UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


WASHINGTON,
      D.C. 20549





**FORM
      10-Q**





x QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES


EXCHANGE
      ACT OF 1934





For
      the
      quarterly period ended June 30, 2008





o TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE


SECURITIES
      EXCHANGE ACT OF 1934





For
      the
      transition period from _______ to _______





**FORGEHOUSE,
      INC.**


**(Exact
      name of registrant as specified in Charter)**





Nevada
            
            333-124304
            
            20-1904354**(State
                or other jurisdiction of**
              **incorporation
                or organization)**
            
            **(Commission
                File No.)**
            
            **(IRS
                Employee Identification
                No.)**





4625
      Alexander Dr, Suite 150


Alpharetta,
      Georgia 30005


**(Address
      of Principal Executive Offices)**





(404)
      643-6038


**(Issuer
      Telephone number)**





1575
      Northside Drive NW, Building 300, Suite 375


Atlanta,
      Georgia, 30318


**(Former
      name or former address, if changed since last report)**





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





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





Indicate
      the number of shares outstanding of each of the issuer's classes of common
      equity, as of the latest practicable date: 28,289,834 shares of common
      stock issued and outstanding at August 14, 2008.





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





(Check
      one):





Large
                accelerated filero
            Accelerated
                fileroNon-accelerated
                filero
            Smaller
                reporting companyx





FORGEHOUSE,
      INC.


FORM
      10-Q


QUARTERLY
      PERIOD ENDED JUNE 30, 2008





INDEX





A
                Note About Forward Looking Statements
            1PART
                I – FINANCIAL INFORMATIONItem
                1 – Financial StatementsBalance
                Sheet (Unaudited) - June 30, 2008
            F-1Statement
                of Operations (Unaudited) - For the three and six months ended June
                30,
                2008
            F-2Statement
                of Cash Flows (Unaudited) - For the six months ended June 30,
                2008
            F-3Notes
                to Unaudited Financial Statements
            F-5Item
                2 – Management's Discussion and Analysis of Financial Condition or Results
                of Operation
            2Item
                4 – Controls and Procedures
            7PART
                II – OTHER INFORMATIONItem
                2 – Unregistered Sales of Equity Securities and Use of Proceeds
            8Item
                6 – Exhibits
            9Signatures
            11





**A
      Note About Forward-Looking Statements**





This
      Quarterly Report on Form 10-Q contains “forward-looking statements” within the
      meaning of the Private Securities Litigation Reform Act of 1995 that are based
      on management's current expectations. These statements may be identified by
      their use of words like “plans,” “expect,” “aim,” “believe,” “projects,”
“anticipate,” “intend,” “estimate,” “will,” “should,” “could” and other
      expressions that indicate future events and trends. All statements that address
      expectations or projections about the future, including statements about our
      business strategy, expenditures, and financial results, are forward-looking
      statements. We believe that the expectations reflected in such forward-looking
      statements are accurate. However, we cannot assure you that such expectations
      will occur.





Actual
      results could differ materially from those in the forward looking statements
      due
      to a number of uncertainties including, but not limited to, those discussed
      in
      Management’s Discussion and Analysis of Financial Condition and Results of
      Operations. Factors that could cause future results to differ from these
      expectations include general economic conditions; further changes in our
      business direction or strategy; competitive factors; market uncertainties;
      and
      an inability to attract, develop, or retain consulting or managerial agents
      or
      independent contractors. As a result, the identification and interpretation
      of
      data and other information and their use in developing and selecting assumptions
      from and among reasonable alternatives requires the exercise of judgment. To
      the
      extent that the assumed events do not occur, the outcome may vary substantially
      from anticipated or projected results, and accordingly, no opinion is expressed
      on the achievability of those forward-looking statements. No assurance can
      be
      given that any of the assumptions relating to the forward-looking statements
      specified in the following information are accurate, and we assume no obligation
      to update any such forward-looking statements. You should not unduly rely on
      these forward-looking statements, which speak only as of the date of this
      Quarterly Report. Except as required by law, we are not obligated to release
      publicly any revisions to these forward-looking statements to reflect events
      or
      circumstances occurring after the date of this report or to reflect the
      occurrence of unanticipated events.


