      capital                                                                                                                                                                                                                |   | 2,147,328         |   |   | 1,012,265         |  
|(Deficit) accumulated during the
      development stage                                                                                                                                                                                        |   | (3,776,535        | ) |   | (1,247,400        | )
|                                                                                                                                                                                                                                                |   |                   |   |   |                   |  
|Total Stockholders' (Deficit)                                                                                                                                                                                                                   |   | (1,605,394        | ) |   | (212,472          | )
|                                                                                                                                                                                                                                                |   |                   |   |   |                   |  
|TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)                                                                                                                                                                                                   | $ | 45,377            |   | $ | 124,240           |  

The accompanying notes are an integral part of these
  consolidated financial statements

F-2

---

|ECOLOGIC TRANSPORTATION, INC.                                               
|----------------------------------------------------------------------------
|(A DEVELOPMENT STAGE COMPANY)                                               
|CONSOLIDATED STATEMENTS OF OPERATIONS                                       
|FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009                              
|AND THE PERIOD DECEMBER 16, 2008 (INCEPTION) THROUGH
      DECEMBER 31, 2010

|                                                                     |   |              |   |   |              |     |  | Inception           |  
|-------------------------------------------------------------------- | - | ------------ | - | - | ------------ | --- |  | ------------------- | -
|                                                                     |   |              |   |   |              |     |  | (December 16, 2008) |  
|                                                                     |   | December 31, |   |   | December 31, |     |  | to December 31,     |  
|                                                                     |   | 2010         |   |   | 2009         |     |  | 2010                |  
|Revenue                                                              | $ | 386,708      |   | $ | 34,579 $     |     |  | 421,287             |  
|                                                                     |   |              |   |   |              |     |  |                     |  
|Cost of sales                                                        |   | 368,413      |   |   | 43,832       |     |  | 412,245             |  
|                                                                     |   |              |   |   |              |     |  |                     |  
|Gross profit (loss)                                                  |   | 18,295       |   |   | (9,253       | )   |  | 9,042               |  
|                                                                     |   |              |   |   |              |     |  |                     |  
|General and administrative
      expenses                            |   | 2,547,511    |   |   | 1,237,456    |     |  | 3,785,677           |  
|                                                                     |   |              |   |   |              |     |  |                     |  
|Operating (loss)                                                     |   | (2,529,216   | ) |   | (1,246,709   | )   |  | (3,776,635          | )
|                                                                     |   |              |   |   |              |     |  |                     |  
|Interest income                                                      |   | 81           |   |   | 19           |     |  | 100                 |  
|                                                                     |   |              |   |   |              |     |  |                     |  
|Net (loss)                                                           | $ | (2,529,135   | ) | $ | (1,246,690   | ) $ |  | (3,776,535          | )
|                                                                     |   |              |   |   |              |     |  |                     |  
|Weighted average common
      shares outstanding - basic and diluted |   | 23,334,742   |   |   | 18,054,100   |     |  |                     |  
|                                                                     |   |              |   |   |              |     |  |                     |  
|Net (loss) per common share -
      basic and diluted                | $ | (0.10        | ) | $ | (0.07        | )   |  |                     |  

The accompanying notes are an integral part of these
  consolidated financial statements

F-3

---

|ECOLOGIC TRANSPORTATION, INC.                                       
|--------------------------------------------------------------------
|(A DEVELOPMENT STAGE COMPANY)                                       
|CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT)                  
|PERIOD FROM DECEMBER 16, 2008 (INCEPTION) TO DECEMBER
      31, 2010

|                                                                                                                                                      |  |              |   |   |         |   |   |              |   |   |             |   |   | (DEFICIT)   |   |   |         |  
|----------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | - | - | ------- | - | - | ------------ | - | - | ----------- | - | - | ----------- | - | - | ------- | -
|                                                                                                                                                      |  |              |   |   |         |   |   |              |   |   |             |   |   | ACCUMULATED |   |   |         |  
|                                                                                                                                                      |  |              |   |   |         |   |   | ADDITIONAL   |   |   |             |   |   | DURING THE  |   |   |         |  
|                                                                                                                                                      |  | COMMON STOCK |   |   | PAID-IN |   |   | SUBSCRIPTION |   |   | DEVELOPMENT |   |   |             |  
|                                                                                                                                                      |  | SHARES       |   |   | AMOUNT  |   |   | CAPITAL      |   |   | RECEIVABLE  |   |   | STAGE       |   |   | TOTAL   |  
|                                                                                                                                                      |  |              |   |   |         |   |   |              |   |   |             |   |   |             |   |   |         |  
|Balance, December 16, 2008 (date of 
      inception)                                                                                                 |  | -            |   | $ | -       |   | $ | -            |   | $ | -           |   | $ | -           |   | $ | -       |  
|                                                                                                                                                      |  |              |   |   |         |   |   |              |   |   |             |   |   |             |   |   |         |  
|Issuance of common stock for 
      subscription receivable                                                                                           |  | 6,048,741    |   |   | 6,049   |   |   | -            |   |   | (6,049      | ) |   | -           |   |   | -       |  
|                                                                                                                                                      |  |              |   |   |         |   |   |              |   |   |             |   |   |             |   |   |         |  
|Contributed capital                                                                                                                                   |  | -            |   |   | -       |   |   | 710          |   |   | -           |   |   | -           |   |   | 710     |  
|                                                                                                                                                      |  |              |   |   |         |   |   |              |   |   |             |   |   |             |   |   |         |  
|Net loss                                                                                                                                              |  |              |   |   |         |   |   |              |   |   |             |   |   | (710        | ) |   | (710    | )
|                                                                                                                                                      |  |              |   |   |         |   |   |              |   |   |             |   |   |             |   |   |         |  
|Balance, December 31, 2008                                                                                                                            |  | 6,048,741    |   |   | 6,049   |   |   | 710          |   |   | (6,049      | ) |   | (710        | ) |   | -       |  
|                                                                                                                                                      |  |              |   |   |         |   |   |              |   |   |             |   |   |             |   |   |         |  
|Cash paid to satisfy subscription
      receivable                                                                                                    |  | -            |   |   | -       |   |   | -            |   |   | 6,049       |   |   | -           |   |   | 6,049   |  
|                                                                                                                                                      |  |              |   |   |         |   |   |              |   |   |             |   |   |             |   |   |         |  
|Issuance of common stock for investor 
      relations, web site design and radio 
      operations services at $0.24
      to $1.80 per 
      share |  | 750,000      |   |   | 750     |   |   | 119,750      |   |   | -           |   |   | -           |   |   | 120,500 |  
|                                                                                                                                                      |  |              |   |   |         |   |   |              |   |   |             |   |   |             |   |   |         |  
|Issuance of common stock for cash at 
      $0.001 to $0.25 per share                                                                                 |  | 11,612,745   |   |   | 11,613  |   |   | 510,947      |   |   | -           |   |   | -           |   |   | 522,560 |  
|                                                                                                                                                      |  |              |   |   |         |   |   |              |   |   |             |   |   |             |   |   |         |  
|Eliminate Ecologic Sciences, Inc. stock                                                                                                               |  | (17,559,486  | ) |   | (17,559 | ) |   | 17,559       |   |   | -           |   |   | -           |   |   | -       |  
|                                                                                                                                                      |  |              |   |   |         |   |   |              |   |   |             |   |   |             |   |   |         |  
|Accounting for shares in USR in reverse 
      acquisition                                                                                            |  | 7,520,834    |   |   | 7,521   |   |   | (7,521       | ) |   | -           |   |   | -           |   |   | -       |  
|                                                                                                                                                      |  |              |   |   |         |   |   |              |   |   |             |   |   |             |   |   |         |  
|Recapitalization for reverse acquisition                                                                                                              |  | 17,559,486   |   |   | 17,559  |   |   | (49,467      | ) |   | -           |   |   | -           |   |   | (31,908 | )
|                                                                                                                                                      |  |              |   |   |         |   |   |              |   |   |             |   |   |             |   |   |         |  
|Stock cancellations                                                                                                                                   |  | (3,269,496   | ) |   | (3,269  | ) |   | 3,269        |   |   | -           |   |   | -           |   |   | -       |  

F-4

---

|ECOLOGIC TRANSPORTATION, INC.                                       
|--------------------------------------------------------------------
|(A DEVELOPMENT STAGE COMPANY)                                       
|CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT)                  
|PERIOD FROM DECEMBER 16, 2008 (INCEPTION) TO DECEMBER
      31, 2010
|(continued)                                                         

|                                      |  |              |  |  |          |  |  |              |  |  |             |  |  | (DEFICIT)   |     |  |            |  
|------------------------------------- |  | ------------ |  |  | -------- |  |  | ------------ |  |  | ----------- |  |  | ----------- | --- |  | ---------- | -
|                                      |  |              |  |  |          |  |  |              |  |  |             |  |  | ACCUMULATED |     |  |            |  
|                                      |  |              |  |  |          |  |  | ADDITIONAL   |  |  |             |  |  | DURING THE  |     |  |            |  
|                                      |  | COMMON STOCK |  |  | PAID-IN  |  |  | SUBSCRIPTION |  |  | DEVELOPMENT |  |  |             |    
|                                      |  | SHARES       |  |  | AMOUNT   |  |  | CAPITAL      |  |  | RECEIVABLE  |  |  | STAGE       |     |  | TOTAL      |  
|Options issued for consulting         |  | -            |  |  | -        |  |  | 268,267      |  |  | -           |  |  | -           |     |  | 268,267    |  
|                                      |  |              |  |  |          |  |  |              |  |  |             |  |  |             |     |  |            |  
|Amortization of deferred compensation |  | -            |  |  | -        |  |  | 148,750      |  |  | -           |  |  | -           |     |  | 148,750    |  
|                                      |  |              |  |  |          |  |  |              |  |  |             |  |  |             |     |  |            |  
|Net loss                              |  | -            |  |  | -        |  |  | -            |  |  | -           |  |  | (1,246,690  | )   |  | (1,246,690 | )
|                                      |  |              |  |  |          |  |  |              |  |  |             |  |  |             |     |  |            |  
|Balance, December 31, 2009            |  | 22,662,824   |  |  | 22,663   |  |  | 1,012,265    |  |  | -           |  |  | (1,247,400  | )   |  | (212,472   | )
|                                      |  |              |  |  |          |  |  |              |  |  |             |  |  |             |     |  |            |  
|Common stock issued for services      |  | 1,150,000    |  |  | 1,150    |  |  | 80,475       |  |  |             |  |  |             |     |  | 81,625     |  
|                                      |  |              |  |  |          |  |  |              |  |  |             |  |  |             |     |  |            |  
|Options issued for consulting         |  |              |  |  |          |  |  | 25,350       |  |  |             |  |  |             |     |  | 25,350     |  
|                                      |  |              |  |  |          |  |  |              |  |  |             |  |  |             |     |  |            |  
|Options issued to directors           |  |              |  |  |          |  |  | 15,600       |  |  |             |  |  |             |     |  | 15,600     |  
|                                      |  |              |  |  |          |  |  |              |  |  |             |  |  |             |     |  |            |  
|Amortization of deferred compensation |  |              |  |  |          |  |  | 1,013,638    |  |  |             |  |  |             |     |  | 1,013,638  |  
|                                      |  |              |  |  |          |  |  |              |  |  |             |  |  |             |     |  |            |  
|Net loss                              |  |              |  |  |          |  |  |              |  |  |             |  |  | (2,529,135  | )   |  | (2,529,135 | )
|                                      |  |              |  |  |          |  |  |              |  |  |             |  |  |             |     |  |            |  
|Balance, December 31, 2010            |  | 23,812,824 $ |  |  | 23,813 $ |  |  | 2,147,328 $  |  |  | - $         |  |  | (3,776,535  | ) $ |  | (1,605,394 | )

