U. S.
Securities and Exchange Commission  Washington, D. C. 20549  FORM
10-KSB  [X] ANNUAL REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the fiscal year ended December 31, 2007  [ ] TRANSITION REPORT UNDER SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the transition period from
__________________ to __________________   Commission File No. - 001-08397  REFLECT SCIENTIFIC, INC. (Name of Small Business Issuer in its
Charter)  Utah
87-0642556(State or Other Jurisdiction of
(I.R.S. Employer Identification
No.)incorporation or organization)  1270 South 1380 West Orem, Utah 84058 (Address of Principal Executive Offices)  Issuers Telephone Number: (801)
226-4100  Securities registered under Section 12(b) of
the Act: None Name of Each Exchange on Which Registered:
None  Securities registered under Section 12(g) of
the Act:  $0.01 par value common stock Title of Class  Check whether the Issuer is not required to file reports
pursuant to Section 13 or 15(d) of the Exchange Act. [  ]  Check whether the Issuer (1) filed all
reports required to be filed by Section 13 or 15(d) of the Exchange Act during
the past 12 months (or for such shorter period that the Issuer was required to
file such reports), and (2) has been subject to such filing requirements for the
past 90 days. (1) Yes [X] No     (2) Yes [X] No  Check if there is no disclosure of
delinquent filers in response to Item 405 of Regulation S-B contained in this
form, and no disclosure will be contained, to the best of Issuers knowledge, in
definitive proxy or information statements incorporated by reference in Part III
of this Form 10-KSB or any amendment to this Form 10-KSB. [  ]  Indicate by check mark whether the Issuer
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X]  State Issuers revenues for its most recent
fiscal year: December 31, 2007 - $8,020,266.  State the aggregate market value of the
voting and non-voting common stock held by non-affiliates computed by reference
to the price at which the common stock was sold, or the average bid and asked
price of such common stock, as of a specified date within the past 60 days.  There are approximately 15,887,288 shares
of common voting stock of the Issuer held by non-affiliates, and based upon the    average bid and asked prices of our common
stock on April 3, 2008 of $0.70, as reported by the OTC Bulletin Board of the
National Association of Securities Dealers, Inc., the aggregate market value of
our common stock held by non-affiliates was approximately $11,121,102.  Issuers Involved in Bankruptcy
Proceedings During the Past Five Years  None; not applicable.  Check whether the Issuer has filed all
documents and reports required to be filed by Section 12, 13 or 15(d) of the
Exchange Act after the distribution of securities under a plan confirmed by a
court. Yes [  ] No [  ]  Not applicable.  Applicable Only to Corporate Issuers  State the number of shares outstanding of
each of the Issuers classes of common equity, as of the latest practicable
date:  April 3, 2008:  Common  34,195,153  Documents Incorporated by Reference  A description of Documents Incorporated by Reference is
contained in Part III, Item 13, of this Annual Report.  Transitional Small Business Issuer Format
Yes [  ] No [X]     TABLE OF CONTENTS  PART
I 4 Item 1.
Description of Business 4 Item 2.
Description of Property 11 Item 3.
Legal Proceedings 11 Item 4.
Submission of Matters to a Vote of Security Holders 11 PART
II 11 Item 5.
Market for Common Equity and Related Stockholder Matters and Small Business
Issuer Purchases of Equity Securities.11 Item 6.
Managements Discussion and Analysis or Plan of Operation 14 Item 7.
 Financial Statements 17 Item 8.
Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure   17  Item
8(A)T. Controls and Procedures. 17 Managements
Annual Report on Internal Control Over Financial Reporting 17 Item
8(B). Other Information. 18 PART
III 18 Item 9.
Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act18 Item 10.
Executive Compensation 21 Item 11.
Security Ownership of Certain Beneficial Owners and Management 22 Item 12.
Certain Relationships and Related Transactions 23 Item 13.
Exhibits 24 Item 14.
Principal Accounting Fees and Services 25 SIGNATURES 25        PART I    Item 1. Description of Business  Business Development  General  Reflect Scientific, Inc., a Utah corporation (the
Company, we, our, us and words of similar import), was organized under
the laws of the State of Utah on November 3, 1999, under the name Cole, Inc.
 On December 31, 2003, we acquired Reflect Scientific, Inc., a California
corporation and currently our wholly-owned subsidiary (Reflect California),
changed our name to Reflect Scientific, Inc. and succeeded to the business
operations of Reflect California, that involved the manufacture and distribution
of unique laboratory consumables and disposables such as filtration and
purification products, customized sample handling vials, electronic wiring
assemblies, high temperature silicone, graphite and vespel/graphite sealing
components for use by original equipment manufacturers (OEM) in the chemical
analysis industries, primarily in the field of gas/liquid chromatography.
 See our 8-K Current Report dated December 31, 2003, which was filed with
the Securities and Exchange Commission on January 15, 2004, and is incorporated
herein by reference.  See Part III, Item 13.  December 31, 2005  On November 29, 2005, we announced the execution of a
Letter of Intent to acquire Cryomastor Corporation, a California corporation
(Cryomastor [sometimes called Cryometrix, its amended name).  December 31, 2006  Effective as of April 4, 2006, we entered
into a Purchase Agreement (the JMST Agreement) with JM SciTech, LLC, a limited
liability company organized under the laws of the State of Colorado, and doing
business as JMST Systems (JMST); David Carver, an individual (Carver); and
Julie Martin, an individual (Martin)(JMST, Carver and Martin are sometimes
hereinafter referred to collectively as Sellers).  Pursuant to the JMST
Agreement, we purchased and JMST sold all right, title and interest in and to
the JMST Technology (the JMST Technology), as described in the JMST Agreement;
and Carver conveyed and assigned any rights he had in and to certain patents
(the Carver Patents) and related intellectual assets as described in the JMST
Agreement (collectively, including the Carver Patents ,referred to herein as the
Carver Technology).  JMST had created a line of chemical detection
instruments that are used in the pharmaceutical, biotechnology and homeland
security markets. The patented technology allows researchers to accurately
analyze chemical formulations for their composition and identity.
  See our 8-K Current Report dated April 4, 2006, which was filed with
the Securities and Exchange Commission on April 7, and is incorporated herein by
reference.  See Part III, Item 13.  On June 27, 2006, we completed the
acquisition of Cryomastor pursuant to an Agreement and Plan of Merger (the
Cryomastor Merger Agreement), which became our wholly-owned subsidiary;
changed its name to Cryometrix, Inc.; and succeeded to its business
operations, which involved the manufacture and sale of ultra low temperature
freezers systems powered by liquid nitrogen for use in bio-repositories
associated with the biotech and pharmaceutical industries, as well as government
facilities, universities and many other diverse applications that require a
large number of reliable and energy efficient freezers.  See our 8-K
Current Report dated June 27, 2006, which was filed with the Securities and
Exchange Commission on June 30, 2006, and is incorporated herein by reference.
 See Part III, Item 13.  On November 15, 2006, we entered into an
Agreement and Plan of Merger (the Image Labs Merger Agreement) between Image
Acquisition Corp., a Georgia corporation and our wholly-owned subsidiary
(Merger Subsidiary); Smithgall & Associates, Inc., dba Image Labs
International, a Georgia corporation (Image Labs); and Brian Smithgall
(Smithgall), the sole shareholder of Image Labs (the Image Labs
Shareholder).  Established in 1993 and located in Bozeman, Montana, Image
Labs is a manufacturer and developer of factory automation equipment. The
primary product lines focus in the areas of automated inspection, measurement
and material handling.  See our 8-K Current Report dated November 15, 2006,
which was filed with the Securities and Exchange Commission on November 21,
2006, and is incorporated herein by reference.  See Part III, Item 13.  On November 17, 2006, we entered into an
Agreement and Plan of Merger (the The All Temp Merger Agreement) between our
wholly-owned subsidiary,  Cryometrix, Inc. (Merger Subsidiary); All Temp
Engineering Inc., a California corporation (All Temp); J F Dain & E L Dain
CO   T Tee Dain Family Revocable Trust U/A Dated 12/17/2001 (the Dain
Trust) and Nicholas J. Henneman (Henneman), the sole All Temp Shareholders
(collectively, the All Temp Shareholders); and John F. Dain, individually
(Dain).   All Temp is located in San Jose, California and has been
providing engineered solutions and services to the cryogenics industry for over
23 years.  All Temp serves over 1,450 companies in business sectors such as
biotech, pharmaceutical, medical devices, research, universities, semiconductor,
 aerospace, military and industrial food    processing.  See our 8-K Current
Report dated November 17, 2006, which was filed with the Securities and Exchange
Commission on November 22, 2006, and is incorporated herein by reference.
 See Part III, Item 13.  December 31, 2007  Effective January 19, 2007, the All Temp
Merger Agreement was completed.  See our 8-K Current Report dated November
17, 2006, which was amended on January 23, 2007, and is incorporated herein by
reference.  See Part III, Item 13.  Effective February 28, 2007, the Image Labs
Merger Agreement was completed.  See our 8-K Current Report dated November
15, 2006, which was amended on March 6, 2007, and is incorporated herein by
reference.  See Part III, Item 13.  On June 29, 2007, we completed the sale of
$2,500,000 of debentures.  See our 8-K Current Report dated July 2, 2007,
and is incorporated herein by reference.  See Part III, Item 13.  Business  Overview  Reflect Scientific is engaged in the
manufacture and distribution of innovative products targeted at the life science
market. Our customers include hospitals and diagnostic laboratories,
pharmaceutical and biotech companies, universities, government and private
sector research facilities as well as chemical and industrial companies.  Our goal is to provide our customers with
the best solution for their needs. This philosophy extends into our business
strategies and acquisition plans. Through a series of strategic acquisitions in
2006 and 2007, we now offer a greatly expanded line of products that take
advantage of market needs. Our growing product portfolio includes ultra low
temperature freezers and chemical detectors, in addition to supplying OEM
products to the life science industry.  Our Visacon brand chemical detectors
provide our OEM customers a cost effective detection product that allows them to
extend their markets. Detectors use patented optical detection technologies that
can be tailored for pharmaceutical, biotechnology or other life science
applications.  Our Cryometrix brand ultra low temperature
freezers innovative design enables our customers to save substantially on energy
costs related to cryogenic storage. Ultra low temperature freezers are used
world wide for the storage of vaccines, DNA, RNA, proteins and many other
biological and chemical samples. There is a growing need for energy efficient,
reliable ultra low temperature storage units.  We will continue to expand
into this growing market with the Cryometrix freezer.  Organization  Reflect Scientific was organized under the
laws of the State of Utah on November 3, 1999, under the name Cole, Inc.
 On December 31, 2003, we acquired Reflect Scientific, Inc., a California
corporation and currently our wholly-owned subsidiary, changed our name to
Reflect Scientific, Inc. and succeeded to the business operations of Reflect
Scientific, Inc., that involved the manufacture and distribution of laboratory
consumables and disposables such as filtration and purification products,
customized sample handling vials, electronic wiring assemblies, high temperature
silicone, graphite and vespel/graphite sealing components for use by original
equipment manufacturers (OEM) in the chemical analysis industries, primarily
in the field of gas/liquid chromatography.  On November 29, 2005, we announced the
execution of a Letter of Intent to acquire Cryomastor Corporation, a California
corporation (Cryomastor [sometimes called Cryometrix, its amended name). On
June 27, 2006, we completed the acquisition of Cryomastor pursuant to an
Agreement and Plan of Merger (the Cryomastor Merger Agreement), which became
our wholly-owned subsidiary; changed its name to Cryometrix, Inc.; and
succeeded to its business operations, which involved the manufacture and sale of
ultra low temperature freezers systems powered by liquid nitrogen for use in
bio-repositories associated with the biotech and pharmaceutical industries, as
well as government facilities, universities and many other diverse applications
that require a large number of reliable and energy efficient freezers.  Effective as of April 4, 2006, we entered
into a Purchase Agreement (the JMST Agreement) with JM SciTech, LLC, a limited
liability company organized under the laws of the State of Colorado, and doing
business as JMST Systems (JMST).  Pursuant to the JMST Agreement, we
purchased and JMST sold all right, title and interest in and to the JMST
Technology (the JMST Technology), as described in the JMST Agreement; and
David Carver, a shareholder of JMST (Carver), conveyed and assigned any rights
he had in and to certain patents (the Carver Patents) and related intellectual
assets as described in the JMST Agreement (collectively, including the Carver
Patents referred to herein as the Carver Technology).  JMST had created a
line of chemical detection instruments that are used in the pharmaceutical,
biotechnology and homeland    security markets. The patented technology
allows researchers to accurately analyze chemical formulations for their
composition and identity.  On November 15, 2006, we entered into an
Agreement and Plan of Merger (the Image Labs Merger Agreement) to acquire
Image Acquisition Corp., a Georgia corporation by our wholly-owned subsidiary;
Smithgall & Associates, Inc., dba Image Labs International, a Georgia
corporation (Image Labs).  Established in 1993 and located in Bozeman,
Montana, Image Labs is a manufacturer and developer of factory automation
equipment. The primary product lines focus in the areas of automated inspection,
measurement and material handling.  Effective February 28, 2007, the Image
Labs Merger Agreement was completed.  On November 17, 2006, we entered into an
Agreement and Plan of Merger (the The All Temp Merger Agreement) between our
wholly-owned subsidiary,  Cryometrix, Inc. and All Temp Engineering Inc., a
California corporation (All Temp).  All Temp is located in San Jose,
California and has been providing engineered solutions and services to the
cryogenics industry for over 23 years.  All Temp serves over 1,450
companies in business sectors such as biotech, pharmaceutical, medical devices,
research, universities, semiconductor, aerospace, military and industrial food
processing.  Effective January 19, 2007, the All Temp Merger Agreement was
completed.  Business  Reflect Scientific designs, develops and
sells scientific equipment for the Life Science and Manufacturing industries.
 Since our wholly owned subsidiary, Reflect Scientifics, organization in
1991, our focus is and has been on providing value added products, analytic
testing equipment and stand alone products for the life science and industrial
market place.  Reflect Scientifics products range from non-mechanical
CyrometrixTM freezers, products and parts for life science industry to tools and
analytical services for industrial manufacturing.  All of Reflect Scientifics products and
services are developed with one key factor in mind-do they provide a superior
cost/benefit to the customer than other products in the same marketspace.
 With years of experience in the life science and industrial manufacturing
markets, Reflect Scientific has been able to develop not only unique patentable
products but products that we believe offer immediate advantages and cost
savings over any other competing and existing products on the market.  We have developed a business model with a
focus on intellectual expertise in design and development of products and
solutions for life science and industrial manufacturing industries.  We
outsource the majority of our manufacturing allowing us to maintain flexibility
to develop products across multiple lines and industries.  Our strength is
in providing products which we believe offer immediate verifiable cost saving
solutions.  We have found many companies that can manufacture
products to our specification allowing us to focus on our core competencies of
development and design and maintain a flexible corporate structure capable of
taking advantage of new opportunities without the large capital investment for
tooling and manufacturing equipment.  This focus on the intellectual
expertise as opposed to manufacturing of products also allows us to develop
products along multiple industries and to tailor our products to specific needs
in a variety of industrial settings.  Our products are sold in the
biotechnology, pharmaceutical, medical industries as well as the manufacturing
industries such as automotive.  PRODUCTS  Cryometrix Freezers  Our Cryometrix ultra low temperature
freezers are, we believe, a technological breakthrough that provides energy
savings and other critically important benefits to cryo-storage customers in the
Life Science related industries.  Ultra low temperature freezers are used
in multiple industries for the storage of everything from blood to cancer
vaccines.  These freezers are used by companies and organizations like the
Red Cross, hospitals and biotechnology research facilities.  Currently, the only ultra low temperature
freezers are produced by only a few companies and rely on a mechanical process
for cooling.  Because of inadequacies in the mechanical process, we believe
there is wastage of inventory each year because of the problems of proper
cooling found in the mechanical freezers.  Our freezers are a complete divergence from
the current technology used in ultra low temperature freezers.  Through the
advantages of our technology, we believe, our freezers solve the current
inadequacies resulting in immediate cost savings for our clients.
  Current cryogenic storage equipment falls short of customer
expectations in a variety of key performance criteria. § High energy usage  a growing problem
with rising energy costs    § Inflexible temperature range 
existing units cannot be easily modified for colder requirements (colder
temperatures are an industry trend) § Sample inventory is at risk in the