1
  **ForgeHouse,
        Inc.**
  **Combined
        Financial Statements**
 
 ***As
        of June 30, 2008 and***
 ***For
        Each of the Three and Six Month Periods Ended June 30, 2008 and
        2007***
 
 
  **ForgeHouse,
        Inc.**
  **Index
        to the Combined Financial Statements**
 ***As
        of June 30, 2008 and***
 ***For
        Each of the Three and Six Month Periods Ended June 30, 2008 and 2007***
 
 Combined
                  Financial Statements of ForgeHouse, Inc.(a Nevada
                  Corporation):Combined
                  Balance Sheet as of June 30, 2008
              
              
              F-1Combined
                  Statements of Operations for Each of the Three and Six Month Periods
                  Ended
                  June 30, 2008 and 2007
              
              
              F-2Combined
                  Statements of Cash Flows for Each of the Six Month Periods Ended
                  June 30,
                  2008 and 2007
              
              
              F-3Notes
                  to Combined Financial Statements
              
              
              F-5
 
 
  **ForgeHouse,
        Inc.**
  **Combined
        Balance Sheet**
 ***June
        30, 2008***
 
 As
                  of
              
              As
                  ofJune 30, 2008
              
              December 31, 2007*ASSETS*Current
                  assets:Cash
              
              $
              136,657
              
              
              -Accounts
                  receivable - trade
              
              
              33,064
              
              $
              42,323Inventory
              
              
              12,105
              
              
              -Subscription
                  receivable
              
              
              10,000
              
              
              -Prepaid
                  insurance
              
              
              10,431
              
              
              7,052Escrowed
                  funds
              
              
              56,262
              
              
              7,114Total
                  current assets
              
              
              258,519
              
              
              56,489Equipment,
                  net of accumulated depreciation of $31,546 and $28,142,
                  respectively
              
              
              27,511
              
              
              14,123Software
                  development costs, net of accumulated amortization of $112,667
                  and
                  $95,333
              
              
              60,667
              
              
              78,000Deposit
              
              
              3,623
              
              
              -**Total
                  assets**
              
              **$**
              **350,320**
              
              **$**
              **148,612***LIABILITIES
                  AND STOCKHOLDERS' DEFICIT*Current
                  liabilities:Cash
                  overdraft
              
              
              -
              
              $
              9,712Accounts
                  payable - trade
              
              $
              771,546
              
              
              655,662Related
                  party payable
              
              
              28,767
              
              
              120,559Accrued
                  payroll and related expenses
              
              
              110,029
              
              
              27,198Accrued
                  expenses
              
              
              14,615
              
              
              184,805Accrued
                  interest on notes payable
              
              
              35,044
              
              
              648,029Current
                  portion of obligations under capital leases
              
              
              4,534
              
              
              4,262Deferred
                  revenue
              
              
              5,340
              
              
              -Related
                  party notes payable - current
              
              
              -
              
              
              580,000Notes
                  payable - current
              
              
              280,000
              
              
              149,657Total
                  current liabilities
              
              
              1,249,875
              
              
              2,449,242Obligations
                  under capital leases
              
              
              2,061
              
              
              4,398Related
                  party notes payable, less current portion
              
              
              -
              
              
              1,120,000Notes
                  payable, less current portion
              
              
              1,120,000
              
              
              -**Total
                  liabilities**
              
              **$**
              **2,371,936**
              
              **$**
              **3,504,282**Commitments
                  and contingenciesStockholders'
                  deficit:Preferred
                  stock, par value $0.001 with 10,000,000 shares authorized and 2,000,000
                  shares issued as Series A Convertible preferred stock
              
              
              -
              
              
              -Series
                  A Convertible Preferred stock, par value $0.001, 2,000,000 shares
                  authorized, 2,000,000 shares issued and outstanding. Senior as
                  to all
                  other equity instruments, voting and with a dividend rate of 4%
                  of the
                  stated liquidation preference amount of $2,000,000
              
              $
              2,000
              
              
              -Common
                  stock, $.001 par value, 100,000,000 shares authorized, 28,289,834
                  shares
                  issued and outstanding
              
              
              28,290
              
              
              -Additional
                  paid in capital
              
              
              4,380,394
              
              $
              1,263,978Accumulated
                  deficit
              
              
              (6,432,300
              )
              
              (4,619,648
              )**Total
                  stockholders' deficit**
              
              **$**
              **(2,021,616**
              **)**
              **$**
              **(3,355,670**
              **)****Total
                  liabilities and stockholders' deficit**
              