The accompanying notes are an integral part of these
  consolidated financial statements

F-5

---

|ECOLOGIC TRANSPORTATION, INC.                                              
|---------------------------------------------------------------------------
|(A DEVELOPMENT STAGE COMPANY)                                              
|STATEMENTS OF CASH FLOWS                                                   
|FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2010                             
|AND FOR THE PERIOD DECEMBER 16, 2008 (INCEPTION) TO
      DECEMBER 31, 2010

|                                                                                                          |   |                   |   |   |                   |   |   | Inception       |  
|--------------------------------------------------------------------------------------------------------- | - | ----------------- | - | - | ----------------- | - | - | --------------- | -
|                                                                                                          |   |                   |   |   |                   |   |   | (December 16,   |  
|                                                                                                          |   |                   |   |   |                   |   |   | 2008)           |  
|                                                                                                          |   |                   |   |   |                   |   |   | to December 31, |  
|                                                                                                          |   | December 31, 2010 |   |   | December 31, 2009 |   |   | 2010            |  
|Cash flow from operating activities:                                                                      |   |                   |   |   |                   |   |   |                 |  
|Net (loss)                                                                                                | $ | (2,529,135        | ) | $ | (1,246,690        | ) | $ | (3,776,535      | )
|Adjustments to reconcile net (loss) to net cash 
                  
      (used in) operating activities: |   |                   |   |   |                   |   |   |                 |  
|Stock and options issued for compensation                                                                 |   | 1,196,213         |   |   | 477,517           |   |   | 1,673,730       |  
|Expenses
      converted to related party loans                                                           |   | 469,500           |   |   |                   |   |   | 469,500         |  
|Provision for uncollectable accounts                                                                      |   | (7,993            | ) |   | -                 |   |   | (7,993          | )
|Depreciation                                                                                              |   | 600               |   |   | -                 |   |   | 600             |  
|Changes in operating assets and liabilities:                                                              |   |                   |   |   |                   |   |   |                 |  
|(Increase) decrease in accounts                                                                           |   |                   |   |   |                   |   |   |                 |  
|receivable                                                                                                |   | 26,801            |   |   | (27,415           | ) |   | (614            | )
|(Increase) decrease in other assets                                                                       |   | (4,532            | ) |   | (8,931            | ) |   | (13,463         | )
|Increase in accounts
      payable and accrued                                                            |   |                   |   |   |                   |   |   |                 |  
|expenses                                                                                                  |   | 223,465           |   |   | 198,570           |   |   | 422,044         |  
|Increase in due to related
      parties                                                                  |   | 60,559            |   |   |                   |   |   | 60,559          |  
|Net cash
      (used in) operating activities                                                             |   | (564,522          | ) |   | (606,940          | ) |   | (1,172,172      | )
|                                                                                                          |   |                   |   |   |                   |   |   |                 |  
|Cash flows from investing activities:                                                                     |   |                   |   |   |                   |   |   |                 |  
|Cash used in purchase of
      fixed assets                                                               |   | (600              | ) |   | -                 |   |   | (600            | )
|Cash received in reverse merger                                                                           |   | -                 |   |   | 10,448            |   |   | 10,448          |  
|Net cash provided by (used in) investing 
                   
      activities                            |   | (600              | ) |   | 10,448            |   |   | 9,848           |  
|                                                                                                          |   |                   |   |   |                   |   |   |                 |  
|Cash flows from financing activities:                                                                     |   |                   |   |   |                   |   |   |                 |  
|Proceeds from related party loans                                                                         |   | 575,535           |   |   | 94,049            |   |   | 669,584         |  
|Payments to related party
      loans                                                                     |   | (15,000           | ) |   | -                 |   |   | (15,000         | )
|Contributed capital                                                                                       |   | -                 |   |   | -                 |   |   | 710             |  
|Subscriptions received                                                                                    |   | -                 |   |   | 6,049             |   |   | 6,049           |  
|Issuance of capital stock for cash                                                                        |   | -                 |   |   | 522,560           |   |   | 522,560         |  
|Net cash provided by financing activities                                                                 |   | 560,535           |   |   | 622,658           |   |   | 1,183,903       |  
|                                                                                                          |   |                   |   |   |                   |   |   |                 |  
|Increase (decrease) in cash                                                                               |   | (4,587            | ) |   | 26,166            |   |   | 21,579          |  
|                                                                                                          |   |                   |   |   |                   |   |   |                 |  
|Cash - beginning of period                                                                                |   | 26,166            |   |   | -                 |   |   | -               |  
|                                                                                                          |   |                   |   |   |                   |   |   |                 |  
|Cash - end of period                                                                                      |   | 21,579            |   |   | 26,166            |   |   | 21,579          |  
|                                                                                                          |   |                   |   |   |                   |   |   |                 |  
|Cash paid for:                                                                                            |   |                   |   |   |                   |   |   |                 |  
|Interest                                                                                                  | $ | -                 |   | $ | -                 |   | $ | -               |  
|Income taxes                                                                                              | $ | -                 |   | $ | -                 |   | $ | -               |  
|                                                                                                          |   |                   |   |   |                   |   |   |                 |  
|Non cash investing and
      financing activities                                                         |   |                   |   |   |                   |   |   |                 |  
|                                                                                                          |   |                   |   |   |                   |   |   |                 |  
|Recapitalization for reverse acquisition                                                                  | $ | -                 |   | $ | (31,908           | ) | $ | (31,908         | )
|Conversion of related party payable to note payable                                                       | $ | 469,500           |   | $ | -                 |   | $ | 469,500         |  
|Subscription receivable                                                                                   | $ | -                 |   | $ | -                 |   | $ | 6,049           |  

The accompanying notes are an integral part of these
  consolidated financial statements

F-6

---

ECOLOGIC TRANSPORTATION, INC.

(A Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

December 31, 2010 and 2009

NOTE 1. OVERVIEW

Ecologic Transportation, Inc. (the Company) was incorporated in
  the State of Nevada on September 30, 2005. The Company is a development stage
  company as defined by ASC 915-10, Accounting and Reporting by Development Stage
  Enterprises. A development stage enterprise is one in which planned principal
  operations have not commenced or if its operations have commenced, there has
  been no significant revenues there from.

The Company is structured with three operating units. The
  primary operation is the car rental division which will focus on an
  environmental car rental operation.

There are two subsidiaries in addition to Ecologic Car Rentals
  Inc.:

| | 1. | Ecologic Products, Inc., a Nevada Corporation     
| | -- | --------------------------------------------------
| | 2. | Ecologic Systems, Inc., a Nevada
      Corporation

Ecologic Shine, the first Ecologic product, is a proprietary
  waterless car cleaning process that has no adverse environmental impact. On
  September 24, 2009, the Company, through its wholly owned subsidiary Ecologic
  Products, Inc., entered into a service agreement with Park N Fly Inc., a
  national off-airport parking company. Pursuant to the terms of the service
  agreement, the Company has agreed to provide car wash cleaning services using
  our 100% organic cleaning products, known as Ecologic Shine TM,for a
  period of three years at certain of Park N Fly Inc.s locations. We opened a
  location in Atlanta, Georgia on October 19, 2009; in San Diego, California on
  November 16, 2009; and in Los Angeles, California in December 1, 2009.
  Subsequently, we opened at an additional lot in Atlanta, Georgia on March 1,
  2010, and Houston, Texas on March 15, 2010.

On April 26, 2009, the Company entered into an agreement and
  plan of merger, as amended, with Ecologic Sciences, Inc. (formerly, Ecologic
  Transportation, Inc.), a private Nevada corporation, and Ecological Acquisition
  Corp., a private Nevada corporation and wholly-owned subsidiary of the Company.
  Ecological Acquisition Corp. was formed by the Company for the purpose of
  acquiring all of the outstanding shares of Ecologic Sciences, Inc.. Pursuant to
  the agreement and plan of merger, as amended, Ecologic Sciences, Inc. (formerly,
  Ecologic Transportation, Inc.) was to be merged with and into Ecological
  Acquisition Corp., with Ecologic Sciences, Inc. continuing after the merger as a
  wholly-owned subsidiary of the Company.

On July 2, 2009, the Companys wholly-owned subsidiary
  Ecological Acquisition Corp. was merged into Ecologic Sciences, Inc. with
  Ecologic Sciences, Inc. being the sole surviving entity under the name Ecologic
  Sciences, Inc. and the Company being the sole shareholder of the surviving
  entity. Pursuant to the merger, the Company plans to raise additional capital
  required to meet immediate short-term needs and to meet the balance of its
  estimated funding requirements for the twelve months, primarily through the
  private placement of its securities. The Companys ability to continue as a
  going concern is dependent upon its ability to generate profitable operations in
  the future and/or to obtain the necessary financing to meet its obligations and
  repay its liabilities arising from normal business operations when they come
  due. Upon closing of the transactions contemplated by the agreement and plan of
  merger on July 2, 2009, the Company issued 17,559,486 shares of its common stock
  to the former shareholders of Ecologic Sciences, Inc. in consideration for the
  acquisition of all of the issued and outstanding common shares in the capital of
  Ecologic Sciences, Inc. As of the closing date, the former shareholders of
  Ecologic Sciences, Inc. held approximately 75.85% of the issued and outstanding
  common shares of the Company.

These financial statements have been prepared on a going
  concern basis. The Company has incurred losses since inception resulting in an
  accumulated deficit of $3,776,535 since inception and further losses are
  anticipated in the development of its business, raising substantial doubt about
  the Companys ability to continue as a going concern.

F-7

---

The financial statements do not include any adjustments
  relating to the recoverability and classification of recorded assets, or the
  amounts of and classification of liabilities that might be necessary in the
  event the Company cannot continue in existence.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents:The Company considers cash in
  banks, deposits in transit, and highly-liquid debt instruments purchased with
  original maturities of three months or less to be cash and cash equivalents.

Accounts Receivable:The Company extends credit to
  customers based upon individual credit evaluation and the specific circumstances
  of the customer. The Company provides an allowance for doubtful accounts that is
  based upon a review of outstanding receivables, historical collection
  information, and existing economic conditions.

The Company had $7,993 in allowance for doubtful accounts at
  December 31, 2010 and zero at December 31, 2009.