event of a power failure § Poor
temperature uniformity samples in different areas of the freezer can experience
wide variations in temperatures which is undesirable from a regulatory
standpoint. Our Cryometrix ultra low temperature
freezer uses a new patented design which is powered by liquid nitrogen. Through
the use of a liquid nitrogen powered freezer system we are able to address the
market need for:  § Low energy requirements § Flexible temperature
control  wide range of usable temperatures § Power failures have
little effect - uses passive liquid nitrogen technology rather than electrically
powered compressors. § Uniform temperatures
throughout freezer  more usable storage volume § Much larger storage
volume per area of floor space occupied  reduced facilities cost § Reliable and essentially maintenance free; further lowering cost
of ownership We believe existing freezers are outdated
and our freezers will be the direction the industry will move offering us a
chance to gain a significant market share in this large market.  Detectors  Our chemical detector products serve the
analytical instrumentation sector of the Life Sciences market. These optically
based chemical detection instruments provide a cost-effective, high-performance
alternative for original equipment manufacturers (OEM).   One major
use for these detectors is the analysis of whole blood for metabolic diseases.  Companies that manufacture beneficial
chemicals or biotechnology products are often required to develop a methodology
to detect their presence in the environment or in living tissue. Recent market
trends have been toward the creation of a dedicated system that is specific for
a particular chemical.  As the market expands for dedicated
instrumentation, certain critical issues arise. § Lack of high quality,
high performance OEM instrumentation - large instrument manufacturers sell the
service/instrument combination only under their own brand name § High price points - instrument company structure does not allow
value pricing Our products provide the building blocks to
create such a system. Patented technology provides an array of benefits to the
OEM customer. § High performance
instrumentation - meets or exceeds industry standards for chemical detection § Technological breakthroughs provide
cost-effective detection instrument solutions § Versatile
configurations allow tailoring to specific customer need without the necessity
for expensive custom engineering § Certified by
various regulatory agencies for sale worldwide With the expanding focus on the need for
detectors we designed a base system that can be tooled for multiple uses
offering flexibility to our customers.  We intend to further penetrate the
dedicated OEM instrument market through new product development and continued
cost reductions in manufacturing to meet price points.  Reflect Scientific is also poised to
provide consumables to the same group of customers that purchase detectors. This
one stop shopping is very attractive to customers and is unique in the OEM
supply industry further making Reflect Scientific the choice for OEMs.  Testing Equipment  Out testing equipment provides automated
inspection products and services including part handling and automation to
manufacturers of automotive and diesel catalysts and filters, exhaust systems,
and OEMs including inspection of in service components such as Diesel
Particulate Filters. Although there are several markets that can be addressed
with these products the first to be accessed is the automotive industry. The
inspection product for this market takes advantage of the increased focus on
environmental protection with respect to emissions from gas and diesel engines
as well as the increased attention to    100% inspection directives from OEMs.
Environmental Protection Agency (EPA) Tier 2 emission standards on diesel cars
and light trucks will be phased in from 2004  2010 and beyond.  Through our subsidiary, CATPRO, Inc., we
will continue forward with the CATPRO line using its presence in the market and
its strength as a product to position itself as a key supplier of automation
equipment, inspection equipment and data management solutions.  Competition  The environment for our products and
services is intensely competitive. Although the complexity of the products we
produce limits the number of companies we compete with, the companies with
competing technology are generally larger and often subsidiaries or divisions of
very large multinational companies.  Our competitors size and association
with large multinational companies creates advantages over us in the ability to
access potential customers.  Many potential customers already purchase
products either directly from our competitors or from another subsidiary of
these large multinational companies creating natural inroads to sales that we do
not possess.  Given our relative size verses our
competitors, we often have to seek niche markets for our products or focus on
selling components to be used in our competitors larger detection units.
 We believe, however, that our technology and experience in the ultra low
freezers and detectors allows us to be competitive in our markets.
 However, since our products are new to the marketplace, the products long
term commercial acceptance is still unknown.  Most of our products compete
against multiple competitors with our refrigeration products competing primarily
against Thermo Fisher Scientific and Sanyo Corporation.  Growth Plan  We continue to evaluate acquisitions of
businesses and technologies to enhance our revenues in the Life Science market.
To that end, we completed the acquisition of All Temp in January 2007 and Image
Labs in February 2007, and we acquired Cryometrix in June, 2006.  We intend to seek to expand the
applications for our products and equipment into additional markets as we
develop brand recognition.  We hope to be able to leverage off of our
existing products and name recognition as we continue forward using our existing
offerings and product strength to position us as a key supplier of automation
equipment, inspection equipment and cryogenic storage solutions.  This
strategic plan will also allow for further diversification of our customer
base.  All Temp provides service and installation
of ultra low temperature freezers and other environmental chambers. A strong
synergy with the Cryometrix freezer products also exists.  We will be able
to further vertically integrate our freezer line of business and gain revenues
from service contracts, installations and other services provided by All
Temp.  Image Labs expertise is in the field of
machine vision and robotics. A key component to product extension of the
Cryometrix freezers is automation. Image Labs will provide the necessary
technology to create product line extensions that integrate automation into
existing products. Larger automated freezer systems are used world wide for the
storage of vaccines and tissues and will allow Reflect Scientific to participate
in this market.  CatPro, a division of Image Labs, provides
automated inspection products and services, including part handling and
automation to manufacturers of automotive and diesel catalysts and filters,
exhaust systems and OEMs, and inspection of in service components such as
Diesel Particulate Filters.  Manufacturing, Supplies, and Quality
Control  Many of our products are manufactured by
third party manufactures, including our ultra low temperature freezers. We
believe by outsourcing our manufacturing we are able to reduce the overall cost
of our products.  We do manufacture some products which are less labor and
parts intensive in our facility in Orem, Utah.  Regulation and Environmental
Compliance  Presently, none of our products are in highly regulated
industries.  Sources and Availability of Raw Materials and Names of
Principal Suppliers  Sources and availability of key materials and
intermediates continue to remain stable. Where supply is considered a critical
success factor for our business, we have certified vendors in place.     Dependence on One or a Few Major Customers  With the recent acquisitions and expansion of our product
line, we are not dependent on any large customer.  Need for any Governmental Approval of
Principal Products or Services  No products presently being manufactured or
sold by us are subject to prior governmental approvals.  Effect of Existing or Probable
Governmental Regulations on the Business  The integrated disclosure system for small
business issuers adopted by the Securities and Exchange Commission in Release
No. 34-30968 and effective as of August 13, 1992, substantially modified the
information and financial requirements of a Small Business Issuer, defined to
be an issuer that has revenues of less than $25 million; is a U.S. or Canadian
issuer, is not an investment company, and if a majority-owned subsidiary, the
parent is also a small business issuer.  We are a small business issuer.  The Securities and Exchange Commission,
state securities commissions and the North American Securities Administrators
Association, Inc. (NASAA) have expressed an interest in adopting policies that
will streamline the registration process and make it easier for a small business
issuer to have access to the public capital markets.  We are also subject to the Sarbanes-Oxley
Act of 2002. This Act creates a strong and independent accounting oversight
board to oversee the conduct of auditors of public companies and strengthens
auditor independence. It also requires steps to enhance the direct
responsibility of senior members of management for financial reporting and for
the quality of financial disclosures made by public companies; establishes clear
statutory rules to limit, and to expose to public view, possible conflicts of
interest affecting securities analysts; creates guidelines for audit committee
members appointment, compensation and oversight of the work of public
companies auditors; prohibits certain insider trading during pension bund
blackout periods; and establishes a federal crime of securities fraud, among
other provisions.  Section 14(a) of the Exchange Act requires
all companies with securities registered pursuant to Section 12(g) of the
Exchange Act to comply with the rules and regulations of the Securities and
Exchange Commission regarding proxy solicitations, as outlined in Regulation
14A. Matters submitted to stockholders of our Company at a special or annual
meeting thereof or pursuant to a written consent will require our Company to
provide our stockholders with the information outlined in Schedules 14A or 14C
of Regulation 14; preliminary copies of this information must be submitted to
the Securities and Exchange Commission at least 10 days prior to the date that
definitive copies of this information are forwarded to our stockholders.  We are also required to file annual reports
on Form 10-KSB and quarterly reports on Form 10-QSB with the Securities Exchange
Commission on a regular basis, and will be required to timely disclose certain
material events (e.g., changes in corporate control; acquisitions or
dispositions of a significant amount of assets other than in the ordinary course
of business; and bankruptcy) in a Current Report on Form 8-K.  Patents, Trademarks, Licenses, Franchises,
Concessions, Royalty Agreements or Labor Contracts, including Duration  All patents and trademarks relating to
acquisitions have been assigned to us. Where appropriate, we seek patent
protection for inventions and developments made by our personnel and
incorporated into our products or otherwise falling within our fields of
interest.  We protect some of our technology as trade
secrets and, where appropriate, we use trademarks or register trademarks used in
connection with products.  Patents have been issued covering the
following products:  JMST chemical detectors  4 patents
issued Cryomastor ultra low temperature freezers 
1 patent issued Catalytic Converter Testing Equipment - 1
patent issued     PATENT INFORMATION Patent number
Title
Issue
Filing
Expiration6,804,976
High reliability multi-tube thermal exchange
structure
Oct 19, 2004
Dec 12, 2003
Dec 12, 20236,530,286
Method and apparatus for measuring fluid
flow
Mar 11, 2003
May 9, 2000
May 9, 20205,969,812
Spectrophotometer apparatus with dual
concentric
beams and fiber optic beam splitter
Oct 19, 1999
Oct 18, 1995
Oct, 18, 20155,699,156
Spectrophotometer apparatus with dual light sources
and optical paths, fiber optic pick-up and sample cell therefore
Dec 16, 1997
Nov 23, 1994
Dec 16, 20145,694,215
Optical array and processing electronics and method
therefore for use in spectroscopy
Dec 2, 1997
Mar 4, 1996
Mar 4, 20167,283,224
Face lighting for edge location in catalytic
converter inspection
October 16, 2007
September 30, 2004
September 30, 2024  Royalty agreements were executed with JMST,
Cryomastor, All Temp and Image Labs as a condition of the companies
acquisitions. Under the terms of the royalty agreements:  JMST  David Carver
will receive a royalty payment on gross revenues related to revenues derived
from the Carver Patents or Carver Technology.  Such payments are due on
revenue in excess of $500,000 derived from products under the Carver Patents or
Carver Technology.  The royalty payment is 2.5% on the revenue in excess of
$500,000 and is payable quarterly.  Payments are to be made in Reflect
Scientifics common stock not to exceed 500,000 shares in total. New products
developed from the Carver Technology are subject to a royalty of 3% of gross
revenues in excess of $100,000, with an additional 2% if gross revenues exceed
$600,000. Royalties will also be paid in our common stock annually.  Common
stock will be valued at $3.00 per share for these purposes.  Royalty
payments are only due for years where there are valid Carver Patents.  Cryometrix  The prior
shareholders of Cryometrix receive a 2.5% royalty on all sales, licensing or
other distributions on revenue derived from products and technology received
from Cryometrix.  The royalty payment is not due or payable unless and
until the revenue derived from such products and technology exceeds $3,000,000.
 The payment is payable in shares of Reflect Scientifics common stock not
to exceed 2,000,000 shares in aggregate. Common stock will be valued at $1.80 or
market value at time of accrual which ever is greater, for these purposes.
  Payments are due quarterly.  All Temp  The
shareholders of All Temp will receive a pro-rata running royalty totaling 5% of
the gross annual revenues earned from the All Temps business unit.  This
revenue covers all revenues received by the All Temp subsidiary or any other
business unit of Reflect Scientific which revenue is derived from products or
services derived from All Temp as part of its acquisition.  The royalty is
payable as long as Reflect Scientific owns and operates the All Temp business
provided that the royalty is not payable if the All Temp business does not have
earnings of at least 10% measured by earnings before interest and taxes.
 The royalty is payable quarterly within 45 days following the close of
each quarter. If within three years of the closing of the acquisition of All
Temp, Reflect Scientific sells or transfers All Temp, its products or services,
All Temp shareholders shall receive a cash payment of six hundred thousand
dollars less any accumulated royalties payable.  Image Labs  The
shareholders of Image Labs will receive a 2.5% running earnout on the gross
revenues derived from products associated with Image Labs including value added
re-sales and custom engineering business segments.  This segment
specifically excludes anything received from our Catpro product lines. The
royalty is payable quarterly so long as Reflect Scientific owns the Image Labs
product line and services and as long as the business segment achieves an
earnings before interest and taxes of 10% in the quarter the royalty payments
are due.  The royalty last for the life of the Image Labs shareholders.     Research and Development Costs During
the Last Two Fiscal Years  During the year ended December 31, 2007, we
expended $198,396 for research and development.  During the year ended
December 31, 2006, we expended $13,261 for research and development.  The
majority of the research and development on our products was completed by the
companies we purchased prior to our purchase of the companies.  We expect
research and development cost to increase in the future with our ownership of
the new companies and product line.  Employees  As of April 3, 2008, subsequent to the
balance sheet date, we had 38 employees on a full-time basis and 2 part time
employees. None of our employees are represented under a collective bargaining
agreement. We believe our relations with our employees to be good.  Reports to Security Holders  You may read and copy any materials that we
file with the Securities and Exchange Commission at the Securities and Exchange
Commissions Public Reference Room at 100 F Street, N.E., Washington, D.C.
20549.  You may also find all of the reports that we have filed
electronically with the Securities and Exchange Commission at their Internet
site www.sec.gov.    Item 2. Description of Property   Reflect Scientific operates out of three
facilities.  Orem, Utah - This facility is a manufacturing and
office facility with 6,000 square feet of space; we lease this facility at
$3,563 per month, with the lease term expiring on November 30, 2008.  San Jose, California -
This facility is a manufacturing, office and showroom facility with 10,944
square feet of space; we lease this facility at $9,489 per month, with the lease
term expiring on December 31, 2009.  Bozeman, Montana - This
facility is a manufacturing and office facility with 9,140 square feet of space;
we lease this facility at $7,617 per month, with the lease term expiring on June
30, 2010.   Item 3. Legal Proceedings  We are not a party to any pending legal
proceeding. To the knowledge of management, no federal, state or local
governmental agency is presently contemplating any proceeding against us. No
director, executive officer or affiliate of ours or owner of record or
beneficially of more than five percent of our common stock is a party adverse to
us or has a material interest adverse to us in any proceeding.    Item 4. Submission of Matters to a Vote of Security
Holders  Except as set forth below, no matter was
submitted to a vote of our security holders during the fourth quarter of the
period covered by this Annual Report or during the previous two fiscal years.    PART II    Item 5. Market for Common Equity and Related
Stockholder Matters and Small Business Issuer Purchases of Equity Securities.  Market Information Since July 6, 2005, our common stock has
been listed under the symbol RSCF on the OTCBB.  Prior to July 6, 2005,
our stock traded under the symbol COLH since its initial listing on May 24,
2001.  The following table represents the high and low per share bid
information for our common stock for each quarterly period in fiscal 2007, 2006
and 2005. Such high and low bid information reflects inter-dealer quotes,
without retail mark-up, mark down or commissions and may not represent actual
transactions.  2007

2006

2005High

Low

High

Low

High

LowQuarter ended March 31
$  1.15
$
0.92
$
2.00
$
1.45
$
0.30
$
0.25Quarter ended June 30
$  1.75
$
0.99
$
1.69
$
1.20
$
0.30
$
0.30     Quarter ended September 30
$  1.88
$
1.12
$
1.22
$
0.90
$
1.82
$
0.30Quarter ended December 31
$  1.95
$
1.20
$
1.30
$
0.91
$
1.97
$
1.21  As of April 3, 2008, there were 34,195,153
shares of our common stock outstanding.   On April 3, 2008, the high
and low bid price for our common stock was $0.70  and $0.70,
respectively.  Holders The number of record holders of
our common stock as of April 3, 2008, was approximately 168; this number does
not include an indeterminate number of stockholders whose shares may be held by
brokers in street name.  Dividends We have not declared any cash
dividends with respect to our common stock, and do not intend to declare
dividends in the foreseeable future. Our future dividend policy cannot be
ascertained with any certainty. There are no material restrictions limiting, or
that are likely to limit, our ability to pay dividends on our securities.  Securities Authorized for Issuance under Equity
Compensation Plans  Plan Category
Number of Securities to be issued upon exercise of
outstanding options, warrants and rights
Weighted-average exercise price of outstanding
options, warrants and rights
Number of securities remaining available for future
issuance under equity compensation plans excluding securities reflected in
column (a)(a)
(b)
(c)Equity compensation plans approved by security
holders
None
None
NoneEquity compensation plans not approved by security
holders
5,000,000
None
1,500,000Total
None
None
None    Recent Sales of Unregistered Securities  During the last three years, we issued the following
unregistered securities:  Common Stock Issued in Reflect
California  Reorganization Completed December 31, 2003  Name and Address*
Number of Shares Owned of Reflect
California
Number of Shares of Our Common
Stock Received in ExchangeKim Boyce
1270 South 1380 West
Orem, Utah 84058
8,171
18,723,250Michael Dancy
Suite 205
455 East 500 South
Salt Lake City, Utah 84111
43.6
100,000Diversified Instruments, LLC
528 14th Avenue
Salt Lake City, Utah 84103
733.8
1,681,500David Nelson
Suite 200
455 East 500 South
Salt Lake City, Utah 84111
43.6
100,000     SCS, Inc.
Suite 200
455 East 500 South
Salt Lake City, Utah 84111
1,008
2,310,199Totals
10,000
22,914,949  2005 Convertible Preferred Stock
Issuance*  During the year ended December 31, 2005, we sold 700,000
shares of our 2004 Series A Convertible Preferred Stock at an offering price of
$1.00 per share to 26 persons who were accredited investors as that term in
defined in Regulation D of the Securities and Exchange Commission.  2005 Common Stock Issued for Preferred
Stock Conversion* During the calendar year ended
December 31, 2005, 690,000 shares of this class of our preferred stock were
converted by the holders thereof into 1,150,002 shares of our common stock.  2005 Common Stock Issued for
Services*  Effective May 6, 2005, we issued 380,000 shares of our
common stock to eleven persons, which included three of our directors and
executive officers, for services rendered and valued at approximately $0.03 per
share.  2006 Common Stock Issuer for Preferred
Stock Conversion*  The remaining 10,000 shares of our outstanding 2004
Series A Convertible Preferred Stock was converted to 16,667 shares of our
common stock. 2006 Common
Stock Issued for Cash* We issued 400,000 shares of our
common stock for $0.80 per shares; and 1,073,500 shares of our common stock for
$1.00 per share in two separate private placements. 2006 Common
Stock Issued for Services* We issued 415,000 and 53,675
shares of our common stock for services. 2006 Common
Stock Issued for Acquisitions* We issued 200,000 shares in connection with
the JMST acquisition; and 3,000,000 shares in connection with the Cryometrix
merger.  2007 Common Stock Issued for
Acquisitions*  On January 29, 2007, we issued 2,000,000
shares of our common stock to the four shareholders of All Temp as part of the
acquisition of All Temp and on February 29, 2007 we issued 525,000 shares of our
common stock to the one shareholder of Image Labs.  2007 Common Stock issued for Cash and
Services  During the period ended September 30, 2007,
we issued shares:  To whom
Date
Number of shares
ConsiderationSales to accredited investors
4/30/2007
465,969
$.75 per shareEmployees
5/2/2007
285,000
ServicesConsultant
5/2/2007
50,000
ServicesV Finance Investments
5/2/2007
35,000
ServicesSales to accredited investors
6/27/2007
133,334
$.75 per shareCashless exercise of Warrants
10/10/2007
20,262
WarrantsCashless exercise of Warrants
12/4/07
22,331
WarrantsConversion of Debenture
12/24/07
38,462
Debt  On June 29, 2007, Reflect Scientific
pursuant to the securities purchase agreement sold to five institutional
investors convertible debentures in the aggregate principal amount of $2,500,000
and stock purchase warrants exercisable over a five    year period for 3,846,154 shares of common
stock (the Warrants) in a private placement.  All purchasers are
accredited investors and a form D was filed covering this transaction.  * We issued all of these securities to
persons who were accredited investors or sophisticated investors as those
terms are defined in Regulation D of the Securities and Exchange Commission; and
each such investor had prior access to all material information about us. We
believe that the offer and sale of these securities were exempt from the
registration requirements of the Securities Act, pursuant to Sections 4(2) and
4(6) thereof, and Rule 506 of Regulation D of the Securities and Exchange
Commission. Sales to accredited investors are preempted from state
regulation.  Use of Proceeds of Registered Securities  There were no proceeds received during the
calendar year ended December 31, 2007, from the sale of registered
securities.  Purchases of Equity Securities by Us and
Affiliated Purchasers  There were no purchases of our equity
securities by us or any of our affiliates during the year ended December 31,
2007.  Tom Tait, our Vice President and a director, purchased 3,000 shares
in the open market on April 19, 2006, for $1.60 per share; and 3,000 shares in
the open market on April 25, 2006, for $1.50 per share.  SMALL BUSINESS ISSUER PURCHASES OF EQUITY
SECURITIES  Period
(a) Total Number of Shares (or Units)
Purchased
(b) Average Price Paid per Share (or
Unit)
(c) Total Number of Shares (or Units)
Purchased as Part of Publicly Announced Plans or Programs
(d) Maximum Number (or Approximate
Dollar Value) of Shares (or Units) that may yet be Purchased Under the
Plans or ProgramsMonth #1 October 1, 2006 through October 30,
2006
None
None
None
NoneMonth #2
November 1, 2006 through November 30, 2006
None
None
None
NoneMonth #3
December 1, 2006 through December 31, 2006
None
None
None
NoneTotal
None
None
None
None    Item 6. Managements Discussion and Analysis or
Plan of Operation  Certain statements in this Report
constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors that may cause
our actual results, performance or achievements to be materially different from
any future results, performance or achievements expressed or implied by such
forward-looking statements. Factors that might cause such a difference include,
among others, uncertainties relating to general economic and business
conditions; industry trends; changes in demand for our products and services;
uncertainties relating to customer plans and commitments and the timing of
orders received from customers; announcements or changes in our pricing policies
or that of our competitors; unanticipated delays in the development, market
acceptance or installation of our products and services; changes in government
regulations; availability of management and other key personnel; availability,
terms and deployment of capital; relationships with third-party equipment
suppliers; and worldwide political stability and economic growth. The words
"believe", "expect", "anticipate", "intend" and "plan" and similar expressions
identify forward-looking statements. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date
the statement was made.     Critical Accounting Policies and
Estimates  The preparation of financial statements and
related disclosures in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and
assumptions that affect the amounts reported in the unaudited Condensed
Consolidated Financial Statements and accompanying notes.  Management bases
its estimates on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances. Actual results could
differ from these estimates under different assumptions or
conditions.  Reflect Scientific believes there have been no
significant changes during the year ended December 31, 2006.  Reflect Scientifics accounting policies
are more fully described in Note 1 of the consolidated financial statements.
 As discussed in Note 1, the preparation of financial statements and
related disclosures in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and
assumptions about the future events that affect the amounts reported in the
consolidated financial statements and the accompanying notes. Management bases
its estimates on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances.  Actual differences
could differ from these estimates under different assumptions or conditions.
 Reflect Scientific believes that the following addresses Reflect
Scientifics most critical accounting policies.  We recognize revenue in accordance with
Securities and Exchange Commission Staff Accounting Bulletin No. 104, Revenue
Recognition (SAB 104).  Under SAB 104, revenue is recognized at the
point of passage to the customer of title and risk of loss, when there is
persuasive evidence of an arrangement, the sales price is determinable, and
collection of the resulting receivable is reasonably assured.  We recognize
revenue as services are provided with specific long lead time orders.  Our allowance for doubtful accounts is
maintained to provide for losses arising from customers inability to make
required payments.  If there is deterioration of our customers credit
worthiness and/or there is an increase in the length of time that the
receivables are past due greater than the historical assumptions used,
additional allowances may be required.  We account for income taxes in accordance
with Statement of Financial Accounting Standards No. 109, Accounting for Income
Taxes (SFAS No. 109).  Under SFAS No. 109, deferred tax assets and
liabilities are measured using enacted tax rates in effect for the year in which
the differences are expected to reverse.  Deferred tax assets will be
reflected on the balance sheet when it is determined that it is more likely than
not that the asset will be realized.  Plan of Operation  For the next 12 months, we see:  (1) A continued expansion of our core
business through the development and commercialization of new products, that
have already been identified, to meet existing market opportunities.  This
will be supported by an ongoing effort to create strategic marketing alliances
that are targeted towards increasing net present value by optimizing cost and
speed to market.  Several new products are currently pending
commercialization.  (2) The continuation of a complementary
growth initiative, through strategic acquisitions, to improve our position with
respect to tools, technologies and intellectual property as well as providing a
near term increase in earnings.  (3) As part of an ongoing management
process, our fund raising efforts and support for the above initiatives will be
continuously reviewed and prioritized to ensure that returns are commensurate
with levels of investment.  During 2006, we entered into material
agreements with JSMT, LLC and Cryrometrix, Inc. These agreements resulted in the
acquisition of strategic products and technologies that will allow us to
increase our market penetration into the Life Sciences market.  During 2005 and 2006, we focused
extensively on the acquisition of additional companies and their products and on
the raising of capital to support our expanding operations.  With the
closing of the last acquisition in February 2007, we are changing our focus and
managements efforts to more marketing and selling of the product line.
 Additionally, we are hopeful; we can reduce some of our expenses
associated with consultants, attorneys and accountants without the need for
outside support of the acquisitions.  Our Business Growth  Our sales have increased substantial from
2006 through December 2007, as we completed the acquisition of new companies and
their products.   We anticipate this trend to continue in the future
as we continue to expand our marketing and sales efforts related to our product
line.  The long term growth of our product line is still unknown as we have
only recently    completed the final acquisitions.  We
are hopeful based on sales during 2007, that the product lines are becoming
commercially accepted and that sales will continue to increase.  We do not anticipate we will emphasize
acquisitions as we have in the past and instead will focus on managing our
current product line.  This will require a focus from management on the
sales of these products.  We completed a capital raise in June 2007, with
the hope we will be able to use the capital to aggressively market our products
and pay for the expansion resulting from the acquisitions.  We anticipate
the future business growth over the next twelve months to come from our current
product line.  Results of Operations  December 31, 2007 and
2006  Our revenues increased during the year
ended December 31, 2007, to $8,020,266 from $2,572,955 for the year ended
December 31, 2006, primarily as a result of increased business from our
acquisitions.  Our cost of goods increased in the period
ending December 31, 2007, as compared to December 31, 2006, to $4,633,278 from
$1,519,547. The difference was partly as a result of increased sales and raw
material price increases. The percentage on gross margins for the two years was
essentially unchanged.  Although sales increased, the increase was
not sufficient to offset additional expenses as we again expanded our operations
in 2007.  General and administrative expenses increased to $3,447,791
during the year ended December 31, 2007, from $1,303,598 during the year ended
December 31, 2006. This was due to the issuance of common stock for services in
the amount of $445,526, the issuance of options to our key directors, a
substantial increase in legal and accounting fees related to acquisitions,
Securities and Exchange Commission regulations compliance and acquisition
audits, business relocation costs and other one time costs relating to the
acquisitions.  We expanded operations in an effort to staff anticipated
product development and product launches.  Options to purchase our common
stock were issued.  We incurred a large expense for this issuance that was
based on the fair value of the options.  The fair value was determined
using the Black Scholes method of valuing options.  We anticipate some
expenses to be less in coming periods as we will not have the acquisition
expenses at the levels we had in 2007 and in the first part of 2008.  With the acquisitions, our salaries
increased from $815,346 to $1,752,103 from December 31, 2006 to December 31,
2007.  This was a direct result of the acquisitions.  We anticipate
salaries will increase further as we search for additional management personnel.
 We anticipate, however, that we will  reduce expenses in other areas
to somewhat offset future salary increases.  One area we are hopeful in
reducing expenses is the consulting, legal and accounting cost associated with
the acquisitions.  There were larger than normal expenses
associated with the acquisitions and as a result, we had a net loss of
$7,076,619 for the year ended December 31, 2007, compared to net loss of