Per Share Amounts:Net earnings (loss) per common share
  is computed by dividing net income (loss) by the weighted average number of
  shares of common stock and dilutive common stock equivalents outstanding during
  the period. Dilutive common stock equivalents consist of shares issuable upon
  conversion of convertible preferred shares and the exercise of the Company's
  stock options and warrants

Income Taxes:Deferred income taxes reflect the net tax
  effects of temporary differences between the carrying amounts of assets and
  liabilities for financial and tax reporting purposes and the effect of net
  operating loss carry-forwards. Deferred tax assets are evaluated to determine if
  it is more likely than not that they will be realized. Valuation allowances have
  been established to reduce the carrying value of deferred tax assets in
  recognition of significant uncertainties regarding their ultimate realization.
  Further, the evaluation has determined that there are no uncertain tax positions
  required to be disclosed. Management evaluated the Companys tax positions under
  FASB ASC No. 740 Uncertain Tax Positions, and concluded that the
  Company had taken no uncertain tax positions that require adjustment to the
  consolidated financial statements to comply with the provisions of this
  guidance.

Use of Estimates:The preparation of the Company's
  consolidated financial statements in conformity with generally accepted
  accounting principles requires the Company's management to make estimates and
  assumptions that affect the amounts of assets and liabilities, the disclosure of
  contingent assets and liabilities at the date of the financial statements, and
  the reported amounts of revenues and expenses during the reporting period.
  Actual results could differ from those estimates.

Revenue Recognition:Revenue is recognized when all
  applicable recognition criteria have been met, which generally include (a)
  persuasive evidence of an existing arrangement; (b) fixed or determinable price;
  (c) delivery has occurred or service has been rendered; and (d) collectability
  of the sales price is reasonably assured.

The Companys current revenue stream is from Ecologic Products
  Ecologic Shine. Through the agreement with Park N Fly, Ecologic Shine is
  currently operating in five Park N Fly locations. Park N Fly is billed every
  two weeks by Ecologic Transportation for the total cars cleaned, and Park N Fly
  pays upon receipt.

Impairment of Long-Lived Assets:The Company evaluates
  its long-lived assets for impairment. If impairment indicators exist, the
  Company performs additional analysis to quantify the amount by which capitalized
  costs exceed recoverable value.

Stock Based Compensation:The Company records
  compensation expense for the fair value of stock options that are granted.
  Expense is recognized on a pro-rata basis over the vesting periods, if any, of
  the options. The fair value of stock options at their grant date is estimated by
  using the Black-Scholes-Merton option pricing model.

Fair Value of Financial Instruments:Fair value
  estimates discussed herein are based upon certain market assumptions and
  pertinent information available to management as of December 31, 2010.

F-8

---

The respective carrying values of certain on-balance-sheet
  financial instruments approximate their fair values. These financial instruments
  include cash and cash equivalents, accounts receivable, leases receivable,
  prepaid and other current assets, inventory, accounts payable and accrued
  expenses, capital leases, deferred revenue and line of credit. Fair values were
  assumed to approximate carrying values for these financial instruments since
  they are either short term in nature and their carrying amounts approximate fair
  value, they are receivable or payable on demand, or they bear appropriate
  interest rates.

Recently Adopted Accounting Standards

The Company evaluates the pronouncements of various
  authoritative accounting organizations, primarily the Financial Accounting
  Standards Board (FASB), the US Securities and Exchange Commission (SEC), and
  the Emerging Issues Task Force (EITF), to determine the impact of new
  pronouncements on US GAAP and the impact on the Company. The Company has adopted
  the following new accounting standards during 2010:

Fair Value Measurements:
  Accounting Standards Update (ASU) No. 2010-06 amended existing disclosure
  requirements about fair value measurements by adding required disclosures about
  items transferring into and out of levels 1 and 2 in the fair value hierarchy;

adding separate disclosures about purchase, sales, issuances,
  and settlements relative to level 3 measurements; and clarifying, among other
  things, the existing fair value disclosures about the level of disaggregation.
  The ASU was adopted during the period ended March 31, 2010, and its adoption had
  no impact on the Companys consolidated financial position, results of
  operations or cash flows.

Consolidations: ASU No.
  2009-17 revised the consolidation guidance for variable-interest entities. The
  modifications include the elimination of the exemption for qualifying special
  purpose entities, a new approach for determining who should consolidate a
  variable-interest entity, and changes to when it is necessary to reassess who
  should consolidate a variable-interest entity. The ASU was adopted during the
  period ended March 31, 2010, and its adoption had no impact on the Companys
  consolidated financial position, results of operations or cash flows.

Embedded Derivatives:
  ASU No. 2010-11 clarified that the transfer of credit risk that is only in the
  form of subordination of one financial instrument to another is an embedded
  derivative feature that should not be subject to potential bifurcation and
  separate accounting. This ASU was adopted during the period ended September 30,
  2010, and its adoption had no impact on the Companys consolidated financial
  position, results of operations or cash flows.

Recently Issued Accounting Standards Updates:

The following accounting
  standards updates were recently issued and have not yet been adopted by the
  Company. These standards are currently under review to determine their impact on
  the Companys consolidated financial position, results of operations, or cash
  flows.

ASU No. 2010-13 was issued in
  April 2010, and clarifies the classification of an employee share based payment
  award with an exercise price denominated in the currency of a market in which
  the underlying security trades. This ASU will be effective for the first fiscal
  quarter beginning after December 15, 2010, with early adoption permitted.

ASU 2010-29 was issued in
  December 2010, and requires a public entity to disclose pro forma information
  for business combinations that occurred in the current reporting period. The
  disclosures include pro forma revenue and earnings of the combined entity for
  the current reporting period as though the acquisition date for all business
  combinations that occurred during the year had been as of the beginning of the
  annual reporting period. This ASU will be effective for 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, 2010, with early adoption
  permitted.

There were various other updates
  recently issued, most of which represented technical corrections to the
  accounting literature or application to specific industries. None of the updates
  are expected to a have a material impact on the Company's consolidated financial
  position, results of operations or cash flows.

F-9

---

NOTE 3. PREPAID EXPENSES

The prepaid expenses of $5,952 as of December 31, 2010 consists
  primarily of prepaid workers compensation insurance and $60,000 as of December
  31, 2009 represents the prepaid portion of workers compensation insurance and
  the prepaid portion of a fee, pursuant to a consulting agreement between the
  Company and Capital Group Communications, Inc., for its services to assist the
  Company in its efforts to gain greater recognition and awareness among relevant
  investors in the public capital market. The total fee, which was paid through
  the issuance of 500,000 shares of restricted common stock of the Company valued
  at $120,000, was amortized ratably over the twelve month period commencing July
  1, 2009 through June 30, 2010.

NOTE 4. RELATED PARTY LOANS

As at December 31, 2010, affiliates and related parties are due
  a total of $1,184,643, which is comprised of loans to the Company of $1,069,799,
  accrued interest of $54,285 and unpaid expenses of $60,559. During the year
  ended December 31, 2010, loans to the Company increased by $975,750 and accrued
  interest increased by $54,285.

The Companys $975,750 increase in loans is comprised of an
  increase in already outstanding loans from Huntington Chase, Ltd. by a total of
  $290,250. This consisted of $305,250 in proceeds and $15,000 in payments. The
  remaining portion was a conversion of accrued compensation to notes payable.
  During 2010 the Company issued a $425,000 promissory note to R.I. Heller &
  Co. LLC and a $232,500 promissory note to Huntington Chase, Ltd. (the Related
  Party Creditors). The promissory notes represent accrued compensation owed to
  the Related Party Creditors. During 2010 the Company issued notes to OFS Capital
  Group in total of $28,000.

All outstanding related party notes bear interest at the rate
  of seven percent (7%) per annum and are due and payable within one (1) year of
  receipt of written demand by the related party creditors.

Accrued interest at December 31, 2010 was $54,285.

NOTE 5. STOCKHOLDERS (DEFICIT)

The total number of authorized shares of common stock that may
  be issued by the Company is 75,000,000 with a par value of $0.001 per share.

The Board of Directors has approved an action to amend the
  Articles of Incorporation to provide for the issuance of 10 million shares of
  preferred stock with no par value. The amendment of the Articles has not yet
  been filed with the Nevada Secretary of State's Office.

During January 2009 the Company issued 500,000 common shares
  for investor relations consulting services valued at $120,000 (see note 3).

During March 2009 the Company issued 9,560,745 common shares
  for cash at $0.001 per share.

During April 2009 the Company issued 1,200,000 common shares
  for cash at $0.25 per share.

During April 2009 the Company issued 100,000 common shares for
  web site design services valued at $180,000 of which $80,000 is deferred at
  December 31, 2010.

During May 2009 the Company issued 50,000 common shares for web
  site design services valued at $90,000 of which $41,250 is deferred at December
  31, 2010.

During June 2009 the Company issued 100,000 common shares for
  radio operations services valued at $180,000 which was fully expensed during
  2009 and 2010.

Effective June 11, 2009, we changed our name from USR
  Technology, Inc. to Ecologic Transportation, Inc., by way of a merger with
  our wholly owned subsidiary Ecologic Transportation, Inc., which was formed
  solely for the change of name.

On July 2, 2009, USRs wholly owned subsidiary Ecological
  Acquisition Corp. was merged into Ecologic Sciences, Inc. with Ecologic
  Sciences, Inc. being the sole surviving entity under the name Ecologic
  Sciences, Inc. and our company being the sole shareholder of the surviving
  entity. In connection with the closing of the merger, the Company issued an
  aggregate of 17,559,486 restricted shares of common stock representing
  approximately 75.85% of the issued and outstanding shares of the Company to the
  former shareholders of Ecologic Sciences, Inc.. As a result, the issued and
  outstanding shares increased from 5,620,832 shares of common stock to 23,180,318
  shares of common stock.

Effective July 2, 2009, the Company issued 7,520,834 common
  shares to the shareholders of predecessor Ecologic Transportation, Inc.
  (formerly USR Technology, Inc.), on an exchange basis of one share of Ecologic
  Sciences, Inc.

F-10

---

(formerly, Ecologic Transportation, Inc) common stock for each
  share of Ecologic Transportation, Inc. (formerly USR Technology, Inc.), common
  stock.

During July 2009, certain stockholders canceled 1,900,002 post
  split shares of common stock for no consideration.

During October 2009, certain stockholders canceled 1,369,494
  post split shares of common stock for no consideration.

During October 2009 the Company issued 852,000 shares of its
  common stock for $213,000 in cash.

During May 2010 the Company issued 1,000,000 shares of its
  common stock to a consultant for services valued at $450,000 of which $309,375
  is deferred at December 31, 2010.

On May 20, 2010 the Company entered into a Memorandum of
  Understanding and Binding Effect (Memorandum) with Wakabayashi Fund, LLC
  (Wakabayashi) to cancel the agreement that the Company entered into with
  Wakabayishi on May 11, 2010 wherein Wakabayishi was to provide institutional
  market awareness and public relations services to the Company. Under the
  original agreement, the Company issued to Wakabayashi a retainer of 250,000
  shares of the Companys common stock (the Shares). Under the terms of the
  Memorandum, Wakabayishi agreed to return the Shares and the Company agreed to
  cancel the Shares and issue 50,000 new shares valued at $0.45 per share for a
  total of $22,500 of stock compensation expense to Wakabayishi (the Replacement
  Shares). As of December 31, 2010 the Company has recorded the cancellation and
  issuance as stated above.

During September 2010, the Company issued 100,000 shares for
  services valued at $31,000.

As at December 31, 2010 the Company has 23,812,824 common
  shares issued and outstanding.