$978,630 for the year ended December 31, 2006.  With many of the
acquisitions not closing until the first part of 2007, it will be difficult to
compare last years results with future periods or expected results going
forward.  We anticipate that sales will continue to increase and will be
able to offset expenses going forward.  Since we are in the initial phases
of several product launches and these products are entering into new markets,
the time frame until we reach profitability is still unknown.  Seasonality and
Cyclicality  We do not believe our business is cyclical.  Liquidity and Capital Resources  Our cash resources at December 31, 2007,
were $1,154,162, with accounts receivable of $1,371,770 and inventory of
$727,970. We have relied on revenues and sales of equity and debt securities for
cash resources.   As a result of the issuances of debt and common
stock, our working capital on December 31, 2007, was $2,534,426  To
complete acquisitions and to fund our expanding operations, much of the working
capital was used in the first part of 2007 requiring us to raise additional
capital which was completed in June 2007. This capital was used to increase our
manufacturing resulting in increased inventory.  We hope to devote some of
the available cash to marketing to help increase sales over the next twelve
months.  Historically, we have financed our working
capital requirements through the issuances of debt and common stock which has
generated sufficient funds to offset shortfalls and cover losses.  As we
continue to expand our operations, we anticipate seeking additional capital
through the sale of equity securities.  It is highly likely, we will again
seek additional capital in the equity markets.  At this time we do not know
the extent of the overall financing will need in the future.  Financing
will depend on how well our products are received in the marketplace.     In 2007, net cash used by operating
activities was $1,930,313 in cash as opposed to $805,019 in 2006.  The
major changes were the result of the acquisitions and the cost to cover such
acquisitions.  We were able to offset the use of cash by raising additional
equity in 2006.  We are hopeful that in 2007, with the additional capital
to focus on operations, including marketing, we will be able to reduce our loss
for the year.  We anticipate losses to continue as we
expand our sales efforts.  Since the products are new to the marketplace,
we are not sure how sales will be in upcoming quarters but we anticipate they
will continue to increase and should start covering our expenses.  Off-Balance Sheet Arrangements  We have no off balance sheet
arrangements.     Item 7.  Financial Statements  The financial statements of the Company are
set forth immediately following the signature page to this Form 10-KSB.    Item 8. Changes in and Disagreements with
Accountants on Accounting and Financial Disclosure  With the hiring of David Strate as our CFO,
our auditors, HJ & Associates, LLC, were no longer independent.  We
engaged Mantyla McReynolds, LLC effective October 3, 2007.  With the hiring
of David Strate as the CFO of Reflect Scientific, we were required to change
auditors and accordingly, notified HJ & Associates that we were going to
dismiss them as auditors effective October 1, 2007 for all further services
because of the hiring of Mr. Strate.  Mr. Strate was employed by HJ &
Associates at the time we hired him and we believed, along with HJ &
Associates, that this created a potential conflict of interest going forward and
would make HJ & Associates no longer independent in the future.  We
have had no disagreements with any of our auditors or accountants.   Item 8(A)T. Controls and Procedures.   Managements Annual Report on Internal Control Over
Financial Reporting  Evaluation of Disclosure Controls and
Procedures  Our
management, with the participation of our President and CFO, evaluated the
effectiveness of our disclosure controls and procedures as of the end of the
period covered by this report. Based on that evaluation, our President and CFO
concluded that our disclosure controls and procedures as of the end of the
period covered by this report were effective such that the information required
to be disclosed by us in reports filed under the Exchange Act is
(i) recorded, processed, summarized and reported within the time periods
specified in the SECs rules and forms and (ii) accumulated and
communicated to our management, including our President and CFO, as appropriate
to allow timely decisions regarding disclosure. A controls system cannot provide
absolute assurance, however, that the objectives of the controls system are met,
and no evaluation of controls can provide absolute assurance that all control
issues and instances of fraud, if any, within a company have been detected.   Managements Annual Report on Internal
Control over Financial Reporting  Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting (as defined in Rule 13a-15(f) under the
Exchange Act). Our internal control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes of
accounting principles generally accepted in the United States.   Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements.
Therefore, even those systems determined to be effective can provide only
reasonable assurance of achieving their control objectives.   Our
management, with the participation of the President and CFO, evaluated the
effectiveness of our internal control over financial reporting as of
December 31, 2007.  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.  Based
on this evaluation, our management, with the participation of the President and
CFO, concluded that, as of December 31, 2007, our internal control over
financial reporting was effective.     This annual report does not include an
attestation report of the Companys registered public accounting firm regarding
internal control over financial reporting.  Managements report was not
subject to attestation by the Companys registered public accounting firm
pursuant to temporary rules of the Security and Exchange Commission that permit
the Company to provide only managements report in this annual
report.  Changes in internal control over
financial reporting  There have been no changes in internal control over
financial reporting.   Item 8(B). Other Information.  None.    PART III    Item 9. Directors, Executive Officers, Promoters
and Control Persons; Compliance with Section 16(a) of the Exchange Act  Identification of Directors and Executive
Officers  The following table sets forth the names of
all of our current directors and executive officers. These persons will serve
until the next annual meeting of the stockholders or until their successors are
elected or appointed and qualified, or their prior resignation or termination.  Name
Positions Held
Date of Election or
Designation
Date of Termination or
ResignationKim Boyce
President &
12/03
*Director
12/03
*Tom Tait
Vice President &
01/05
*Director
01/05
*Kevin Cooksy
Secretary
01/05
*Treasurer
01/05
*Craig D. Morrison
Director
1/05
*David Strate
Chief Financial Officer
10/07
*  * These persons presently serve in the capacities
indicated.  Business Experience  Kim Boyce - CEO, Director Mr. Boyce, 53, is the founder of Reflect
Scientific and serves as President, Chief Executive Officer and Chairman of our
Board of Directors. Mr. Boyce has over thirty years of experience in
manufacturing, sales, distribution and management of scientific products related
to companies in the chemical analysis, semiconductor fabrication and optics
industries. His responsibilities have included serving as a Western Regional
Sales Manager, OEM Special Accounts Manager, Plant Operations Manager and
various other senior management positions within these industries.  Thomas Tait - Vice President, Director Mr. Tait, 51, serves as Vice President. Mr. Tait brings
experience with accelerated product development, lean process management
tools, strategic market analysis and acquisition integration.  Mr. Tait
joined us from Danaher Company where he was a Business Manager over a $120
million in sales product line. Prior assignments have included General Manager
of HyperQuan Inc., Product Manager J&W Scientific and Project Manager Varian
Inc. He also co-founded ChiraTech Inc, a high technology Company that was sold
to Thermo Electron Corporation. Mr. Tait holds an MBA in Technology Management
from the University of Phoenix and a BS in Chemistry from Clarkson University.
He also holds patents in Optics and MEMS technologies.  Kevin Cooksy - Secretary /
Treasurer Mr. Cooksy, 45, serves as the companys
secretary and treasurer with general responsibility for financial, legal and
administrative matters. Over the last twenty years, Mr. Cooksy has served in
corporate legal, corporate development and finance capacities with public and
private emerging technology organizations in the commercial, academic and
government sectors. He is an Honors Research Program graduate in Analytical
Chemistry from Northern Illinois University and received his MBA (Finance) from
The Lake Forest College Graduate School of Management (magna cum laude) and a
Juris Doctor degree from the McGeorge School of Law, University of the
Pacific.     Craig Morrison, MD- Board Member Dr. Morrison, 64, serves on the Board of
Directors. Dr. Morrison is a surgeon practicing in the State of Utah. He has
provided his medical expertise and is one of the pioneering shareholders in the
finance and development of Sanguine Corporation. Sanguine is a company focused
on developing synthetic alternatives to blood. Dr. Morrison will support the
activities of the Board lending his knowledge of startup operations gained
through his long experience and development of Sanguine.  David Strate Chief Financial Officer Mr. Strate, age 44, has been working as a
CPA in public practice for over 14 years with an emphasis on public company
auditing and review.  Mr. Strate was previously employed by HJ &
Associates, LLC in Salt Lake City, Utah.  HJ & Associates, LLC is a
certified public accounting firm.  Mr. Strate was employed by HJ &
Associates, LLC from August 2000 to September 2007.  Prior to joining HJ
& Associates, LLC, Mr. Strate was employed by Radiators, Inc., a regional
wholesaler, as its corporate controller.  Mr. Strate received his BA degree
in accounting from the University of Utah.  Mr. Strate does not have an
employment contract.  Significant Employees Brian
Smithgall General Manager Image Labs Mr. Smithgall, age 51, has been involved in
the machine vision industry for 25 years. He started Image Labs International
(previously known as Vision 1) in 1993 to provide the custom machine vision and
imaging solutions. Mr. Smithgall holds an MS in Electrical Engineering from the
University of Southern California, and led two successful startups before Image
Labs. He is a long time member of SPIE, SME and IEEE, and is recognized as a
Certified Manufacturing Engineer with the SME Machine Vision Association, a
Senior Member of the IEEE, and on the Editorial Advisory Board of Advanced
Imaging Magazine. Mr. Smithgall holds patents in image processing systems and
has given numerous professional papers. He led Image Labs to its selection as an
IC-500 company in 2000 and 2001.  Eric Pierson General Manager Miralogix Mr. Pierson, age 46, has been involved in
all aspects of the development of the CatPro product line used for inspection of
catalytic converter monoliths including product design, market development,
customer and vendor relations and web site development. Prior to this Mr.
Pierson was cofounder of Pathway
Systems which designed and manufactured critical components and sub-systems used
by leading semiconductor and rigid memory disk equipment manufacturers. He
brings strong product development skills and valuable insight to the capital
equipment manufacturing arena.  John Dain General Manager All Temp Engineering Mr. Dain, age 49,  has been involved in the field of
controlled envirionments for 30 years. Co-founding All Temp Engineering in 1985,
Mr. Dain was instrumental in growing the company to the largest envrionmental
service design company in the State of California through his expertise in
engineering, attention to customer support and knowledge of cryogenic systems.
Through his work with customers a new product direction was recognized and
implemented via the founding of Cryomastor  a company that specializes in state
of the art ultra-low temperature freezers. In addition to patents, Mr. Dain has
memberships in several key engineering organizations.  Nicholas Henneman Director of Manufacturing Cryometrix Mr. Henneman, age 51, has been involved in environmental
systems for 25 years. His experience spans control logic, human interface
systems, cryogenic systems and management. As President and Director of
Operations, Mr. Hennemans contribution to the growth of All Temp Engineering
has been significant. His prior experience includes Section Head and Lab
supervisor at Phillips Semiconductors.  He was also instrumental in
applying his skills in developing the Cryomastor product.  Family Relationships  There are no family relationships between
our officers and directors.  Involvement in Certain Legal Proceedings  During the past five years, no director,
person nominated to become a director, executive officer, promoter or control
person of our Company:  (1) was a general partner or executive
officer of any business against which any bankruptcy petition was filed, either
at the    time of the bankruptcy or two years prior
to that time;  (2) was convicted in a criminal proceeding
or named subject to a pending criminal proceeding (excluding traffic violations
and other minor offenses);  (3) was 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) was found by a court of competent
jurisdiction (in a civil action), the Securities and Exchange 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.  Compliance with Section 16(a) of the Exchange
Act Section 16(a) of
the Exchange Act requires that our executive officers and directors and persons
who beneficially own more than 10% of our common stock, file initial reports of
stock ownership and reports of changes in stock ownership with the Securities
and Exchange Commission. Officers, directors, and greater than 10% owners are
required by applicable regulations to furnish our Company with copies of all
Section 16(a) forms that they file. Based solely on a
review of the copies of such forms furnished to us or written representations
from certain persons, we believe that during our calendar year ended December
31, 2007, all filing requirements applicable to our officers, directors and 10%
stockholders were met by such persons.  Code of Ethics We have adopted a
Code of Ethics that applies to all of our directors and executive officers
serving in any capacity for our Company, including our principal executive
officer, principal financial officer, principal accounting officer or controller
or persons performing similar functions, which Code of Ethics was attached to
our Form 10-KSB annual Report for the year ended December 31, 2003. See Part
III, Item 13.  Nominating Committee We have not
established a Nominating and Corporate Governance Committee because we believe
that our three member Board of Directors is able to effectively manage the
issues normally considered by a Nominating and Corporate Governance
Committee.  Audit Committee  We have no Audit
Committee, and we are not required to have an audit committee; we do not believe
the lack of an Audit Committee will have any adverse effect on our financial
statements, based upon our current operations. We will assess whether an audit
committee may be necessary in the future.      Item 10. Executive Compensation  The following table sets forth the
aggregate compensation paid by us for services rendered during the periods
indicated:  SUMMARY COMPENSATION TABLE Name and Principal Position

(a)
Year



(b)
Salary
($)


(c)
Bonus
($)


(d)
Stock Awards
($)

(e)
Option Awards
($)

(f)
Non-Equity Incentive Plan Compensation
($)
(g)
Nonqualified  Deferred Compensation
($)
(h)
All Other Compensation
($)

(i)
Total
Earnings
($)

(j)Kim Boyce President & Director
12/31/07
12/31/06
12/31/05
$105,000
$105,000
$105,000
0
0
0
0
0
0
3,214,456
0
0
0
0
0
0
0
0
0
0
0
$3,319,456
$105,000
$105,000Tom Tait VP & Director
12/31/07
12/31/06
12/31/05
$63,077
$60,000
$50,769
0
0
0
0
*
*
139,101
0
0
0
0
0
0
0
0
0
0
0
$202,178
$60,000
$50,769Kevin Cooksy
Sec/Treas
12/31/07
12/31/06
12/31/05
0
0
0
0
0
0
0
*
*
0
0
0
0
0
0
0
0
0
0
0
0
0
0Craig D. Morrison, MD Director
12/31/07
12/31/06
12/31/05
0
0
0
0
0
0
0
*
*
0
0
0
0
0
0
0
0
0
0
0
0David Strate, CFO
12/31/07
$21,250
0
0
0
0
0
0
$21,250 * Effective August 28, 2006, the following persons were
issued the following shares of our common stock that were restricted
securities, for services rendered and all valued at approximately $0.03 per
share: Tom Tait, 75,000 shares; Kevin Cooksy, 15,000 shares; Craig D. Morrison,
M.D., 10,000 shares. * Effective May 6, 2005, the
following persons were issued the following shares of our common stock that were
restricted securities, for services rendered and all valued at approximately
$0.03 per share: Tom Tait, 50,000 shares; Kevin Cooksy, 25,000 shares; Craig D.
Morrison, M.D., 100,000 shares; and Pamela Boyce, 50,000 shares.  David Strate was hired in October, 2007.
 His annual salary is currently set at $85,000.     Outstanding Equity Awards Outstanding
Equity Awards At Fiscal Year-End Option
Awards________________
Stock
Awards________Name
Number of
securities underlying unexercised Options (#) Exercisable
Number of
Securities Underlying Unexercised Options (#) Unexercisable
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
Unearned Options (#)
Option
Exercise Price ($)
Option
Expiration Date
Number of
Shares or Units of Stock That Have Not Vested (#)
Market
Value of Shares or Units of Stock That Have Not Vested ($)
Equity
Incentive Plan Awards: Number of Unearned Shares Units or Other Rights
That Have Not Vested (#)
Equity
Incentive Plan Awards Market or Payout Value of Unearned Shares, Units or
Other Rights That Have Not Vested (#)Kim Boyce
4,8000,000
4,800,000
None
$1.32
December 31,
2012
None
None
None
NoneTom Tait
200,000
200,000
None
$1.20
December 31,
2012
None
None
None
None  Compensation of Directors  Name
Fees Earned or Paid in Cash ($)
Stock Awards ($)
Option Awards ($)
Non-Equity Incentive Plan Compensation ($)
Nonqualified Deferred Compensation Earnings
($)
All Other Compensation ($)
Total ($)(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)None
None
None
None
None
None
None
None   Item 11. Security Ownership of Certain Beneficial
Owners and Management  Security Ownership of Certain Beneficial
Owners  The following table
sets forth, as of March 14, 2008, the names, addresses and number of shares of
common stock beneficially owned by all persons known to the management of
Reflect Scientific to be beneficial owners of more than 5% of the outstanding
shares of common stock, and the names and number of shares beneficially owned by
all directors of Reflect Scientific and all executive officers and directors of
Reflect Scientific as a group (except as indicated, each beneficial owner listed
exercises sole voting power and sole dispositive power over the shares
beneficially owned).  For purposes of this table, information as
to the beneficial ownership of shares of common stock is determined in
accordance with the rules of the Securities and Exchange Commission and includes
general voting power and/or investment power with respect to securities. Except
as otherwise indicated, all shares of our common stock are beneficially owned,
and sole investment and voting power is held, by the person named. For purposes
of this table, a person or group of persons is deemed to
have "beneficial ownership" of any shares of common stock, which such person has
the right to acquire within 60 days after the date hereof. The inclusion herein
of such shares listed beneficially owned does not constitute an admission of
beneficial ownership.  All percentages are calculated based upon a
total number of 34,195,153 shares of common stock outstanding as of April 3,
2008, plus, in the case of the individual or entity for which the calculation is
made, that number of options or warrants owned by such individual or entity that
are currently exercisable or exercisable within 60 days.     Amount and Nature of
Percentage of OutstandingTitle of Class
Name and Address of Beneficial Owner
Beneficial Owner
Common stockPrincipal ShareholdersCommon Stock
Kim Boyce(1)
1270 South 1380 West
Orem, Utah 84058
21,718,250
63.84%Common Stock
Dain Family Revocable Trust
4057 Cienega Road
Hollister, California 95023
2,530,000
7.44%Common Stock
Nicholas J. Henneman
P.O. Box 1175
5885 Diablo Hills Road
Tres Pinos, California 95075-1175
2,470,000
7.26%Officers and DirectorsCommon Stock
Kim Boyce
21,718,250
63.84%Common Stock
Tom Tait(2)
361,000
1.1%Common Stock
Kevin Cooksy
40,000
.12%Common Stock
Craig D. Morrison, M.D.
210,000
.62%All directors and executive officers of the Company
as a group (Four individuals)
22,329,250
========
65.64%
====== ______________________________ (1)  Includes 4,800,000 shares issuable upon
exercise of stock options with an exercise price of $1.32 per share.  The
options are exercisable at any time within five years from their date of
issuance in December 2007. (2)  Includes 200,000 shares issuable upon exercise
of stock options with an exercise price of $1.20 per share.  The options
are exercisable at any time within five years from their date of issuance in
December 2007.  Changes in Control   There are no current or planned transactions that would
or are expected to result in a change of control of our Company.  Securities Authorized for Issuance under Equity
Compensation Plans  Plan Category
Number of Securities to be issued upon exercise of
outstanding options, warrants and rights
Weighted-average exercise price of outstanding
options, warrants and rights
Number of securities remaining available for future
issuance under equity compensation plans excluding securities reflected in
column (a)(a)
(b)
(c)Equity compensation plans approved by security
holders
None
None
NoneEquity compensation plans not approved by security
holders
5,000,000
$1.32
1,500,000Total
5,000,000
=======
$1.32
1,500,000
=======   Item 12. Certain Relationships and Related
Transactions  Transactions with Related Persons  There were no material transactions,
or series of similar transactions, during our Companys last fiscal year, or any
currently proposed transactions, or series of similar transactions, to which our
Company or any of our subsidiaries was or is to be a    party, in which the amount involved
exceeded 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 and in which any
director, executive officer or any security holder who is known to us to own of
record or beneficially more than five percent of any class of our common stock,
or any member of the immediate family of any of the foregoing persons, had an
interest.  Parents of the Issuer  None; however Kim Boyce, our President and a director,
may be deemed to be our  Parent by virtue of his substantial
shareholdings in our Company.  Transactions with Promoters and control
persons  There were no material transactions, or
series of similar transactions, during our Companys last five fiscal years, or
any currently proposed transactions, or series of similar transactions, to which
we or any of our subsidiaries was or is to be a party, in which the amount
involved exceeded $120,000 and in which any promoter or founder of ours or any
member of the immediate family of any of the foregoing persons, had an interest.   Item 13. Exhibits  Exhibits  Exhibit No.
Title of Document
Location if other than attached hereto3.1
Articles of Incorporation
10-SB Registration Statement*3.2
Articles of Amendment to Articles of
Incorporation
10-SB Registration Statement*3.3
By-Laws
10-SB Registration Statement*3.4
Articles of Amendment to Articles of
Incorporation
8-K Current Report dated December 31,
2003*3.5
Articles of Amendment to Articles of
Incorporation
8-K Current Report dated December 31,
2003*3.6
Articles of Amendment
September 30, 2004 10-QSB Quarterly
Report*3.7
By-Laws Amendment
September 30, 2004 10-QSB Quarterly
Report*4.1
Debenture
8-K Current Report dated June 29, 2007*4.2
Form of Purchasers Warrant
8-K Current Report dated June 29, 2007*4.3
Registration Rights Agreement
8-K Current Report dated June 29, 2007*4.4
Form of Placement Agreement
8-K Current Report dated June 29, 2007*5.1
Legal Opinion and Consent
This Filing10.1
Securities Purchase Agreement
8-K Current Report dated June 29, 2007*10.2
Placement Agent Agreement
8-K Current Report dated June 29, 2007*10.3
JMST Purchase Agreement
8-k Current Report dated April 4, 2006*10.4
Cryomastor Merger Agreement
8-K Current Report dated April 19, 2006*10.5
Image Labs Merger Agreement
8-K Current Report dated November 15,
2006*10.6
All Temp Merger Agreement
8-K Current Report dated November 17,
2006*14
Code of Ethics
December 31, 2003 10-KSB Annual Report*21
Subsidiaries of the Company
December 31, 2006 10-KSB Annual Report*23.1
Consent of HJ & Associates
This Filing23.2
Consent of Mantyla McReynolds
This Filing31.1
302 Certification of Kim Boyce
This Filing31.2
302 Certification of David Strate
This Filing32
906 Certifications
This Filing                             * Previously filed with the Securities and Exchange
Commission in the form indicated and incorporated by reference.  Additional Exhibits Incorporated by Reference *
Reflect California Reorganization
8-K Current Report dated December 31,
2003*
JMST Acquisition
8-K Current Report dated April 4, 2006*
Cryomastor Reorganization
8-K Current Report dated June 27, 2006*
Image Labs Merger Agreement Signing
8-K Current Report dated November 15,
2006*
All Temp Merger Agreement Signing
8-K Current Report dated November 17,
2006*
All Temp Merger Agreement Closing
8-KA Current Report dated November 17,
2006*
Image Labs Merger Agreement Closing
8-KA Current Report dated November 15,
2006*
Debenture Placement
8-K Current Reported dated       *  Previously filed and
incorporated by reference.   Item 14. Principal Accounting Fees and
Services  The Following is a summary of the fees billed to us by
our principal accountants during the fiscal years ended December 31, 2007 and
2006:  Fee
Category





2007





2006Audit
Fees



$


15,307



$


66,668Audit-related
Fees



$


0



$


0Tax
Fees



$


0



$


1,408All
Other Fees



$


0



$


274Total
Fees



$


15,307



$


68,350  Audit Fees - Consists of fees for
professional services rendered by our principal accountants for the audit of our
annual financial statements and review of the financial statements included in
our Forms 10-QSB or services that are normally provided by our principal
accountants in connection with statutory and regulatory filings or engagements.  Audit-related Fees - Consists of fees for
assurance and related services by our principal accountants that are reasonably
related to the performance of the audit or review of our financial statements
and are not reported under Audit fees.  Tax Fees - Consists of fees for
professional services rendered by our principal accountants for tax compliance,
tax advice and tax planning.  All Other Fees - Consists of fees for
products and services provided by our principal accountants, other than the
services reported under Audit fees, Audit-related fees, and Tax fees
above.  Policy on Audit Committee Pre-Approval
of Audit and Permissible Non-Audit Services of Independent Auditors  We do not have an Audit Committee;
therefore, there is no Audit Committee policy in this regard. However, we do
require approval in advance of the performance of professional services to be
provided to us by our principal accountant. Additionally, all services rendered
by our principal accountant are performed pursuant to a written engagement
letter between us and the principal accountant.    SIGNATURES  In accordance with Section 13 or 15(d) of
the Securities Exchange Act, the Company caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.   REFLECT SCIENTIFIC, INC.  Date:
April 14, 2008

By:
/s/Kim BoyceKim Boyce, President and
Director  Date:
April 14, 2008

By:
/s/David StrateDavid Strate, Chief Financial Officer (Principal
Accounting Officer  In accordance with the Securities Exchange
Act, this Report has been signed below by the following persons on behalf of the
Company and in the capacities and on the dates indicated:  REFLECT SCIENTIFIC, INC.  Date:
April 14, 2008

By:
/s/Kim BoyceKim Boyce, President and DirectorDate:
April 14, 2008

By:
/s/Tom TaitTom Tait, Vice President and
Director     Date:
April 14, 2008

By:
/s/Kevin CooksyKevin Cooksy, Secretary/Treasurer and
Director                        REFLECT SCIENTIFIC, INC. AND SUBSIDIARIES  CONSOLIDATED FINANCIAL STATEMENTS  December 31, 2007            C O N T E N T S   Reports of Independent Registered Public Accounting Firms 3 -4  Consolidated Balance Sheet 5  Consolidated Statements of Operations 7  Consolidated Statements of Shareholders Equity 8  Consolidated Statements of Cash Flows 9  Notes to the Consolidated Financial Statements 10                                        REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM    Board of Directors and Shareholders of Reflect Scientific, Inc. and Subsidiaries Orem, Utah  We have audited the accompanying consolidated balance sheet of
Reflect Scientific, Inc. and Subsidiaries as of December 31, 2007, and the
related consolidated statements of operations, stockholders equity and cash
flows for the year then ended.  These consolidated financial statements are
the responsibility of the Companys management.  Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.  We conducted our audit in accordance with standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement.  The
Company has determined that it is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting.  Our
audit included consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the circumstances,
but not for the purposes of expressing an opinion on the effectiveness of the
Companys internal controls over financial reporting.  Accordingly, we
express no such opinion.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements.  An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall consolidated financial statement presentation.  We believe that our
audit provides a reasonable basis for
our opinion.  In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Reflect
Scientific, Inc. and Subsidiaries as of December 31, 2007, and the results of
their operations and their cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.    /s/ Mantyla McReynolds, LLC Mantyla McReynolds, LLC Salt Lake City, Utah April 4, 2008               F-3     REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM     To
the Board of Directors of Reflect
Scientific, Inc. Orem,
Utah   We have audited the accompanying consolidated statements of
operations, stockholders equity and cash flows of Reflect Scientific, Inc. for
the year ended December 31, 2006. These consolidated financial statements are
the responsibility of the Companys management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audit.  We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the consolidated financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall consolidated financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.  In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated results of
operations and cash flows of Reflect Scientific, Inc. for the year ended
December 31, 2006 in conformity with United States generally accepted accounting
principles.  The Company has restated the consolidated financial statements for
the year ended December 31, 2006 to correct the valuation of its acquisition of
certain intangible assets which is described in Note 11. The Company has also
added Note 12 to better describe its acquisition and valuation of a business.
 (December 31, 2006 10-KSB/A)   /s/HJ
& Associates, LLC  HJ
& Associates, LLC Salt
Lake City, Utah March
20, 2007, except for Notes 11 and 12 as to which the date is May 21, 2007               F-4    REFLECT SCIENTIFIC, INC. AND SUBSIDIARIES Consolidated Balance Sheet   ASSETS    December 31,
2007CURRENT ASSETSCash
$
1,154,162Accounts receivable, net (Note 2)

1,371,770Other receivables

28,517Inventory (Note 4)

727,970Prepaid assets

168,396Total Current Assets

3,450,815FIXED ASSETS, NET (Note 3)

259,884OTHER ASSETSIntangible assets, net

5,849,036Prepaid assets  long-term

190,555Deferred tax asset

38,000Deposits

29,945Total Other Assets

6,107,536TOTAL ASSETS
$
9,818,235                    The accompanying notes are an integral part of these consolidated
financial statements.  F-5     REFLECT SCIENTIFIC, INC. AND SUBSIDIARIES Consolidated Balance Sheet (Continued)   LIABILITIES AND SHAREHOLDERS EQUITY  December 31,
2007CURRENT LIABILITIESAccounts payable
$
432,392Short-term lines of credit

147,530Royalty payable

53,565Contract billings in excess

82,708Capital leases  short term portion

20,016Accrued expenses

179,778Income taxes payable

400Total Current Liabilities

916,389NON-CURRENT LIABILITIESConvertible debenture (net of discount Note
11)

618,750Capital leases  long-term portion

40,147Total Non-Current Liabilities

658,897Total Liabilities

1,575,286COMMITMENTS AND CONTINGENCIES (Note 5)SHAREHOLDERS EQUITYPreferred
stock, $0.01 per value, authorized  5,000,000 shares;
no
shares issued and outstanding

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

341,006Additional paid in capital

16,512,094Accumulated deficit

(8,610,151)Total Shareholders Equity

8,242,949TOTAL
LIABILITIES AND SHAREHOLDERS EQUITY
$
9,818,235         The accompanying notes are an integral part of these consolidated
financial statements.  F-6    REFLECT SCIENTIFIC, INC. AND SUBSIDIARIES Consolidated Statements of Operations   For the Year Ended
December 31,2007

2006REVENUES
$
8,020,266
$
2,572,955COST
OF GOODS SOLD

4,633,278

1,519,547GROSS
PROFIT

3,386,988

1,053,408OPERATING EXPENSESSalaries
and wages

1,752,103

815,346Rent
expense

243,871

62,906Stock
based compensation

3,353,557

-General
and administrative expense

3,447,791

1,303,598Total
Operating Expenses

8,797,322

2,181,850OPERATING
INCOME (LOSS)

(5,410,334)