NOTE 6. WARRANTS AND OPTIONS

On June 30, 2010 the Company, under its 2009 Stock Option Plan,
  granted qualified stock options to purchase 435,000 shares of its common stock
  for five years at $0.473 per share. Of the total options granted, 240,000 were
  granted to three members of the Board of Directors, 120,000 of which vest on
  July 2, 2010 and 120,000 of which vest on July 2, 2011 and 195,000 were granted
  to four consultants, all of which vest on July 2, 2010. The value of the options
  using the Black-Scholes valuation method is $0.13 per share or $56,550. The
  120,000 Directors options vesting at any time after July 2, 2010 were valued at
  $15,600 and were expensed on the books of the Company at June 30, 2010. The
  120,000 Directors options vesting on or after July 2, 2011 were recorded on the
  books as prepaid expense of $15,600 as of June 30, 2010. The 195,000
  Consultants options vesting at any time after July 2, 2010 were valued at
  $25,350 and were expensed on the books of the Company as at June 30, 2010. The
  Company used the following assumptions in valuing the options: expected volatility 33%;
  expected term 5 years; expected dividend yield 0%, and risk-free interest rate
  of 1.49% .

On October 1, 2009 the Company entered into a consulting
  agreement for services under which the Company issued 2,287,547 options to
  purchase 2,287,547 shares of its common stock for an option price of $0.25. The
  options vested on September 1, 2010. The options are exercisable for a period of
  three years after the vesting date. The Company has valued the options utilizing
  The Black Scholes Valuation at $989,645 and for accounting purposes has
  amortized the option value over the eleven month period commencing with the date
  of issuance and ending when the options vest. The full amount was amortized
  during 2009 and 2010. Assumptions used in valuing the options: expected term is
  3.67 years, expected volatility is 0.33, risk-free interest rate is 2.00%, and
  dividend yield is 0.00% .

In conjunction with the reverse acquisition in July 2009, ETI
  assumed 90,250 warrants outstanding with an exercise price of $2.50. The
  warrants expire on September 30, 2011.

As at December 31, 2010 the Company has 90,250 Warrants and
  2,287,547 Options issued and outstanding.

|               |  | Outstanding and Exercisable
      Warrants |  |  |                  | 
|-------------- |  | ------------------------------------------ |  |  | ---------------- | 
|               |  |                                            |  |  | Remaining        | 
|               |  | Number of                                  |  |  | Contractual Life | 
|Exercise Price |  | Shares                                     |  |  | (in years)       | 
|$2.50          |  | 90,250                                     |  |  | .75              | 
|               |  | 90,250                                     |  |  |                  | 

Number
      
      
      Weightedof
      
      
      AverageWarrants
      
      Shares
      
      
      ExercisePriceOutstanding at Inception (December 16,
        2008)
      
      -
      
      
      -Issued
      
      -
      
      
      -Exercised
      
      -
      
      
      -Expired / Cancelled
      
      -
      
      
      -Outstanding at December 31, 2008
      
      -
      
      $
      -Issued
      
      92,250
      
      
      2.50Exercised
      
      -
      
      
      -Expired / CancelledOutstanding at December 31, 2009
      
      90,250
      
      $
      2.50Issued
      
      -
      
      
      -Exercised
      
      -
      
      
      -Expired / Cancelled
      
      -
      
      
      -Outstanding at December 31, 2010
      
      90,250
      
      
      2.50


F-11

---

|Outstanding and Exercisable
      Options | 
|----------------------------------------- | 
|                                          | 
|                                          | 
|Exercise Price                            | 
|$0.25                                     | 
|$0.473                                    | 
|                                          | 

Number
      
      
      Weightedof
      
      
      AverageOptions
      
      Shares
      
      
      ExercisePriceOutstanding at Inception (December 16,
        2008)
      
      -
      
      $
      -Issued
      
      -
      
      
      -Exercised
      
      -
      
      
      -Expired / Cancelled
      
      -
      
      
      -Outstanding at December 31, 2008
      
      -
      
      
      -Issued October 1, 2009
      
      2,287,547
      
      
      0.25Exercised
      
      -
      
      
      -Expired / Cancelled
      
      -
      
      
      -Outstanding at December 31, 2009
      
      2,287,547
      
      
      0.25Issued
      
      435,000
      
      
      0.47Exercised
      
      -
      
      
      -Expired / Cancelled
      
      -
      
      
      -Outstanding at December 31, 2010
      
      2,722,547
      
      $
      0.32


NOTE 7 COMMITMENTS AND CONTINGENCIES

The Company has an employment agreement with William N.
  Plamondon III, Chief Executive Officer. The employment agreement calls for Mr.
  Plamondon to be paid $35,000 per month for a period of three years. The
  employment agreement provides for standard health benefits.

Huntington Chase, Ltd., a Nevada corporation wherein Edward W.
  Withrow, III, Ecologic Transportations Chairman owns a majority control, signed
  a consulting agreement with the Company on October 12, 2009. The consulting
  agreement provides for Huntington Chase, Ltd. to perform certain advisory
  functions to the Company. The consulting agreement provides that Huntington
  Chase, Ltd. be paid $15,000 per month for a period of three years.

The Company has an employment agreement with Richard Keppler on
  July 9, 2009 to create, produce and perform an online radio show entitled
  Ecologic Radio. The employment agreement has a term of two years and calls for
  Mr. Keppler to be paid $3,000 per month for the initial six months and then
  reverts to $5,000 per month for the remaining 18 months The employment agreement
  also provides for Mr. Keppler to receive, as additional compensation, 100,000
  shares of the Companys common stock; 25,000 shares at signing and 12,500 shares
  per quarter until the end of his two year agreement. Pursuant to his employment
  agreement, Mr. Keppler was to have been issued 87,500 shares as at December 31,
  2010 out of the total due of 100,000 shares. Mr. Keppler is currently employed
  by the Company and the Company intends to issue Mr. Keppler the shares pursuant
  to his employment agreement.

The Company signed an Investment Banking and Financial Advisory Agreement (“the Innovator Agreement”) with Innovator Capital of London England (“Innovator”) dated January 9, 2010. The Agreement provides for Innovator to
  perform the following services; strategic business consulting, capital raising activities, strategic partnership in both the private and public sector, merger and acquisition advisory and corporate communications strategy. The economics of the
  agreement are as follows; an engagement fee of 15,625 pound sterling (USD$23,437) was to be paid upon signing. The Company negotiated to pay 7,812.50 pound sterling (USD$12,481) upon signing and the remaining 7,812.50 pounds sterling after
  the Company raises a minimum of $1,000,000. The agreement provides for a monthly retainer fee of 15,625 pounds sterling (USD $23,437) which will accrue on a daily basis payable monthly in arrears; such fee will be deferred and will commence,
  with arrears also being payable, immediately upon the receipt by Ecologic of a minimum aggregate $2,000,000. Innovator receives a 5% fee of all monies raised for the Company. As at December 31, 2010, the Company and Innovator are in dispute with
  respect to the Innovator Agreement, however it is management’s belief that the outcome will not adversely affect the Company.

Matrix Advisors, LLC a New York Limited Liability Company (“Matrix”) signed a consulting agreement with the Company dated effective October 1, 2009. The consulting agreement provides for Matrix Advisors to deliver advisory services to
  the Company for a period of three years for a fee of $10,000 per month and options to purchase 2,287,547 shares exercisable at $0.25 per share for a term of three years from September 1, 2009. The vesting period for the options ended on
  September 1, 2010. On November 24, 2010, Matrix waived its right of first refusal to participate in the financing transaction contemplated in the engagement letter between BMO Capital Markets Corp and the Company.

On May 18, 2010 the Company entered into an Independent Consulting Agreement (“Consulting Agreement”) with Prominence Capital, LLC (“Prominence”) to represent the Company in investor communications and public relations for a
  term of two (2) years commencing May 18, 2010. As remuneration for the services of Prominence, the Company issued to Prominence 1,000,000 restricted common shares of the Company valued at $0.45 for a per share which was the stock price on May
  18, 2010, the date of issuance. The Company recorded $28,125 as operating expense for the period May 18, 2010 to June 30, 2010 and deferred compensation of $421,875 which will be amortized through May 18, 2012. The Company has a deferred
  compensation balance of $309,375 at December 31, 2010.

On May 20, 2010 the Company entered into a Memorandum of Understanding and Binding Effect (“Memorandum”) with Wakabayashi Fund, LLC (“Wakabayashi”) to cancel the agreement that the Company entered into with Wakabayishi on May
  11, 2010 wherein Wakabayishi was to provide institutional market awareness and public relations services to the Company. Under the original agreement, the Company issued to Wakabayashi a retainer of 250,000 shares of the Company’s common stock
  (the “Shares”). Under the terms of the Memorandum, Wakabayishi agreed to return the Shares and the Company agreed to cancel the Shares and issue 50,000 new shares for consulting expense valued at $0.45 per share for a total of
  $22,500 to Wakabayishi (the “Replacement Shares”).

On July 1, 2010 the Company entered into an Advisory Agreement
  for Executive Services of Norman A. Kunin with Kunin Business Consulting
  (KBC), a division of Ace Investors, LLC (the Advisory Agreement.) The
  Advisory Agreement is for the non-exclusive services of Norman A. Kunin (the
  Executive) to serve as Chief Financial Officer of the Company. The term of the
  engagement is for one year commencing on July 1, 2010, with a one year option to
  continue upon mutually agreeable terms. Executive fee compensation is at the
  rate of $5,000 per month, payment of which is deferred until the Company is
  capitalized with a minimum of $1,000,000, but will continue to accrue on a
  monthly basis. The Company will reimburse KBC for services already rendered in
  the one-time amount of $25,000.

NOTE 8. INCOME TAXES

Temporary differences are differences between the tax basis of
  assets and liabilities and their reported amounts in the financial statements
  that will result in taxable or deductible amounts in future years. Under this
  method, deferred tax assets and liabilities are determined based on differences
  between financial reporting and tax bases of assets and liabilities and are
  measured using the enacted tax rates and laws that will be in effect
  when the differences are expected to reverse. A valuation allowance is recorded
  when the ultimate realization of a deferred tax as The tax effects of temporary
  differences that give rise to significant portions of the deferred tax assets
  and deferred tax liabilities at December 31, 2010 and 2009, are presented below:

F-12

---

|                                        |   | December 31, 2010 |  |   | December 31, 2009 |  
|--------------------------------------- | - | ----------------- |  | - | ----------------- | -
|Deferred tax assets:                    |   |                   |  |   |                   |  
|Net operating loss carry
      forwards | $ | 1,363,000         |  | $ | 424,000           |  
|Less valuation allowance                |   | (1,363,000        |  |   | (424,000          | )
|Net deferred tax asset                  | $ | -                 |  | $ | -                 |  

At this time, the Company is unable to determine if it will be
  able to benefit from its deferred tax asset. There are limitations on the
  utilization of net operating loss carry forwards, including a requirement that
  losses be offset against future taxable income, if any. In addition, there are
  limitations imposed by certain transactions which are deemed to be ownership
  changes. Accordingly, a valuation allowance has been established for the entire
  deferred tax asset. The increase in the valuation allowance was approximately
  $939,000 during 2010.