(1,128,442)OTHER INCOME (EXPENSE)Forgiveness of debt

-

(200,000)Other income

17,209

23,707Loss on sale of asset

-

(16,618)Interest expense

(1,405,494)

(25)Total
Other Expenses

(1,388,285)

(192,936)INCOME (LOSS) BEFORE INCOME TAX EXPENSE

(6,798,619)

(1,321,378)Income tax expense (benefit)

278,000

(342,748)NET LOSS
$
(7,076,619)
$
(978,630)BASIC AND FULLY DILUTED INCOME(LOSS) PER SHARE
$
(0.21)
$
(0.03)WEIGHTED
AVERAGE NUMBER OF SHARES OUTSTANDING
$
34,328,678
$
28,432,024      The accompanying notes are an integral part of these consolidated
financial statements. F-7        REFLECT SCIENTIFIC,
INC. AND SUBSIDIARIES Consolidated Statements
of Shareholders Equity  Preferred
Stock
             Common
Stock    Shares
Amount
Shares
Amount
Additional Paid-In Capital
Stock Subscription
Accumulated DeficitBalance, December 2005
10,000
$    100
25,530,002
$255,300
$1,210,347
-
$(554,902)Common stock issued for cash
-
-
400,000
4,000
316,000

-Common stock issued pursuant to merger with
Cryomastor
-

3,000,000
30,000
3,720,000

-Common stock issued pursuant to JM SciTech, LLC
purchase (restated)
-

200,000
2,000
158,000

-Common stock issued for cash
-

1,073,500
10,735
1,062,765

-Common stock issued for services
-

415,000
4,150
390,100

-Common stock issued for commissions
-

53,675
537
51,528

-Stock offering costs
-

-
-
(52,065)

-Common stock subscription
-

-
-
-
257,251
-Conversion of
Preferred shares
(10,000)
(100)
16,667
167
(67)
-
-Contributed Capital
-
-
-
-
123,127
-
-Net loss for the year ended December 31,
2006
-

-
-
-

(978,630)Balances, December 31, 2006 (restated)
-
$
        -
30,688,844
$306,889
$6,979,735
$257,251
$(1,533,532)Common stock issued for subscription
-
-
336,336
3,363
253,889
(257,251)
-Common stock issued for acquisition of
subsidiaries
-
-
2,525,000
25,250
2,604,000
-
-Common stock used for employment agreement
-
-
500,000
5,000
485,000
-
-Common stock issued for cash
-
-
168,001
1,680
119,320
-
-Common stock issued for services
-
-
431,235
4,312
441,214
-
-Common stock issued for subscriptions
-
-
370,067
3,701
273,849
-
-Contributed capital
-
-
-
-
51,416
-
-Beneficial conversion feature of convertible
debenture
-
-
-
-
860,971
-
-Warrants issued in conjunction with convertible
debenture
-
-
-
-
2,114,954
-
-Common stock returned pursuant to agreement
-
-
(1,000,000)
(10,000)
(1,050,000)
-
-Cashless exercise of warrants
-
-
42,593
426
(426)
-
-Partial conversion of convertible debenture
-
-
38,462
385
24,615
-
-Options issued
-
-
-
-
3,353,557
-
-Net loss fro the years ended December 31,
2007
-
-
-
-
-
-
(7,076,619)Balance, December 31, 2007
-
$
        -
$34,100,538
$341,006
$16,512,094
$
          -
$(8,610,151)    The accompanying notes are an integral part of these consolidated
financial statements.  F-8    REFLECT SCIENTIFIC,
INC. AND SUBSIDIARIES Consolidated Statements
of Cash Flows  For the Year
Ended December
31, 2007

2006Net
loss
$
(7,076,619)
$
(978,630)Adjustments
to reconcile net income to net cashprovided
by operating activities:Depreciation

46,336

11,238Amortization

1,014,087

123,173Common
stock issued for services

445,526

446,315Warrants
issued for services

475,925

-Loss
on sale of asset

-

16,618Options
granted

3,353,557Changes in
operating assets and liabilities:Increase
in accounts receivable

(982,179)

(72,317)Increase
in other receivables

(27,349)Increase
in inventory

(133,930)

(59,112)(Increase)
decrease in income tax receivable

24,780

(25,948)(Increase)
decrease in prepaid asset

144,901

(9,489)Decrease
in deferred tax asset

278,000

-(Increase)
decrease in other asset

(16,544)

(324,050)Increase
in royalties payable

53,565

-Increase
in accounts payable and accrued expenses

469,631

17,183Net
Cash Used by Operating Activities

(1,930,313)

(855,019)CASH FLOWS
FROM INVESTING ACTIVITIESCash
paid for fixed assets

(37,739)

(217,927)Cash
paid for intangible assets

(200,000)

(1,354,905)Net
Cash Used by Investing Activities

(237,739)

(1,572,832)CASH FLOWS FROM FINANCING ACTIVITIESChange in
long term line of credit

129,177

18,353Principle
payments on capital leases

(1,552)

61,706Proceeds
from stock subscription

277,550

257,251Proceeds
from common stock issuance

121,001

2,311,605Contributed
capital

25,000

-Proceeds
from issuance of debenture

2,500,000

-Net
Cash Provided by Financing Activities

3,051,176

2,648,915NET INCREASE
(DECREASE) IN CASH

883,124

(221,064)CASH AT
BEGINNING OF PERIOD

271,038

492,102CASH AT END
OF PERIOD
$
1,154,162
$
271,038SUPPLEMENTAL
CASH FLOW INFORMATION:Cash
Paid For:Interest
$
-
$
25Income
taxes
$
800
$
6,008NON-CASH
FINANCING ACTIVITIES:Common
stock issued for services
$
445,526
$
446,315  The accompanying notes
are an integral part of these consolidated financial statements. F-9


REFLECT SCIENTIFIC,
INC. AND SUBSIDIARIES Notes to the
Consolidated Financial Statements December 31, 2007 and
2006  NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS  Cole, Inc. (the
Company) was incorporated under the laws of the State of Utah on November 3,
1999. The Company was organized to engage in any lawful activity for which
corporations may be organized under the Utah Revised Business Corporation Act.
 On December 30, 2003 the Company changed its name to Reflect Scientific,
Inc.  Reflect Scientific,
Inc. a California Corporation, was incorporated on June 14, 1993, under the laws
of California to engage in the manufacture of test kits for use in scientific
studies.  On December 30, 2003,
pursuant to an agreement and plan of reorganization, the Company completed a
reverse merger with the shareholders of Reflect Scientific, Inc. in which it
acquired 100% of Reflect Scientific, Inc., a California Company in exchange for
22,914,949 common shares of the Company.  The terms of the acquisition are
detailed in an 8-K filing dated December 31, 2003.  Under the terms of the
agreement, the President of Reflect Scientific, Inc. became the President of the
Company and was elected to the Board of Directors, the acquisition was accounted
for as a recapitalization of Reflect Scientific, Inc. because the members of
Reflect Scientific, Inc. controlled the Company after the acquisition.
 Reflect Scientific, Inc. was treated as the acquiring entity for
accounting purposes and Cole, Inc. was the surviving entity for legal purposes.
 There was no adjustment to the carrying values of the assets or
liabilities of Reflect Scientific, Inc. and no goodwill was recorded. The
operations for the year ended December 31, 2007 and 2006 are those of Reflect
Scientific, Inc.  Cryomastor, (renamed
Cryometrix) was acquired in its entirety through a merger agreement on June 27,
2006 where Reflect Scientific issued 3,000,000 shares of common stock as well as
$700,000 in cash to Cryomastor shareholders. In addition John Dain was paid
$300,000 for the assignment of a key product patent to Reflect Scientific. The
acquired assets will allow Reflect Scientific to manufacture and market
cryogenic storage systems without significant investment in infrastructure.  All Temp Engineering
was acquired in its entirety through a merger agreement on January 19, 2007
where Reflect Scientific issued 1,000,000 shares of common stock to  All
Temp Engineering shareholders.  The Company entered into this merger after
considering All Temps business history, financial condition, and intellectual
property.  The Company has a desire to expand its services and attract and
retain talented technical personnel and believed there were strategic and
financial advantages to combining the businesses.  Image Labs
International was acquired in its entirety through a merger agreement on March
6, 2007 where Reflect Scientific issued 525,000 shares of common stock as well
as $200,000 in cash to  Image Labs International shareholders.  NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  a.
 Accounting Method  The Companys financial
statements are prepared using the accrual method of accounting.  The
Company has elected a December 31 year-end.  b. Revenue Recognition  The Company recognizes
revenues as required by Staff Accounting Bulletin No. 104 Revenue Recognition.
 Revenue is only recognized on product sales once the product has been
shipped to the customers., and all other obligations and criteria of SAB 104
have been met.  These criteria are: Persuasive evidence of an agreement
exists,.Delivery has occurred,.Price is fixed or determinable. Collectibility is
reasonable assured.   F-10





REFLECT SCIENTIFIC,
INC. AND SUBSIDIARIES Notes to the
Consolidated Financial Statements December 31, 2007 and
2006  NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)  c.
 Estimates  The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period.  Actual results could differ from those
estimates.  d.
Cash and Cash Equivalents  The
company considers all deposit accounts and investment accounts with a maturity
of one year or less to be cash equivalents.  As of December 31, 2007 and
2006 the company had no cash equivalents.  e.
Accounts Receivable  The Company
writes off trade receivables when deemed uncollectible.  The Company
estimates allowance for doubtful accounts based on the aged receivable balances
and historical losses.  The Company charges off uncollectible accounts when
management determines no there is no possibility of collecting the related
receivable.The Company considers accounts receivable to be past due or
delinquent based on contractual terms, which is generally net 30 days.  The Company charged $82,344 and $0 to bad debt expense for
the years ended December 31, 2007 and 2006, respectively. The allowance for
doubtful accounts balance at December 31, 2007 was $80,161.  f.
Fixed Assets  Fixed assets are stated at cost.  Expenditure for minor
repairs, maintenance, and replacement parts which do not increase the useful
lives of the assets are charged to expense as incurred.  All major
additions and improvements are capitalized.  Depreciation is computed using
the straight-line method.  The lives over which the fixed assets are
depreciated range from 5 to 7 years.  g.
Inventory  Inventories are stated at the lower of cost or market value based
upon the First-In First-Out (FIFO) inventory method.  The Companys
inventory consists of parts for scientific vial kits, refrigerant gases and
other scientific items.  h.
Advertising Expense  The
Company follows the policy of charging the costs of advertising to expense as
incurred.  The Company recognized $42,654 and $8,928 of advertising expense
during the years ended December 31, 2007, and 2006, respectively. F-11





REFLECT SCIENTIFIC,
INC. AND SUBSIDIARIES Notes to the
Consolidated Financial Statements December 31, 2007 and
2006  i. Newly Issued Accounting Pronouncements  In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities.  SFAS No. 159 allows
entities to voluntarily choose, at specified election dates, to measure many
financial assets and financial liabilities at fair value.  The
election is made on an instrument-by-instrument basis and is
irrevocable.  If the fair value option is elected for an instrument,
SFAS No. 159 specifies that all subsequent changes in fair value for that
instrument shall be reported in earnings.  SFAS No. 159 is effective
as of the beginning of an entitys first fiscal year that begins after
November 15, 2007.  We do not anticipate a material impact upon
adoption of SFAS No. 159.  In
December 2007, the FASB issued SFAS No. 141(R), Business Combinations. 
SFAS No. 141(R) changes the accounting for and reporting of business combination
transactions in the following way:  Recognition with certain exceptions, of
100% of the fair values of assets acquired, liabilities assumed, and non
controlling interests of acquired businesses; measurement of all acquirer shares
issued in consideration for a business combination at fair value on the
acquisition date; recognition of contingent consideration arrangements at their
acquisition date fair values, with subsequent changes in fair value generally
reflected in earnings; recognition of pre-acquisition gain and loss
contingencies at their acquisition date fair value; capitalization of in-process
research and development (IPR&D) assets acquired at acquisition date fair
value; recognition of acquisition-related transaction costs as expense when
incurred; recognition of acquisition-related restructuring cost accruals in
acquisition accounting only if the criteria in Statement No. 146 are met as of
the acquisition date; and recognition of changes in the acquirers income tax
valuation allowance resulting from the business combination separately from the
business combination as adjustments to income tax expense.  SFAS No.
141(R) is effective for the first annual reporting period beginning on or after
December 15, 2008 with earlier adoption prohibited.  The adoption of
SFAS No. 141(R) will affect valuation of business acquisitions made in 2009 and
forward.  In
December 2007, the FASB issued SFAS No. 160 "Noncontrolling Interest in
Consolidated Financial Statements  an Amendment of ARB 51" (SFAS
160).  SFAS 160 clarifies that a noncontrolling interest in a
subsidiary is an ownership interest in the consolidated entity that should be
reported as equity in the consolidated financial statements.  It also
requires consolidated net income to be reported at amounts that include the
amounts attributable to both the parent and the noncontrolling interest, and
requires disclosure, on the face of the consolidated statement of income, of the
amounts of consolidated net income attributable to the parent and to the
noncontrolling interest.  SAFS 160 is effective for fiscal years, and
interim periods within those fiscal years, beginning on or after December 15,
2008.  Earlier adoption is prohibited.  We do not anticipate
a material impact upon adoption.  In
March 2008, the FSAB issued FASS No. 161, Disclosures about Derivative
Instruments and Hedging Activities.  SFAS 161 is intended to improve
financial reporting about derivative instruments and hedging activities by
requiring enhanced disclosures to enable investors to better understand their
effects on an entity's financial position, financial performance, and cash
flows.  SFAS 161 is effective for financial statements issued for
fiscal years and interim periods beginning after November 15, 2008, with early
application encouraged.  We do not anticipate a material impact upon
adoption.     F-12





REFLECT SCIENTIFIC, INC. AND SUBSIDIARIES Notes to the
Consolidated Financial Statements December 31, 2007 and
2006  NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)    j.Basic Earnings Per Share  The
computation of earnings per share of common stock are based on the weighted
average number of shares outstanding during the period of the consolidated
financial statements as follows:   For the Years
Ended
December
31,2007

2006Net loss (numerator)
$
(7,076,619)
$
(978,630)Shares (denominator)

34,328,678

28,432,024Net loss per  share
amount
$
(0.21)
$
(0.03)  As
of December 31, 2007 the Company had 9,151,895 shares of outstanding common
stock equivalents, however the company experienced a net loss during the year.
 The net loss would make the common stock equivalents anti-dilutive and as
such the diluted earnings per share will not be calculated.  k. Shipping and Handling Fees and Costs  The
Company records all shipping and handling cost in cost of goods sold.      F-13





REFLECT SCIENTIFIC, INC. AND SUBSIDIARIES Notes to the
Consolidated Financial Statements December 31, 2007 and
2006  NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)  l. Income Taxes  Deferred taxes are provided on a liability method whereby deferred
tax assets are recognized for deductible temporary differences and operating
loss and tax credit carryforwards and deferred tax liabilities are recognized
for taxable temporary differences. Temporary differences are the differences
between the reported amounts of assets and liabilities and their tax bases.
 Deferred tax assets are reduced by a valuation allowance when, in the
opinion of management, it is more likely than not that some portion or all of
the deferred tax assets will not be realized.  Deferred tax assets and
liabilities are adjusted for the effects of changes in tax laws and rates on the
date of enactment.  The provision
(benefit) for income taxes for the year ended December 31, 2007 and 2006 consist
of the following:  2007

2006Federal:Current
$
-

$
(291,336)Deferred

235,493State:Current

950


100Deferred

41,557


(51,512)$
278,000

$
(342,748)  Net
deferred tax assets consist of the following components as of December 31, 2007
and 2006:  2007

2006Deferred tax assets:NOL
Carryover
$
808,420

$
315,993Deferred
tax assets from 2006

315,993Deferred tax
liabilities:Depreciation

-


-Valuation
allowance

(1,086,413)Net
deferred tax asset (liability)
$
38,000

$
315,993 The income tax
provision differs from the amount of income tax determined by applying the U.S.
federal and state income tax rates of 34% to pretax income from continuing
operations for the year ended December 31, 2006 and 2006 due to the following.  F-14





REFLECT SCIENTIFIC, INC. AND SUBSIDIARIES Notes to the
Consolidated Financial Statements December 31, 2007 and
2006  NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)  j. Income Taxes (Continued) 2007

2006Expected Tax Expense
$
(2,312,979)

$
(451,284)Meals &
Entertainment

523


1,398Stock for Services

1,504,188


134,045Depreciation

(152)


(152)Income Tax

-


-(808,420)


(315,993)  Due to the change
in ownership provisions of the Tax Reform Act of 1986, net operating loss
carryforwards for Federal income tax reporting purposes are subject to annual
limitations.  Should a change in ownership occur, net operating loss
carryforwards may be limited as to use in future years.  At December 31,
2006, the Company had net operating loss carryforwards of approximately $929,400
that may be offset against future taxable income from the year 2006 through
2026.  During 2007 the company reevaluated its deferred tax assets and
concluded that the asset should be limited to the amount of the asset that is
available for NOL carryback.  The valuation allowance was increased and
leaves the company with a deferred tax asset of $38,000 as of December 31,
2007.  Prior to the
reverse acquisition of Reflect by Cole, Inc. the Company was a subchapter S
corporation. All income and expenses were passed through to the Companys
shareholder, therefore no tax liabilities existed at December 31, 2003.  The
Company adopted the provisions of FASB Interpretation No. 48, Accounting for
Uncertainty in Income Taxes, on January 1, 2007.  As a result of the
implementation of Interpretation 48, the Company recognized no increase in the
liability for unrecognized tax benefits.  Included in the balance at December 31, 2007, are notax
positions for which the ultimate deductibility is highly certain but for which
there is uncertainty about the timing of such deductibility.  Because of
the impact of deferred tax accounting, other than interest and penalties, the
disallowance of the shorter deductibility period would not affect the annual
effective tax rate but would accelerate the payment of cash to the taxing
authority to an earlier period.  m.
 Principles of consolidation  The consolidated
financial statements include the accounts of the Company and its subsidiaries,
which include Cryometrix (previously Cryomastor), All Temp Engineering and Image
Labs International.  All subsidiaries are wholly owned.  All material
intercompany accounts and transactions are eliminated in consolidation.  n Research and
development expense  The
Company accounts for research and development costs in accordance with the
Financial Accounting Standards Board's Statement of Financial Accounting
Standards No. 2 ("SFAS 2"), "Accounting for Research and Development
Costs".  Under SFAS 2, all research and development costs must be charged
to expense as incurred. Accordingly, internal research and development costs are
expensed as incurred.  Third-party research and developments costs are
expensed when the contracted work has been performed or as milestone results
have been achieved.  Company-sponsored research and development costs
related to both present and future products are expensed in the period
incurred.  The Company had $198,396 and $13,261 in research and product
development for the years ended December 31, 2007 and 2006, respectively. F-15





REFLECT SCIENTIFIC,
INC. AND SUBSIDIARIES Notes to the
Consolidated Financial Statements December 31, 2007 and
2006  NOTE 3 - FIXED ASSETS  Fixed assets are stated at cost.  Expenditure for minor
repairs, maintenance, and replacement parts which do not increase the useful
lives of the assets are charged to expense as incurred.  All major
additions and improvements are capitalized.  Depreciation is computed using
the straight-line method.  The lives over which the fixed assets are
depreciated range from 5 to 7 years.  Fixed assets and related depreciation
for the period are as follows:  December 31,
2007Machinery
and equipment
$
169,826Furniture
and fixtures

50,608Computer and
office equipment

32,103Vehicles

34,325Leasehold
improvements

33,799Accumulated
depreciation

(60,777)Total
Fixed Assets
$
259,884  Depreciation expense for the years ended December 31, 2007, and
2006, was $46,336 and $11,238, respectively.  NOTE 4 - INVENTORIES  Inventory consisted of the following at December 31, 2007:  Finished
goods
$
727,970Total
Inventory
$
727,970  NOTE 5- COMMITMENTS AND CONTINGENCIES  Operating Lease Obligations  The
Company leases its office and warehouse space under non-cancelable lease
agreements accounted for as operating leases.  The Company also leases
several automobiles under similar non-cancelable lease agreements, which are
also accounted for as operating leases.  Minimum rental payments under the non-cancelable operating leases
are as follows:  Years
ending
December
31,

Amount2008
$
244,4652009

205,2722010

45,7022011

-2012

-$
495,439            F-16





REFLECT SCIENTIFIC,
INC. AND SUBSIDIARIES Notes to the
Consolidated Financial Statements December 31, 2007 and
2006  NOTE 5- COMMITMENTS AND CONTINGENCIES (continued)  Operating Lease Obligations (continued)  Rent expense was $243,871 and $62,906 for the years ended December
31, 2007, and 2006, respectively.  Automobile lease expense was $11,097 and $10,673 for the years
ended December 31, 2007, and 2006, respectively.  NOTE 6- CAPITAL LEASES  During
the year ended 2006, the Company entered into two capital lease arrangements for
the purchase of equipment.  Payments are due in 60 and 36 monthly
installments of $920 and $1,101.  The leases have a stated interest rate of
8.3% Aggregate
maturities on the capital leases as of December 31, 2007, are due in future
years as follows:  2008
$
19,9362009

21,6552010

10,4002011

8,1722012

-60,163Less
current portion

20,016$
40,147  Depreciation expense on equipment under capital leases was $12,655
and $ - for the years ended December 31, 2007 and 2006, respectively.  NOTE 7 - PREFERRED STOCK  In
November 2004 the Company amended its Articles of Incorporation so as to
authorize 5,000,000 shares of preferred stock. 750,000 of these shares have been
designated as Series A Convertible Preferred Stock. During the year ended
December 31, 2006 theses shares were offered in a private placement. As of
December 31, 2007 no shares of the preferred stock are issued and
outstanding.  Dividends  The
holders of the Series A Preferred Stock are entitled to dividends at the rate of
8 percent per year of the liquidation preference of $1.00 per share, payable
annually, if and when declared by the board of directors.  Dividends are
not cumulative and the board of directors are under no obligation to declare
dividends.  Convertibility  Upon the approval of the Board of Directors, Series A Preferred
Stock may be convertible into the Companys common stock by dividing $1.00 plus
any unpaid dividends by 50% of the five day average closing bid price of the
common shares. F-17





REFLECT SCIENTIFIC,
INC. AND SUBSIDIARIES Notes to the
Consolidated Financial Statements December 31, 2007 and
2006  NOTE 7 - PREFERRED STOCK (continued)  Convertibility  (continued)  During 2005 the Company sold 700,000 shares of Series A
Convertible Preferred Stock in exchange for proceeds of $700,000.  As a
result of the beneficial conversion feature inherent in the conversion rights
and preferences of Series A Preferred Stock, the Company has recognized a deemed
dividend of $700,000.  This deemed dividend was calculated based on the
conversion price above at the time of conversion.  Because the Company does
not have sufficient retained earnings, dividends were recorded in additional
paid-in-capital and have a net effect of zero in that account and is therefore
not presented on the statement of shareholders equity as a separate item.
 This beneficial conversion feature was recorded to additional paid in
capital and will be recorded as a deemed dividend to preferred shareholders
(accretion) over the period to the instruments earliest conversion date.  In
November, 2005 690,000 shares of Preferred Stock were converted into 1,150,002
shares of Common Stock at $0.60 per share.  During 2006, the remaining 10,000 shares of Preferred Stock were
converted into 16,667 shares of Common stock.  NOTE 8 - COMMON STOCK TRANSACTIONS  During the year ended December 31, 2007, the Company issued
336,336 shares of commom stock for a stock subscription; 431,235 shares of
common stock for services valued at $445,526; 168,001 shares issued for cash of
$145,661; 1,000,000 shares issued pursuant to the merger with All Temp valued at
$1,060,000; 525,000 shares issued pursuant to the purchase of Image Labs
International valued at $509,250; and 500,000 shares to a key employee in return
for a 3 year employment contract, valued at $490,000; 42,593 shares issued for
the cashless exercise of warrants; and 38,462 shares were issued for the
conversion $25,000 of debt.  NOTE 9 - CONCENTRATIONS OF RISK  Cash in Excess of Federally Insured Amount  The
Company currently maintains a cash balance at a single financial institution in
excess of the federally insured maximum of $100,000.  Revenues and Accounts Receivable  For
the year ended December 31, 2007 the Company had two significant customers that
account for $1,749,794 or 22% of sales. These same two customers also account
for $240,032 or 17%  of the total accounts receivable balance at December
31, 2007,   For
the year ended December 31, 2006 the Company had three significant customers
that account for $2,045,506 or 80% of sales. These same three customers also
account for $295,120 or 76% of the total accounts receivable balance at December
31, 2006..     F-18





REFLECT SCIENTIFIC,
INC. AND SUBSIDIARIES Notes to the
Consolidated Financial Statements December 31, 2007 and
2006  NOTE 10 -
  ACQUISITIONS  Effective April 19, 2006, the Company entered into a merger
agreement with Cryomastor Inc.   As part of this agreement, the
Company received assets valued at the following:   Patents
$
3,081,777Customer lists

480,000Goodwill

888,223$
4,450,000  The patents and customer lists are amortized over a range of 9-20
years.  Amortization expense for the year ended December 31, 2006 was
$100,472.  As consideration for these assets, the Company issued 3,000,000
shares at $1.25 of its common stock that are restricted securities to the
shareholders of Cryomastor, Inc. as well as paid $700,000 to the same
shareholders.  The Company also advanced $300,000 to be utilized for the
operations of Cryomastor, Inc. and paid a $300,000 debt of Cryomastor, Inc. for
a U.S. patent of Cryomastor systems.  An employment agreement will be
executed and the Company will pay to the Cryomastor shareholders 2.5% of the
gross annual revenue earned by the Company.  As part of the execution and delivery of the Merger Agreement, the
Company offered a minimum of 1,000,000 shares of common stock at $1 per share to
accredited investors.  To date the Company has sold 1,073,500 shares.  The Company acquired Cryomaster because the business was
synergistic with the Company as they both serve the Biotech industry.  The
business offers a growth opportunity for the Company because of products that
can fill a market need.  Effective April 4, 2006 the Company entered into an agreement to
purchase JM SciTech, LLC.  Pursuant to this agreement, the Company
purchased and JM SciTech, LLC sold all rights, title and interest in and to the
JMST Technology.  This resulted in the Company obtaining assets valued as
follows:  Intangible assets
$
350,000Goodwill

240,000$
590,000  As consideration for the JMST Technology, the Company issued
200,000 shares at $1.70 of its common stock that are restricted securities, paid
the sum of $250,000, and will pay certain royalty payments as outlined in the
agreement.  As part of this agreement, the Company issued 400,000 shares of
common stock that are restricted securities as defined in Rule 144 to
accredited investors F-19





REFLECT SCIENTIFIC,
INC. AND SUBSIDIARIES Notes to the
Consolidated Financial Statements December 31, 2007 and
2006  NOTE 10 -   ACQUISITIONS
(continued)  only, to finance the acquisition of JM SciTech, LLC.  These
shares were sold at a price of $0.80 per share.  None of these shares were
accorded registration rights of any kind.  The Company
acquired JMST because the business was synergistic with the Company as they both
serve the Biotech industry.  The business offered a strong growth
opportunity, a successful business model, ongoing sales, innovation and four
patents.  Effective January 19, 2007, the Company finalized an Agreement and
Plan of Merger  (the Merger Agreement) with All Temp Engineering, Inc.
 As part of this agreement, the Company received assets valued at the
following:  Trade
secrets
$
262.875Trademarks

65,719Customer lists

592,127Customer assets

139,279$
1,060,000  The
assets are amortized over a range of 9-10 years.   As consideration
for these assets, the Company issued 1,000,000 shares at $1.06 of its common
stock that are restricted securities to the shareholders of All Temp
Engineering, Inc. and will pay the shareholders a pro-rata running royalty
totaling five percent of the gross annual revenues that will be earned on All
Temps business that will be ran as a separate division within the Company.         F-20





An unaudited pro
forma balance sheet as of December 31, 2006, and a pro forma income statement
for the year ended December 31, 2006, for the combined (post merger) entity, is
presented below:   Reflect As of
December 31, 2006

All Temp As of
December 31, 2006

Combined
Historical Reflect & All Temp

Pro Forma
Adjustments

Pro Forma Combined
Reflect & All Temp December 31, 2006ASSETSCurrent Assets:Cash
$
271,038

$
-

$
271,038

$
-

$
271,038
(1)Notes receivable

-


96,236


96,236


-


96,236
(1)Receivables

389,591


162,596


552,187


-


552,187Inventory

364,796


97,825


462,621


-


462,621Prepaid assets

13,852


8,189


22,041


-


22,041Total Current Assets

1,039,277


364,846


1,404,123





1,404,123Fixed Assets, (net)

211,021


4,595


215,616


-


215,616Other Assets:Deposits

13,400


3,672


17,072


-


17,072Income Tax receivable

25,948


4,786


30,734





30,734Deferred tax asset

316,000


72,555


388,555





388,555Intangibles (net)

4,736,827


-


4,736,827


2,619,372


7,356,199
(1)Total Other Assets

5,092,175


81,013


5,173,188


2,619,372


7,792,560TOTAL ASSETS
$
6,342,473

$
450,454

$
6,792,927

$
2,619,372

$
9,412,299          F-21





Reflect As of
December 31, 2006

All Temp As of
December 31, 2006

Combined
Historical Reflect & All Temp

Pro Forma
Adjustments

Pro Forma Combined
Reflect & All Temp December 31, 2006LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)Current Liabilities:Short term loan
$
18,353