The amount of income taxes the Company pays is subject to
  ongoing examinations by federal and state tax authorities. To date, there have
  been no reviews performed by federal or state tax authorities on any of the
  Companys previously filed returns. The Companys 2008 and later tax returns are
  still subject to examination.

NOTE 9 SUBSEQUENT EVENTS

The Company has evaluated events and transactions that occurred
  between December 31, 2010 and the date the consolidated financial statements
  were available for issue, for possible disclosure or recognition in the
  consolidated financial statements. The Company has determined that there were no
  such events or transactions that warrant disclosure or recognition in the
  consolidated financial statements except as noted below.

F-13

---

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

We have not changed our auditors since our last year end and we
  have not had any disagreements with our auditors.

|Item 9A. | Controls and Procedures
|-------- | -----------------------

Managements Report on Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are
  designed to ensure that information required to be disclosed in our reports
  filed under the Securities Exchange Act of 1934, as amended, is
  recorded, processed, summarized and reported within the time periods specified
  in the Securities and Exchange Commission's rules and forms, and that such
  information is accumulated and communicated to our management, including our
  president, chief executive officer and chief financial officer to allow for
  timely decisions regarding required disclosure. In designing and evaluating our
  disclosure controls and procedures, our management recognizes that any controls
  and procedures, no matter how well designed and operated, can provide only
  reasonable assurance of achieving the desired control objectives, and our
  management is required to apply its judgment in evaluating the cost-benefit
  relationship of possible controls and procedures. Because of its inherent
  limitations, internal control over financial reporting may not prevent or detect
  misstatements. Therefore, even those systems determined to be effective can
  provide only reasonable assurance with respect to financial statement
  preparation and presentation. Projections of any evaluation of effectiveness to
  future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may
deteriorate.

As of December 31, 2010, the end of our fiscal year covered by
  this report, we carried out an evaluation, under the supervision and with the
  participation of our president, chief executive officer and chief financial
  officer of the effectiveness of the design and operation of our disclosure
  controls and procedures. Based on the foregoing, our president, chief executive
  officer and chief financial officer concluded that our disclosure controls and
  procedures were effective as of the end of the period covered by this annual
  report.

Managements Report on Internal Control over Financial
  Reporting

Our management is responsible for establishing and maintaining
  adequate internal control over financial reporting. Responsibility, estimates
  and judgments by management are required to assess the expected benefits and
  related costs of control procedures. The objectives of internal control include
  providing management with reasonable, but not absolute, assurance that assets
  are safeguarded against loss from unauthorized use or disposition, and that
  transactions are executed in accordance with managements authorization and
  recorded properly to permit the preparation of consolidated financial statements
  in conformity with accounting principles generally accepted in the United
  States. Our management assessed the effectiveness of our internal control over
  financial reporting as of December 31, 2010. In making this assessment, our
  management used the criteria set forth by the Committee of Sponsoring
  Organizations of the Treadway Commission (COSO) in Internal
    Control-Integrated Framework. Our management has concluded that, as of
  December 31, 2010, our internal control over financial reporting is effective in
  providing reasonable assurance regarding the reliability of financial reporting
  and the preparation of financial statements for external purposes in accordance
  with US generally accepted accounting principles. Our management reviewed the
  results of their assessment with our Board of Directors.

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

Inherent limitations on effectiveness of controls

Internal control over financial reporting has inherent
  limitations which include but is not limited to the use of independent
  professionals for advice and guidance, interpretation of existing and/or
  changing rules and principles,

23

---

segregation of management duties, scale of organization, and
personnel factors. Internal control over financial reporting is a process which
involves human diligence and compliance and is subject to lapses in judgment and
breakdowns resulting from human failures. Internal control over financial
reporting also can be circumvented by collusion or improper management override.
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements on a timely basis, however these
inherent limitations are known features of the financial reporting process and
it is possible to design into the process safeguards to reduce, though not
eliminate, this risk. Therefore, even those systems determined to be effective
can provide only reasonable assurance with respect to financial statement
preparation and presentation. Projections of any evaluation of effectiveness to
future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal controls over
  financial reporting that occurred during the year ended December 31, 2010 that
  have materially or are reasonably likely to materially affect, our internal
  controls over financial reporting.

|Item 9B. | Other Information
|-------- | -----------------

None

PART III

|Item 10. | Directors, Executive Officers
      and Corporate Governance
|-------- | ------------------------------------------------------------

All of the directors of our company hold office until the next
  annual meeting of the stockholders or until their successors have been elected
  and qualified. Our officers are appointed by our board of directors and hold
  office until their death, resignation or removal from office. Our directors and
  executive officers, their ages, positions held, and duration as such, are as
  follows:

Name
      Position Held with the Company
      Age
      Date First Elected or AppointedWilliam N.
        Plamondon III
      President, Chief Executive Officer and Director
      63
      July 2, 2009John L. Ogden
      Director
      57
      March 3, 2008Edward W. Withrow
        III
      Chairman of the Board and Director
      46
      July 2, 2009Edward W. Withrow
        Jr.
      Director
      73
      July 2, 2009Shelly J. Meyers
      Director
      51
      July 2, 2009Dr. Martin A.
        Blake
      Director
      54
      August 12, 2010Erin E. Davis
      Secretary and Vice President of 
        Marketing and Communications
      45
      July 2, 2009Paul Christensen
      Vice President of Rental Operations
      63
      July 2, 2009Norman A. Kunin
      Chief Financial Officer
      73
      July 1, 2010


24

---

Business Experience

The following is a brief account of the education and business
  experience of each director and executive officer during at least the past five
  years, indicating each person's principal occupation during the period, and the
  name and principal business of the organization by which he was employed.

William N. Plamondon III, President, Chief Executive Officer
  and Director

Mr. Plamondon has served over 30 years in a variety of
  industries as Chief Executive Officer and Chief Restructuring Officer for both
  public and private companies. In his various roles as an executive, a board
  member, and an advisor, Mr. Plamondon realized that a critical success factor
  for any venture was the ability to get the right experience matched with the
  appropriate perspective. Mr. Plamondon has purchased over $500 million in
  acquisition value businesses and sold companies with enterprise values of over
  $1 billion. He has secured financings in excess of $3 billion.

As CEO of R.I. Heller & Co., LLC, Mr. Plamondon served on a
  variety of assignments such as the Chief Executive Officer of Advantage Car
  Rental. An expert in distributed management, he was brought in to plan and
  execute a restructuring. He also served as CEO for EV Rental Cars, LLC. Mr.
  Plamondon recently completed an assignment where he served as the interim CEO
  for Protein Polymer Technologies, Inc., a biomedical device company based in San
  Diego, CA. Prior to these assignments, he served as an Advisor to the CEO, CFO
  and the Board of Directors of Murray, Inc., a manufacturing company, pre and
  post filing for Chapter 11. Simultaneously, he served as the Chief Restructuring
  Officer for May Logistics Services where he restructured $100 million bank debt
  and sold a $20 million operating division of the company.

Prior to those assignments, Mr. Plamondon was President and
  Chief Executive Officer of ANC Rental Corporation, the parent company of Alamo
  Rent A Car and National Car Rental, a 2.5 billion dollar global company with
  over 14,000 employees. Following a successful restructuring including the
  renegotiation of all franchising agreements, the company was sold in October,
  2003. He was appointed by the Board with the consensus of secured and unsecured
  creditors after serving as Chief Restructuring Officer, where he was responsible
  for developing and implementing a strategic plan to return the company to
  profitable growth in the aftermath of the travel industry slowdown following
  September 11, 2001. His tenure with the business began in June of 2000 when he was named to serve on ANC's board of
directors, where he chaired the audit committee.

In December 2000, Mr. Plamondon joined E&Y Capital
  Advisors, LLC, a subsidiary of Ernst & Young LLP, as a consultant in its
  Restructuring Advisory Services Group. In addition to participating in client
  engagements, he developed and managed a "crisis management" resource to provide
  clients with experienced candidates for the positions of CEO, CFO and COO.

Prior to forming R.I. Heller & Co., LLC, Mr. Plamondon
  served as CEO of the First Merchants Acceptance Corporation, a $750m
  publicly-held financial services company. There he managed the turnaround,
  financial restructuring and sale of the company.

For more than 19 years Mr. Plamondon was with Budget Rent a
  Car. He began his career at Budget in 1978 in Franchise Development. As Vice
  President, Franchised Operations, he built the company's functions in Field
  Operations, Training and Development, and Acquisition and Refranchising,
  managing more than 25 transactions and $350 million in assets.

As Budget transitioned from a franchising to an operating
  company, Mr. Plamondon successfully restructured the Florida operations, the
  company's largest acquisition a $100 million subsidiary. In 1989, he returned to
  Corporate Headquarters as Executive Vice President of Sales and Marketing and
  later EVP North America.

In 1992, at the direction of Ford Motor Company and Budget's
  Board of Directors, Mr. Plamondon was named President of Budget Rent a Car; the
  title of CEO was added the following year. In this capacity, he was responsible
  for acquisitions integration, organizational development, and cost restructuring
  at the $2.5 billion company, whose more than 3200 locations spanned 117
  countries. Mr. Plamondon left Budget in 1997 with the successful sale of the
  company to Team Rental Group.

25

---

Mr. Plamondon has served on the boards of private and public
companies, as well as non-profit organizations. He was a founding member of the
National Tourism Organization and formerly served on the Board of American Car
Rental Association and the International Franchise Association. He currently
serves on the Board of Trustees for North Central College, the Board of
Directors of Protein Polymer Technologies, Inc., and is a 7-year member of the
Executive Advisory Committee for Give Kids the World. Mr. Plamondon is an active
member of the American Bankruptcy Institute and the Turnaround Management
Association. He is an accomplished key-note speaker for organizations and
conventions worldwide.

John L. Ogden, Director

Mr. Ogden has 30 years experience in energy corporate finance, international negotiations, corporate and asset acquisition, business development and energy company management. Since 1995 he has been a principal and managing director of Wood Roberts,
LLC., an energy corporate financial advisory firm based in Houston, Texas. Between 1985 and 1995, he managed an independent corporate financial consulting business specializing in domestic and international energy issues, providing M&A advice,
and strategic corporate financial consulting services. Mr. Ogden graduated from the University of Leeds, England, with a Bachelor of Laws (honors) and is qualified as a Barrister-at-Law in England.

Edward W. Withrow III, Director

Mr. Withrow has over 20 years of experience as a financier, wherein he has developed an expertise in finding small undervalued and under-funded companies and creating value with them. In 1992 Mr. Withrow created Box Office Partners I, II, & III,
  a series of funds that provided off-balance sheet financing for foreign film distributors. In 1994 Mr. Withrow became a pioneer in the development of sell-thru educational entertainment video into grocery stores chains which led to the creation of
  Family Store Entertainment, LLC an educational entertainment company involved in production, licensing, acquisition and distribution of children’s entertainment. In 1998 Mr. Withrow co-founded Simplyfamily.com an Internet based an integrated
  affinity community.