$
600,054

$
618,407

$
-

$
618,407Cash overdraft

-


55,640


55,640


-


55,640Accounts payable

225,721


272,789


498,510


-


498,510Accrued liabilities

25,949


7,209


33,158


-


33,158Income taxes payable

400


800


1,200


-


1,200Total Current
Liabilities

270,423


936,492


1,206,915





1,206,915Non-current liabilities:Notes payable

61,706


-


61,706


-


61,706Total non-current
Liabilities

61,706


-


61,706


-


61,706Total Liabilities
$
332,129

$
936,492

$
1,268,621

$
-

$
1,268,621Stockholders' Equity:Preferred Stock

-


-


-


-


-Common stock

306,889


13,334


320,223


(13,334)



(1)20,000


326,889
(1)Additional Paid-in
capital

6,979,735


-


6,979,735


13,334



(1)2,100,000


9,093,069Subscription
 receivable

257,251


-


257,251


-


257,251Accumulated deficit

(1,533,531)


-


(1,533,531)


-


(1,533,531)Accumulated deficit

-


(499,372)


(499,372)


499,372


-Total Stockholders'
Equity

6,010,344


(486,038)


5,524,306


2,619,372


8,143,678TOTAL LIABILITIES AND
SHAREHOLDERS EQUITY
$
6,342,473

$
450,454

$
6,792,927

$
2,619,372

$
9,412,299





Reflect As of
December 31, 2006
All Temp as of
December 31, 2006
Combined
Historical Reflect & All Temp
Pro Forma
Adjustment
Pro Forma Combined
Reflect & All Temp December 31, 2006Sales
$
2,572,955
$
1,871,737
$
4,444,692
$
-
$
4,444,692Cost of Sales

1,519,547

1,138,382

2,657,929

-

2,657,929Salaries and wages

779,579

539,843

1,319,422

-

1,319,422Payroll Taxes

35,767

64,603

100,370

-

100,370Rent expense

62,906

57,569

120,475

-

120,475General &
Administrative

1,303,598

506,293

1,809,891

-

1,809,891Income (loss) from
operations

(1,128,442)

(434,953)

(1,563,395)

-

(1,563,395)Other income (expense)

(192,911)

(101,281)

(294,192)

-

(294,192)Interest expense

25

34,961

34,986

-

34,986Total other income
(expense)

(192,936)

(136,242)

(329,178)

-

(329,178)Income tax expense
(benefit)

(342,748)

(84,208)

(426,956)

-

(426,956)Net Income (loss)
$
(978,630)
$
(486,987)
$
(1,465,617)
$
-
$
(1,465,617)Basic loss per share

(0.03)Weighted average shares
Outstanding

28,432,024   Effective March 6, 2007, the Company finalized an Agreement and
Plan of Merger (the Merger Agreement) with Image Labs, International.  As
part of the Merger Agreement,  the Company received assets valued at the
following:  Trade
secrets
$
184,400Trademarks

70,000Customer lists

154,850IP Patent

105,000Inventory

125,000$
639,250   The
assets are amortized over a range of 9-10 years.  As consideration for
these assets, the Company issued 525,000 shares at $.97 of its common stock that
are restricted securities to the shareholder of Image Labs and paid the sum of
$200,000 and agreed to pay the shareholder a 2.5 percent Running Earnout
Purchase Price. An Employment Agreement was also executed and delivered.
 As a condition to the closing of the Merger Agreement, the Company has
raised approximately $500,000 to support the Catpro business segment of Image
Labs that is to be operated as a separate business segment under the
Company.  An unaudited pro forma balance sheet
as of December 31, 2006, and a pro forma income statement for the year ended
December 31, 2006, for the combined (post merger) entity, is presented
below: F-23





Reflect As of
December 31, 2006

Image Labs As of
December 31, 2006

Combined
Historical Reflect & Image Labs

Pro Forma
Adjustments

Pro Forma Combined
Reflect & Image Labs December 31, 2006ASSETSCurrent Assets:Cash
$
271,038

$


$
271,038

$
(200,000)

$
71,038
(1)Receivables

389,591


1,118,775


1,508,366


-


1,508,366Inventory

364,796


80,157


444,953


35,019


479,972Prepaid assets

13,852


141,117


154,969


-


154,969Total Current Assets

1,039,277


1,340,049


2,379,326


(164,981)


2,214,345Fixed Assets, (net)

211,021


30,798


241,819


-


241,819Other Assets:Deposits

13,400


2,251


15,651


-


15,651Income Tax receivable

25,948


-


25,948





25,948Deferred tax asset

316,000


-


316,000





316,000Intangibles (net)

4,736,827


-


4,736,827


-


4,736,827
(1)Total Other Assets

5,092,175


2,251


5,094,426


-


5,094,426TOTAL ASSETS
$
6,342,473

$
1,373,098

$
7,715,571

$
(164,981)

$
7,550,590          F-24





Reflect As of
December 31, 2006

Image Labs As of
December 31, 2006

Combined
Historical Reflect & Image Labs

Pro Forma
Adjustments

Pro Forma Combined
Reflect & Image Labs December 31, 2006LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)Current Liabilities:Short term loan
$
18,353

$
-

$
18,353

$
-

$
18,353Cash overdraft

-


56,589


56,589


-


56,589Accounts payable

225,721


199,817


425,538


-


425,538Accrued liabilities

25,949


22,485


48,434


-


48,434Income taxes payable

400


-


400


-


400Total Current
Liabilities

270,423


278,891


549,314





549,314Non-current liabilities:Notes payable

61,706


-


61,706


-


61,706Contract billing in
excess

-


419,976


419,976





419,976Total non-current
Liabilities

61,706


419,976


481,682


-


481,682Total Liabilities
$
332,129

$
698,867

$
1,030,996

$
-

$
1,030,996Stockholders' Equity:Preferred Stock

-


-


-


-


-Common stock

306,889


100


306,989


(100)


306,889
(1)Additional Paid-in
capital

6,979,735


4,900


6,984,635


100



(1)-


-


-


504,250


7,788,985Subscription
 receivable

257,251


-


257,251


-


257,251Accumulated deficit

(1,533,531)


-


(1,533,531)


-


(1,533,531)Retained earnings

-


669,231


669,231


(669,231)


-Total Stockholders'
Equity

6,010,344


674,231


6,684,575


(164,981)


6,519,594TOTAL LIABILITIES AND
SHAREHOLDERS EQUITY
$
6,342,473

$
1,373,098

$
7,715,571

$
(164,981)

$
7,550,590  F-25





Reflect As of
December 31, 2006
All Temp as of
December 31, 2006
Combined
Historical Reflect & All Temp
Pro Forma
Adjustment
Pro Forma Combined
Reflect & All Temp December 31, 2006Sales
$
2,572,955
$
3,756,303
$
6,329,258
$
-
$
6,329,258Cost of Sales

1,519,547

2,427,651

3,947,198

-

3,947,198Salaries and wages

779,579

425,413

1,204,992

-

1,204,992Payroll Taxes

35,767

34,823

70,590

-

70,590Rent expense

62,906

40,708

103,614

-

103,614General &
Administrative

1,303,598

415,342

1,718,940

-

1,718,940Income (loss) from
operations

(1,128,442)

412,366

(716,076)

-

(716,076)Other income (expense)

(192,911)

(20,979)

(213,890)

-

(213,890)Interest expense

(25)

(12,037)

(12,062)

-

(12,062)Total other income
(expense)

(192,936)

(33,016)

(225,952)

-

(225,952)Income tax expense
(benefit)

(342,748)

-

(342,748)

-

(342,748)Net Income (loss)
$
(976,630)
$
379,350
$
(597,280)
$
-
$
(597,280)Basic loss per share

(0.03)

37.93

(37.90)



(0.02)Weighted average shares
Outstanding

28,432,024

10,000

28,442,024

-

28,442,024    F-26





REFLECT SCIENTIFIC,
INC. AND SUBSIDIARIES Notes to the
Consolidated Financial Statements December 31, 2007 and
2006   NOTE 11  CONVERTIBLE
DEBENTURES AND WARRANTS  On
June 29, 2007, the Company entered into an agreement to sell $2,500,000 in 12%
senior convertible debentures with a maturity date of June 29, 2009, with
interest due quarterly.   At the closing, the Company prepaid the
first quarterly interest payment and reserved the second quarterly interest
payment for a total of $150,000.  The agreement allows for the Company to
pay the interest in cash or in duly authorized, validly issued, fully paid and
non-assessable shares of common stock at the interest conversion rate, or a
combination thereof.  The
debentures have a conversion price of $0.65.  If the Company, at any time
while the debenture is outstanding, pays stock dividends, subdivides outstanding
shares, sells or grants any option to purchase or dispose of common stock at an
effective price lower than the conversion price, issue rights, options or
warrants at a price lower than the conversion price, etc., the Company shall
promptly deliver to each Holder a notice setting forth the conversion price
after such adjustment and provide a brief statement of facts requiring such
adjustment.   In addition, if the volume weighted average price for
each of any 20 consecutive trading days exceeds 250% of the conversion price,
the Company may, within one trading day deliver a written notice to the holder
and force the holder to convert a principal amount of the debenture equal to all
or part of the holders portion of the forced conversion amount.  The
agreement also provides for the issuance of 1,923,077 A warrants and 1,923,077 B
warrants.  The warrants are exercisable at a price of $0.80 per share for
the A warrant and $1.00 per share for the B warrant and expire June 29, 2012.
 The Company valued the warrants using the Black-Scholes option pricing
model.  For the purpose of the valuation of the warrants, the Company
calculated a volatility of 66.48% on its common stock and used the U. S.
Treasury bill rate of 4.94% for its risk free rate.  Then the Company
allocated a portion of the proceeds to the warrants, based on the relative fair
value basis, in the amount of $1,639,029 which is recognized as a contra
liability account and will be amortized as interest expense over the 2 year term
of the agreement.  The intrinsic value of beneficial conversion of the
debentures was valued at $5,677,491, which exceeds the effective value of the
debentures of $860,971.  Therefore, the discount assigned to the beneficial
conversion feature is limited to $860,971 and is recognized as a contra
liability account and will be amortized as interest expense over the 2 year term
of the agreement.  As
payment for services provided, the Company also issued 192,308 A warrants and
192,308 B warrants which were valued at $475,925 using the Black-Scholes option
pricing model and expensed in the current period.  The
debentures and warrants have anti-dilution protections, and the Company has
agreed to certain registration rights for the resale of the shares of common
stock underlying the debentures and warrants.  A
summary of the status of the Companys outstanding stock warrants as of December
31, 2007 and changes during the period then ended is presented below:     F-27





REFLECT SCIENTIFIC, INC. AND SUBSIDIARIES Notes to the
Consolidated Financial Statements December 31, 2007 and
2006  NOTE 11  CONVERTIBLE
DEBENTURES AND WARRANTS (continued)  2007Shares

Weighted Average
Exercise PriceOutstanding,
beginning of year
-

$
-Granted
4,230,770


.90Expired/Cancelled
-


-Exercised
78,875


.80Outstanding end
of year
4,151,895

$
.90Exercisable
4,151,895

$
.90  Outstanding

ExercisableRange of Exercise
Prices

Number outstanding
at December 31, 2007

Weighted Average
Remaining Contractual Life

Number Exercisable
at December 31,2007$
0.80

2,036,510

4.50

2,036,5101.00

2,115,385

4.50

2,115,3854,151,895



4,151,895  NOTE 12  COMMON STOCK
OPTIONS  On
December 31, 2007, the Companys board of directors approved an equity plan.
 The equity plan known as the 2007 Equity Incentive Plan (the Plan)
reserves up to 6,000,000 shares of the Companys authorized common stock for
issuance to officers, directors, employees and consultants under the terms of
the Plan.  The Plan permits the board of directors to issue stock options
and restricted stock.  The
fair value of each option granted under the Plan is estimated on the date of
grant, using the Black-Scholes option pricing model, based on the following
weighted average assumptions: 12/31/2007Expected
life (years)

5.0Expected
stock price volatility

66.27
%Expected
dividend yield

0.0
%Risk-free
interest rate

3.38
%  The
risk-free interest rate is based upon the U.S. Treasury yield curve at the time
of grant for the respective expected life of the option. The expected life
(estimated period of time outstanding) of options was estimated.  The
expected volatility of the Companys options was calculated using historical
data. Expected dividend yield was not considered in the option pricing formula
since the Company does not pay dividends and has no current plans to do so in
the future. If actual periods of time outstanding and rate of forfeitures
differs from the expected rates, the Company may be required to make additional
adjustments to compensation expense in future periods.  The
Company issued options to key directors on December 31, 2007.  A summary of
the status of the Companys outstanding stock options as of December 31, 2007
and changes during the period then ended is presented below: F-28





REFLECT SCIENTIFIC,
INC. AND SUBSIDIARIES Notes to the
Consolidated Financial Statements December 31, 2007 and
2006  NOTE 12  COMMON STOCK
OPTIONS (continued) 2007Shares

Weighted Average
Exercise PriceOutstanding,
beginning of year
-

$
-Granted
5,000,000


1.32Expired/Cancelled
-


-Exercised
-


-Outstanding end
of year
5,000,000

$
1.32Exercisable
5,000,000

$
1.32  Outstanding

ExercisableRange of Exercise
Prices

Number outstanding
at December 31, 2007

Weighted Average
Remaining Contractual Life

Number Exercisable
at December 31,2007$
1.32

4,800,000

5.00

4,800,0001.20

200,000

5.00

200,0005,000,000



5,000,000  The
total fair value of options vested was $3,353,557 for the year ended December
31, 2007.  As of December 31, 2007, there was no unrecognized compensation
cost related to non-vested stock options granted under the Plan.  NOTE 13  INTANGIBLE
ASSETS  Intangible assets are stated at cost.  Amortization computed
using the straight-line method.  The lives over which the intangible assets
are amortized range from 10 to 20 years.  Intangible assets and related
amortization for the period are as follows: AccumulatedCost
Amortization
Net Book ValueTrademarks
$
      135,719
$
      11,858
$
       123,861Trade Secrets
437,875
38,680
399,195Patents
3,516,177
319,771
3,196,406Customer lists
1,326,977
145,626
1,181,351Goodwill
948,223
0
948,223Totals
$
   6,364,971
$
     515,935
$
    5,849,036  Amortization expense for the years ended December 31, 2007, and
2006, was $370,337 and $123,173, respectively.  F-29





REFLECT SCIENTIFIC,
INC. AND SUBSIDIARIES Notes to the
Consolidated Financial Statements December 31, 2007 and
2006  Note 14  Change in
Accounting Estimate  During 2008 management assessed its estimates of the useful lives
of the customer lists it acquired in 2006.  Based on this assessment
management has revised the useful lives of these assets from 20 to 10 years.
 The effects of this change in accounting estimate have been reflected in
the companys 2007 financial statements and are as follows:  Decrease in Operating income $33,694 Earnings per share $    0.00   NOTE 14  SUBSEQUENT
EVENTS.  Subsequent to December 31, 2007, the Company issued 94,615 shares
of its common stock.  The shares were issued as a partial conversion of our
debenture.  $61,500 of the debenture was converted at $0.65 per share.           F-30