In 2000, Mr. Withrow founded Huntington Chase Financial Group, LLC and Huntington Chase, Ltd. to engage in venture capital and merchant banking activities. From 2000 until the present, Mr. Withrow acquired, restructured, merged, created and was a
  senior advisor to 10 companies. From 2002 to 2004, Mr. Withrow was the CEO of Reward Enterprises, Inc., a public company and early adopter of VOIP telecommunications in the international market with operations in North Africa and India. In 2003 to
  2004 Mr. Withrow founded Symphony Card, LLC a stored value debit card targeting the West African nation of Nigeria in partnership with Fountain Trust Bank, PLC.

From 2004 to 2005, Mr. Withrow became the CEO of Addison-Davis Diagnostics, Ltd, a leading edge point-of-care diagnostic company. From 2005 to present, Mr. Withrow co-founded Eaton Scientific Systems, Ltd., a biotechnology company and co-authored a
  patent pending non-hormonal treatment for women in menopause and post cancer treatments. From 2006 to present, Mr. Withrow was a co-founder of Montecito Bio Sciences, Ltd. an innovative diagnostic company. He is the author of several patents in the
  life sciences space. In 2006 Mr. Withrow became a Managing Director of Orient Financial Group, Ltd a Hong Kong registered financial advisory firm headquartered in Hong Kong with representative offices in Geneva, Delhi and Los Angeles.

Mr. Withrow co-founded Save Our Children a non-profit organization that assisted in fundraising activities for charities that focused on child abuse and since 1999 has been actively involved with Planet Hope a non-profit organization that helps
  homeless mothers and their children.

Edward W. Withrow Jr., Director

Mr. Withrow earned his Masters in Business Administration from
Harvard University, with a concentration in Investment Banking. He has a
bachelors degree in Business, with a concentration in Finance and Accounting,
from the University of Colorado. He served twenty-four years on active duty in
the U.S. Navy as a professional logistician, retiring with the rank of Captain.
He spent approximately 20 years as a financial professional with Drexel Burnham
Lambert, Paine Webber, Merrill Lynch and Wells Fargo.

26

---

Mr. Withrow has been very active in civic leadership for the
past 20 years serving in a number of elected and appointed positions, including
Mayor of Alameda, California. He is currently serving as the regionally elected
President of the Governing Board of The Peralta Colleges, an institution
consisting of 2,000 faculty and staff and approximately 30,000 students.

Shelly J. Meyers, Director

Shelly Meyers has over 20 years of financial and investment
experience. She is Founder and President of Palisades Management LLC, a
Registered Investor Advisor (RIA) that provides investment management services
to high net worth individuals and institutions. The firm also provides strategic
advisory services to corporations pertaining to corporate finance and capital
market activities.

Prior to founding Palisades Management, in June 2007 Ms. Meyers
served as Executive Vice President for Pacific Global Investment Management
Company (PGIMC), where she played an integral role in launching PGIMCs high net
worth management business, merging the separately managed account business of
Meyers Capital Management (MCM) into PGIMC in mid-2003. While at PGIMC, the
Firms high net worth business grew from less than $1,000,000 to approximately
$100,000,000. Ms. Meyers also managed the Pacific Advisor Funds Multi-Cap Value
Fund from inception (April 2002) to a five-year record that beat the S&P 500
on an annualized basis, and which ranked the Fund in the top 10% in its five
year Morningstar peer group.

Ms. Meyers founded MCM and the Meyers Investment Trust in June
1996, and managed the Trusts Meyers Pride Value Fund from inception in June
1996 to September 2001. The Fund was awarded a five star ranking by Morningstar
under her management, and in 2001 Morningstar with Ms. Meyers as manager
recognized the Fund as the #1 large-cap value fund in the United States. The
Meyers Value Fund was sold to Citizens Funds in September 2001 with Ms. Meyers
serving as sub-advisor until October 2002.

From 1993 to 1996, Ms. Meyers served as Assistant
Vice-President at The Boston Company Asset Management, Inc. (BCAM). She acted
as an Assistant Portfolio Manager and equity research analyst for the
institutional investment group in a team responsible for equity investments valued at $10 billion. Prior to that, she served in
the Finance Department at Chevron Corp, and was the first woman sent to
important oil and gas operations throughout Asia and the South Pacific.

Ms. Meyers has often addressed national audiences on investing
issues, with regular appearances on CNBCs Power Lunch, CNN, and
Bloomberg TV. She has also been featured in publications such as The Wall Street
Journal, The New York Times, Investors Business Daily, USA Today, The
Washington Post, Mutual Fund Magazine and Business Week. In 1998, Ms. Meyers was
named to the Board of Trustees for E*Trade Funds, serving until September 2006.
She was elected to the U.S. National Registry of Whos Who, first listed in the
year 2000 edition.

Ms. Meyers received her MBA from Dartmouth Colleges Amos Tuck
School of Business Administration. She received her BA with a major in Political
Science and minor in Economics from the University of Michigan. Ms. Meyers was
issued a CPA license by the state of California in 1990.

Bernhard F.J. Steiner, Director

Mr. Steiner passed away on June 26, 2010 and his position as
director was filled by Dr. Martin A. Blake.

Dr. Martin A. Blake, MBA, BSc, Director

Dr. Blake is a sustainability expert with over 25 years
experience developing strategic plans and influencing high profile stakeholders
within governments, NGOs as well as the postal, construction, healthcare, oil
and gas and charity sectors.

From 2004 to the present, Dr. Blake has been the Head of CSR,
Sustainability and Social Policy for the Royal Mail Group plc, London, UKs
postal service company and largest single employer, with more than 195,000
employees, 14,000 retail outlets and a fleet of 35,000 vehicles.

From 2001 to 2004, Dr. Blake was Director of Change,
Performance and Risk Management of local authority proving public services for
Suffolk Coastal District Council, Suffolk, UK. He successfully designed and
directed the implementation of a major transformational change management
programme.

Since 1988, Dr. Blake has also held the positions of Interim
Managing Director of InterVest Group (BVI) Limited, Bahrain, an international
financial services and venture capital provider and Director of Community
Infrastructure Development for Saudi Arabian Oil Company, KSA, Saudi Arabia, the
largest oil producing, refining and shipping company in the world.

27

---

Erin E. Davis, Corporate Secretary and Vice President of
Marketing and Communications

Ms. Davis has over 20 years of experience in the retail,
restaurant and hospitality, media and travel industries. Specializing in the
fields of communication/public relations/investor relations, mergers and
acquisitions, organizational development, and performance enhancement, she has
increased stakeholder value for both public and private global companies. She
has over 15 years of experience working with companies throughout merger and
acquisition periods, as well as bankruptcy restructuring. Having completed
numerous mergers and acquisitions, she has refined her ability to quickly and
accurately perform assessments and build teams to position companies for
success. As a part of this process and in company restructurings, she has
implemented strategic internal and external communication plans that have
facilitated smooth transitions. Her unique skill set includes expertise in
branding and co-branding to both the marketplace and internal audiences.

From 2005 to 2007 Ms. Davis served as Corporate Secretary and
Vice President of Public Relations for Protein Polymer Technologies, Inc., a
biotechnology company in California. She successfully completed their investor
relations presentations, designed acquisition strategies, and headed up their
public relations and investor relations. She also recently completed an
assignment with Murray, Inc., a manufacturing company, on their pre and post
bankruptcy filing communication and documentation. Prior to that, from 2002 to
2003, she was with ANC Rental Corporation as Vice President of Communications,
leading both internal communication programs and external public relations
including their worldwide franchising system. Ms. Davis has extensive training
and development experience in a variety of big box retail chains and
restaurants. Additionally, she is accomplished in media production work in the
music industry and industrial film arena.

Ms. Davis worked with both financial institutions and
operations executives executing a European insolvency with the German subsidiary
of ANC. Additionally; she played a key role shutting down a failed roll-up with
an international company. She is a certified executive coach, an award winning
seminar speaker, and is an active member of the Turnaround Management
Association and the American Bankruptcy Institute.

Paul Christensen, Vice President of Rental Operations

Mr. Christensen has over 30 years of experience managing both
corporate, franchise and independent operations primarily in the Western United
States. He has served in a number of capacities including Zone and Regional Vice
President and Chief Operating Officer. He has spearheaded numerous acquisitions
of rental car businesses as the firms with whom he was employed executed
consolidation strategies. Mr. Christensen has also owned and operated a
structural steel fabrication and erection business, which he subsequently sold.

Most recently, he managed the day-to-day operations including
fleet management for EV Rental Cars. He spent 13 years with the Hertz
Corporation between 1971 and 1984 managing various locations including Dallas,
New

28

---

Orleans, and Los Angeles Airport ultimately becoming responsible for all Southern California Pool operations at Hertz. As the Bay Area Manager for Budget he oversaw Western Corporate Operations. During this period he assisted in the successful
acquisition of Reno, Monterey, Sacramento, Fresno and a number of local market locations.

As COO for Budget of Southern California Mr. Christensen controlled Budget's largest franchise operation for a six-year period. After the successful sale of this franchise he owned and operated the steel business in the San Francisco Bay Area. From
1997 to 1999, as Western Regional Vice President for DTAG he again was involved in operations and in the acquisitions of San Diego, California, Orange County, California, Denver, Colorado, and Phoenix, Arizona. He reopened the Ontario, California
Airport Operation and tripled the overall California fleet for DTAG during his tenure. Most recently from 2001 to 2003 he worked with the ANC Rental Corporation as General Manager for the Southern California Area.

Mr. Christensen's close involvement with the West coupled with his overall years of operational experience make him a valuable addition to our team. He is member of the American Car Rental Association, completed the internal MBA training program
with Hertz, and is Zenger Miller Course graduate. He is also a Vietnam Era Veteran.

Norman A. Kunin, C.P.A., Chief Financial Officer

Mr. Kunin is a highly skilled financial executive with a wealth of diversified accounting and financial management experience. His professional career encompasses over forty years of financial and accounting expertise. Norman founded Kunin Business
Consulting, a Los Angeles area-based company providing consultancy services for a variety of private and publicly held companies. These services include duties as Interim Chief Financial Officer and/or financial executive, preparation of documents
for filings with the Securities and Exchange Commission, managing the due diligence process for mergers and acquisitions, financial forecasting, business planning and interfacing with lending and capital formation institutions. Mr. Kunin is a
Certified Public Accountant and a member of the American Institute of Certified Public Accountants.

Family Relationships

Other than as described below, there are no family relationships among our directors or executive officers.

Edward W. Withrow, Jr. is the father of Edward W. Withrow III; Erin E. Davis is the wife of William N. Plamondon III.

Involvement in Certain Legal Proceedings

Our directors, executive officers and control persons have not been involved in any of the following events during the past five years:

1. any bankruptcy petition filed by or against any business of
which such person was a general partner or executive officer either at the time
of the bankruptcy or within two years prior to that time;

2. any conviction in a criminal proceeding or being subject to
  a pending criminal proceeding (excluding traffic violations and other minor
  offences);

3. being subject to any order, judgment, or decree, not
  subsequently reversed, suspended or vacated, of any court of competent
  jurisdiction, permanently or temporarily enjoining, barring, suspending or
  otherwise limiting his involvement in any type of business, securities or
  banking activities; or

4. being found by a court of competent jurisdiction (in a civil
  action), the Commission or the Commodity Futures Trading Commission to have
  violated a federal or state securities or commodities law, and the judgment has
  not been reversed, suspended, or vacated.

Section 16(a) Beneficial Ownership Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires
  our executive officers and directors and persons who own more than 10% of our
  common stock to file with the Securities and Exchange Commission initial
  statements of beneficial ownership, reports of changes in ownership and annual
  reports concerning their ownership of our common stock and other equity
  securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and
  greater than 10% shareholders are required by the SEC regulations to furnish us
  with copies of all Section 16(a) reports that they file.

29

---

Based solely on our review of the copies of such forms received
by us, or written representations from certain reporting persons, we believe
that during fiscal year ended December 31, 2010, all filing requirements
applicable to our officers, directors and greater than 10% percent beneficial
owners were complied with.

Audit Committee and Audit Committee Financial Expert

Currently our audit committee consists of Shelly J. Meyers,
John L. Ogden and Edward W. Withrow Jr. Effective August 27, 2009, Shelly Meyers
was appointed chair of the audit committee .We currently do not have
nominating, compensation committees or committees performing similar functions.
There has not been any defined policy or procedure requirements for shareholders
to submit recommendations or nomination for directors.

Our board of directors has determined that Shelly Meyers
qualifies as an "audit committee financial expert" as defined in Item
407(d)(5)(ii) of Regulation S-K, and is "independent" as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the
Securities Exchange Act of 1934, as amended.

During the Calendar Year 2010 aside from quarterly review
  teleconferences, there were no meetings held by this committee. The business of
  the audit committee was conducted though these teleconferences and by
  resolutions consented to in writing by all the members and filed with the
  minutes of the proceedings of the audit committee. Audit Committee meetings were
  held in conjunction with Board of Directors meetings.

|Item 11. | Executive Compensation
|-------- | ----------------------

The particulars of the compensation paid to the following
  persons:

- our principal executive officer;
- each of our two most highly compensated executive officers who were
    serving as executive officers at the end of the years ended December 31, 2010
    and 2009; and
- up to two additional individuals for whom disclosure would have been
    provided under (b) but for the fact that the individual was not serving as our
    executive officer at the end of the years ended December 31, 2010 and 2009,

who we will collectively refer to as the named executive
  officers of our company, are set out in the following summary compensation
  table, except that no disclosure is provided for any named executive officer,
  other than our principal executive officers, whose total compensation did not
  exceed $100,000 for the respective fiscal year:

SUMMARY COMPENSATION TABLEName and Principal Position
      Year
    Salary ($)
      Bonus($)
    Stock **Awards** ($)
    Option **Awards** ($)
    Non-Equity Incentive Plan**Compensation**($)
    Change in Pension Value and Nonqualified Deferred **Compensation** Earnings ($)
    All Other Compensation($)
    Total ($)William N. Plamondon III President, CEO, and Director(1)
      2010 
        2009
      420,000 
        315,000
      None 
        None
      None 
        None
      None 
        None
      None 
        None
      None 
        None
      None 
        None
      420,000 
        315,000John L. Ogden Former President, Chairman and Director(2)
      2010 
        2009
      N/A 
        N/A
      N/A 
        N/A
      N/A 
        N/A
      10,400 
        N/A
      N/A 
        N/A
      N/A 
        N/A
      - 
        2,500
      10,400 
        2,500 30


---

SUMMARY COMPENSATION TABLEName and PrincipalPosition
      Year
      Salary ($)
      Bonus ($)
      Stock Awards($)
      Option**Awards** ($)
      Non-Equity**Incentive
          Plan****Compensation** ($)
      Change in Pension Value and NonqualifiedDeferred **Compensation** Earnings ($)
      All Other Compensation($)
      Total ($)Edward W. Withrow III, Chairman of the Board and Director(3)
      2010 
        2009
      155,000 
        165,000
      None 
        None
      None 
        None
      None 
        None
      None 
        None
      None 
        None
      None 
        None
      155,000 
        165,000Norman A. Kunin, Chief Financial Officer (4)
      2010
      59,000
      None
      None
      6,500
      None
      None
      None
      55,000


|(1) | William N. Plamondon III became our president, chief
      executive officer and director on July 2, 2009.                                                                                                                                             
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | John L. Ogden was appointed president and as a director
      of our company on March 3, 2008 and was appointed Chairman upon his
      resignation as president on June 20, 2008. On July 2, 2009, Mr. Ogden
      resigned as chairman and president.
|(3) | Edward W. Withrow III is the Founder and Chairman of the
      Board for Ecologic Transportation, Inc.                                                                                                                                                 
|(4) | Norman A. Kunin became our chief financial officer on
      July 1, 2010.                                                                                                                                                                              

Stock Options/SAR Grants

During the year ended December 31, 2010, we granted the
  following stock options to directors and officers:

On June 30, 2010, Edward W. Withrow, Jr. was granted an option
  under the Companys 2009 Stock Option Plan adopted effective September 2009 to
  purchase 80,000 shares of the Companys common stock at a price of $0.473 per
  share.

On June 30, 2010, John L. Ogden was granted an option under the
  Companys 2009 Stock Option Plan adopted effective September 2009 to purchase
  80,000 shares of the Companys common stock at a price of $0.473 per share.

On June 30, 2010, Norman A. Kunin was granted an option under
  the Companys 2009 Stock Option Plan adopted effective September 2009 to
  purchase 50,000 shares of the Companys common stock at a price of $0.473 per
  share.

On June 30, 2010, Shelly J. Meyers was granted an option under
  the Companys 2009 Stock Option Plan adopted effective September 2009 to
  purchase 80,000 shares of the Companys common stock at a price of $0.473 per
  share.

On June 30, 2010, Paul Christensen was granted an option under
  the Companys 2009 Stock Option Plan adopted effective September 2009 to
  purchase 50,000 shares of the Companys common stock at a price of $0.473 per
  share.

Aggregated Option Exercised in Last Fiscal Year and Fiscal
  Year-End Values

There were no options exercised during our fiscal year ended
  December 31, 2010 or December 31, 2009 by any officer or director of our
  company.

Outstanding Equity Awards at Fiscal Year End

On June 30, 2010 the Company, under its 2009 Stock Option Plan,
  granted qualified stock options to purchase 435,000 shares of its common stock
  for five year at $0.473 per share. Of the total options granted, 240,000 were
  granted to three members of the Board of Directors, 120,000 of which vest on
  July 2, 2010 and 120,000 of which vest on July 2, 2011 and 195,000 were granted
  to four consultants, all of which vest on July 2, 2010. The value of the options
  using the Black-Scholes valuation method is $0.13 per share or $56,550. The
  120,000 Directors options vesting at any time after July 2, 2010 were valued at
  $15,600 and were expensed on the books of the Company at June 30, 2010. The
  120,000 Directors options vesting on or after July 2, 2011 were recorded on the
  books as prepaid expense of $15,600 as of June 30, 2010. The 195,000
  Consultants options vesting at any time after July 2, 2010 were valued at
  $25,350 and were expensed on the books of the Company as at June 30, 2010. The
  Company used the following assumptions in valuing the options: expected
  volatility 33%; expected term 5 years; expected dividend yield 0%, and risk-free
  interest rate of 1.49% .

31

---

Compensation of Directors

We reimburse our directors for expenses incurred in connection
  with attending board meetings. We have not paid any director's fees or other
  cash compensation for services rendered as a director since our inception to
  December 31, 2010.

We have no formal plan for compensating our directors for their
  service in their capacity as directors, however, our directors and certain
  officers have received stock options to purchase common shares under the
  Companys 2009 Stock Option Plan and may receive additional stock options at the
  discretion of our board of directors or (as to future stock options) a
  compensation committee which may be established under the Plan in the future.
  Directors are entitled to reimbursement for reasonable travel and other
  out-of-pocket expenses incurred in connection with attendance at meetings of our
  board of directors. Our board of directors may award special remuneration to any
  director undertaking any special services on our behalf other than services
  ordinarily required of a director. No director received and/or accrued any
  compensation for their services as a director, including committee participation
  and/or special assignments.

Employment Contracts and Termination of Employment and
  Change in Control Arrangements

We have not entered into any employment agreement or consulting
  agreement with our directors and executive officers except for the Employment
  agreement dated January 30, 2009 between our company and Mr. Plamondon
  (incorporated by reference from our Current Report on Form 8-K filed on July 9,
  2009) and the Advisory agreement dated July 1, 2010 between our company and
  Kunin Business Consulting, a division of Ace Investors, LLC for the services of
  Norman A. Kunin as Chief Financial Officer (incorporated by reference from our
  Quarterly Report on Form 10-Q filed on August 16, 2010.)

There are no arrangements or plans in which we provide pension,
  retirement or similar benefits for directors or executive officers. Our
  directors and certain officers have received stock options under the Companys
  2009 Stock Option Plan and may receive additional stock options at the
  discretion of our board of directors under the Plan in the future. We do not
  have any material bonus or profit sharing plans pursuant to which cash or
  non-cash compensation is or may be paid to our directors or executive officers,
  except that stock options may be granted at the discretion of our board of
  directors.

The Companys employment agreement with William Plamondon, our
  chief executive officer, contains certain terms with respect to remuneration
  received or that may be received in the event of termination of employment (as a
  result of resignation, retirement, change of control) or a change of
  responsibilities following a change of control, where the value of such
  compensation exceeds $60,000. Mr. Plamondons employment agreement is included
  in this filing as Exhibit Number 10.1  Material Contracts.

|Item 12. | Security Ownership of Certain
      Beneficial Owners and Management and **Related Stockholder
        Matters**
|-------- | ----------------------------------------------------------------------------------------------------------------

The following table sets forth, as of March 25, 2011, certain information with respect to the beneficial ownership of our common stock by each stockholder known by us to be the beneficial owner of more than 5% of our common stock and by each of our
current directors and executive officers. Each person has sole voting and investment power with respect to the shares of common stock, except as otherwise indicated. Beneficial ownership consists of a direct interest in the shares of common stock,
except as otherwise indicated.

32

---

Name and Address of Beneficial Owner
      Amount and Nature of Beneficial Ownership
      Percentage of Shares of Common Stock(1)William N. Plamondon III 
        4240 Galt Ocean Drive Ste. 404 
        Fort Lauderdale, FL 33308
      4,059,750
      17.2%John L. Ogden 
        675 Bering Drive Suite 675 
        Houston,
        TX 77057
      477,500 (2)
      2.1%Edward W. Withrow III 
        1327 Ocean Ave. Suite B 
        Santa
        Monica, CA 90401
      3,713,741
      15.7%Edward W. Withrow Jr. 
        133 Cumberland Way 
        Alameda,
        CA 94502
      50,000
      *Shelly J. Meyers 
        860 Via de la Paz Suite E-3A 
        Pacific Palisades, CA 90272
      500,000
      2.1%Erin E. Davis 
        4240 Galt Ocean Drive Ste. 404 
        Fort
        Lauderdale, FL 33308
      1,000,000
      4.2%Norman A. Kunin 
        1390 Redsail Circle 
        Westlake
        Village, CA 91361
      50,000
      *Dr. Martin A. Blake 
        Harbour House 
        40 Findhorn 
        Forres 
        IV363YE, Scotland
      -0-
      -0-


|Directors and Officers as a Group |           |      
|--------------------------------- | --------- | -----
|(7 individuals)                   | 9,850,991 | 41.5%

|* represents an amount less than one percent                                                                                                                                                                                                                                                                                                         
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                     
|(1)Based on 23,812,824 shares outstanding as of March 31, 2011.  (2) As of December 31, 2010 Mr. Ogden                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                     
|(2) As of December 31, 2010 Mr. Ogden owned 100% of the issued and outstanding stock of Chapelco, Inc., (“Chapelco”) a corporation that owned 266,666 shares of common stock of the Company.  On March 18, 2011 Chapelco was dissolved and on March 22, 2010 its ownership of the Company’s common stock was transferred from Chapelco to John Ogden.

Changes in Control

We are unaware of any contract or other arrangement or
  provisions of our Articles or Bylaws the operation of which may at a subsequent
  date result in a change of control of our company. There are not any provisions
  in our Articles or Bylaws, the operation of which would delay, defer, or prevent
  a change in control of our company.

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

Except as disclosed herein, there have been no transactions or
  proposed transactions in which the amount involved exceeds the lesser of
  $120,000 or one percent of the average of our total assets at year-end for the
  last three completed fiscal years in which any of our directors, executive
  officers or beneficial holders of more than 5% of the outstanding shares of our
  common stock, or any of their respective relatives, spouses, associates or
  affiliates, has had or will have any direct or material indirect interest.

Director Independence

We currently act with six directors, consisting of William N. Plamondon III, John L. Ogden, Edward W. Withrow III, Edward W. Withrow Jr., Shelly J. Meyers and Dr. Martin A. Blake. We have determined that Shelly J. Meyers and Dr. Martin A. Blake are “independent directors” as defined in NASDAQ Marketplace Rule 4200(a)(15

33

---



|Item 14. | Principal Accountants Fees and
      Services
|-------- | ---------------------------------------------

The aggregate fees billed or to be billed for the most recently
  completed fiscal year ended December 31, 2010 and for fiscal year ended December
  31, 2009 for professional services rendered by the principal accountant for the
  audit of our annual financial statements and review of the financial statements included in our quarterly reports
on Form 10-Q and services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for these fiscal
periods were as follows:

Year EndedDecember 31, 2010 $
      December 31, 2009 $Audit Fees
      35,704
      18,370Audit Related Fees
      0
      6,500Tax Fees
      5,000
      5,000All Other Fees
      0
      NilTotal
      40,704
      29,870


Our board of directors pre-approves all services provided by
  our independent auditors. All of the above services and fees were reviewed and
  approved by the board of directors either before or after the respective
  services were rendered.

Our board of directors has considered the nature and amount of
  fees billed by our independent auditors and believes that the provision of
  services for activities unrelated to the audit is compatible with maintaining
  our independent auditors independence.

PART IV

|Item 15. | Exhibits, Financial Statement
      Schedules
|-------- | ---------------------------------------------

Exhibits required by Item 601 of Regulation S-B

|Exhibit Number | Description                                                                                                                                                                                                                                
|-------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |                                                                                                                                                                                                                                            
|(3)            | Articles of
      Incorporation and Bylaws                                                                                                                                                                                                 
|               |                                                                                                                                                                                                                                            
|3.1            | Articles of
      Incorporation (incorporated by reference to our registration statement on
      form SB-2 filed on November 30, 2006).                                                                                                   
|               |                                                                                                                                                                                                                                            
|3.2            | Bylaws
      (incorporated by reference to our registration statement on form SB-2
      filed on November 30, 2006).                                                                                                                      
|               |                                                                                                                                                                                                                                            
|3.3            | Certificate of
      Change filed with the Secretary of State of Nevada on April 2, 2008
      (incorporated by reference from our Current Report on Form 8-K filed on
      April 21, 2008).                                              
|               |                                                                                                                                                                                                                                            
|3.4            | Articles of
      Merger (incorporated by reference from our Current Report on Form 8-K
      filed on June 26, 2008).                                                                                                                     
|               |                                                                                                                                                                                                                                            
|3.5            | Certificate of
      Change filed with the Secretary of State of Nevada on August 29, 2008 with
      respect to the reverse stock split (incorporated by reference from our
      Current Report on Form 8-K filed on September 17, 2008).
|               |                                                                                                                                                                                                                                            
|3.6            | Articles of
      Merger (incorporated by reference from our Current Report on Form 8-K
      filed on June 11, 2009).                                                                                                                     

34

---

|Exhibit Number | Description                                                                                                                                                                                                                                                                                                           
|-------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |                                                                                                                                                                                                                                                                                                                       
|3.7            | Certificate of Change filed
      with the Secretary of State of Nevada on May 15, 2009 with respect to the
      reverse stock split (incorporated by reference from our Current Report on
      Form 8-K filed on June 11, 2009).                                                                                   
|               |                                                                                                                                                                                                                                                                                                                       
|3.8            | Articles of Merger filed with
      the Secretary of State of Nevada on June 2, 2009 with respect to the
      merger between our wholly owned subsidiary, Ecological Acquisition Corp.
      and Ecologic Sciences, Inc. (incorporated by reference from our Current
      Report on Form 8-K filed on July 9, 2009).
|               |                                                                                                                                                                                                                                                                                                                       
|(10)           | Material Contracts                                                                                                                                                                                                                                                                                                    
|               |                                                                                                                                                                                                                                                                                                                       
|10.1           | Agreement and Plan of Merger
      dated April 26, 2009 (incorporated by reference from our Current Report on
      Form 8-K filed on April 30, 2009).                                                                                                                                                                
|               |                                                                                                                                                                                                                                                                                                                       
|10.2           | Employment agreement dated
      January 30, 2009 between our company and Mr. Plamondon (incorporated by
      reference from our Current Report on Form 8-K filed on July 9, 2009).                                                                                                                                  
|               |                                                                                                                                                                                                                                                                                                                       
|10.3           | Agreement dated April 28, 2009
      between our company and Audio Eye, Inc. (incorporated by reference from
      our Current Report on Form 8-K filed on July 9, 2009).                                                                                                                                             
|               |                                                                                                                                                                                                                                                                                                                       
|10.4           | Agreement dated May 15, 2009
      between our company and Audio Eye, Inc. (incorporated by reference from
      our Current Report on Form 8-K filed on July 9, 2009).                                                                                                                                               
|               |                                                                                                                                                                                                                                                                                                                       
|10.5           | Employment agreement dated June
      29, 2009 between our company and Mr. Keppler. (incorporated by reference
      from our Current Report on Form 8-K filed on July 9, 2009).                                                                                                                                      
|               |                                                                                                                                                                                                                                                                                                                       
|10.6           | Memorandum of Understanding
      dated May 12, 2009 between our company and Green Solutions &
      Technologies, LLC (incorporated by reference from our Current Report on
      Form 8-K filed on July 9, 2009).                                                                                                   
|               |                                                                                                                                                                                                                                                                                                                       
|10.7           | Form of debt settlement
      subscription agreement dated July 1, 2009 between our company and John L.
      Ogden (incorporated by reference from our Current Report on Form 8-K filed
      on July 9, 2009).                                                                                                      
|              
|10.8           | Service Agreement dated
      September 24, 2009 between Ecologic Products, Inc. and Park N Fly
      Inc.  (incorporated by reference from our Current Report on Form
      8-K filed on September 29, 2009).                                                                                                       
|               |                                                                                                                                                                                                                                                                                                                       
|10.9           | Agreement
      dated September 29, 2009 between Ecologic Transportation, Inc. and North
      Sea Securities LP.   (incorporated by reference from our Annual Report on Form
      10-K filed on April 14, 2010).                                                                                                    
|               |                                                                                                                                                                                                                                                                                                                       
|10.10          | Consulting
      Agreement with Matrix Advisors, LLC dated October 1, 2009 (incorporated by reference from our Annual Report on Form
      10-K filed on April 14, 2010).                                                                                                                                             
|               |                                                                                                                                                                                                                                                                                                                       
|10.11          | Consulting
      Agreement with Huntington Chase for Advisory Services dated October 12,
      2009. (incorporated by reference from our Annual Report on Form
      10-K filed on April 14, 2010).                                                                                                                   
|               |                                                                                                                                                                                                                                                                                                                       
|10.12          | Agreement
      dated November 23, 2010 with BMO Capital Markets                                                                                                                                                                                                                                                      
|               |                                                                                                                                                                                                                                                                                                                       
|(21)           | Subsidiaries of the
      Registrant                                                                                                                                                                                                                                                                                  

|21.1  | Ecological Products, Inc.                                  
|----- | -----------------------------------------------------------
|      | Ecologic Car Rentals, Inc.                                 
|      | Ecologic Systems, Inc.                                     
|      |                                                            
|(31)  | Section 302
      Certifications                           
|      |                                                            
|31.1* | Section
      302 Certification of William N. Plamondon III
|      |                                                            
|31.2* | Section
      302 Certification of Norman Kunin            
|      |                                                            
|(32)  | Section 906
      Certifications                           
|      |                                                            
|32.1* | Section
      906 Certification of William N. Plamondon III
|      |                                                            
|32.2* | Section
      906 Certification of Norman Kunin            

*Filed herewith.

35

---



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.

|                      | ECOLOGIC TRANSPORTATION, INC.                                
|--------------------- | -------------------------------------------------------------
|                      |                                                              
|                      |                                                              
|Dated: March 31, 2011 | /s/
      William N. Plamondon III                           
|                      | William N. Plamondon III                                     
|                      | President, Chief Executive Officer, and
      Director       
|                      | (Principal Executive Officer)                                
|                      |                                                              
|                      |                                                              
|Dated: March 31, 2011 | /s/ Norman Kunin                                             
|                      | Norman Kunin                                                 
|                      | CFO                                                          
|                      | (Principal Financial Officer and Principal Financial Officer)

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

|Dated: March 31, 2011 | /s/
      William N. Plamondon III                    
|--------------------- | ------------------------------------------------------
|                      | William N. Plamondon III                              
|                      | President, Chief Executive Officer, and
      Director

| | (Principal Executive Officer)
| | -----------------------------

|Dated: March 31, 2011 | /s/
      John Ogden                                           
|--------------------- | ---------------------------------------------------------------
|                      | John L. Ogden                                                  
|                      | Director                                                       
|                      |                                                                
|                      |                                                                
|Dated: March 31, 2011 | /s/
      Edward W. Withrow III                                
|                      | Edward W. Withrow III                                          
|                      | Director                                                       
|                      |                                                                
|                      |                                                                
|Dated: March 31, 2011 | /s/
      Edward W. Withrow Jr.                                
|                      | Edward W. Withrow Jr.                                          
|                      | Director                                                       
|                      |                                                                
|                      |                                                                
|Dated: March 31, 2011 | /s/
      Shelly J. Meyers                                     
|                      | Shelly J. Meyers                                               
|                      | Director                                                       
|                      |                                                                
|                      |                                                                
|Dated: March 31, 2011 | /s/
      Martin Blake                                         
|                      | Martin Blake                                                   
|                      | Director                                                       
|                      |                                                                
|                      |                                                                
|Dated: March 31, 2011 | /s/
      Norman Kunin                                         
|                      | Norman Kunin                                                   
|                      | CFO                                                            
|                      | (Principal Financial Officer and Principal Accounting  Officer)

36

---