              **$**
              **350,320**
              
              **$**
              **148,612**
  The
        accompanying notes are an integral part of the combined financial
        statements.
 F-1
  **ForgeHouse,
        Inc.**
  **Combined
        Statements of Operations**
 ***For
        Each of the Three and Six Month Periods Ended June 30, 2008 and
        2007***
 
 For the Six Month
                Period Ended June 30,
              
              For the Three Month
                Period Ended June 30,2008
              
              2007
              
              2008
              
              2007Service
                  contract revenue
              
              $
              86,616
              
              $
              76,955
              
              
              40,488
              
              
              55,559Product
                  revenue
              
              
              32,344
              
              
              50,482
              
              
              9,658
              
              
              46,608Net
                  revenues
              
              
              118,960
              
              
              127,437
              
              
              50,146
              
              
              102,167Operating
                  expenses:Costs
                  of revenues
              
              
              45,185
              
              
              57,417
              
              
              22,289
              
              
              43,267Software
                  development costs
              
              
              92,464
              
              
              190,698
              
              
              45,607
              
              
              125,226Payroll
                  related expenses
              
              
              489,424
              
              
              97,546
              
              
              257,144
              
              
              44,935Professional
                  fees
              
              
              326,699
              
              
              43,127
              
              
              86,478
              
              
              33,479Depreciation
                  and amortization
              
              
              20,738
              
              
              18,255
              
              
              11,297
              
              
              9,128Stock
                  based charges
              
              
              1,014,111
              
              
              -
              
              
              106,826
              
              
              -General
                  and administrative
              
              
              172,602
              
              
              108,937
              
              
              70,938
              
              
              51,375Total
                  operating expenses
              
              
              2,161,223
              
              
              515,980
              
              
              600,579
              
              
              307,410Loss
                  from operations
              
              
              (2,042,263
              )
              
              (388,543
              )
              
              (550,433
              )
              
              (205,243
              )Other
                  expense:Interest
                  expense
              
              
              (135,345
              )
              
              (166,274
              )
              
              (33,559
              )
              
              (84,058
              )Other
                  expense
              
              
              (77
              )
              
              -
              
              
              (77
              )
              
              -Total
                  other expense
              
              
              (135,422
              )
              
              (166,274
              )
              
              (33,636
              )
              
              (84,058
              )Loss
                  before extraordinary item
              
              
              (2,177,685
              )
              
              (554,817
              )
              
              (584,069
              )
              
              (289,301
              )Gain
                  on restructuring of debt
              
              
              365,834
              
              
              -
              
              
              -
              
              
              -Net
                  loss before income taxes
              
              
              (1,811,851
              )
              
              (554,817
              )
              
              (584,069
              )
              
              (289,301
              )State
                  income taxes
              
              
              800
              
              
              -
              
              
              800
              
              
              -Net
                  loss after taxes
              
              $
              (1,812,651
              )
              $
              (554,817
              )
              $
              (584,869
              )
              $
              (289,301
              )**Loss
                  per share - basic and diluted**Loss
                  per share, before extraordinary item
              
              $
              (0.08
              )
              $
              (0.04
              )
              $
              (0.02
              )
              $
              (0.02
              )Net
                  loss per share
              
              $
              (0.07
              )
              $
              (0.04
              )
              $
              (0.02
              )
              $
              (0.02
              )Weighted
                  average shares outstanding
              
              
              25,814,732
              
              
              15,000,000
              
              
              28,058,035
              
              
              15,000,000
  The
        accompanying notes are an integral part of the combined financial
        statements.
 F-2
  **ForgeHouse,
        Inc.**
  **Combined
        Statements of Cash Flows**
 ***For
        Each of the Three and Six Month Periods Ended June 30, 2008 and 2007***
 
 For the Six Month Period Ended June 30,2008
              
              2007*Cash
                  flows used in operating activities:*Net
                  loss
              
              $
              (1,812,651
              )
              $
              (554,817
              )Adjustments
                  to reconcile net loss to net cash (used in) operating
                  activities:Depreciation
              
              
              3,405
              
              
              921Amortization
                  of software development costs
              
              
              17,333
              
              
              17,333Gain
                  on restructure of debt
              
              
              (365,834
              )
              
              -Amortization
                  of stock based charges
              
              
              1,014,110
              
              
              -Decrease
                  (increase) in assets:Escrowed
                  funds
              
              
              (49,148
              )
              
              -Accounts
                  receivable - trade
              
              
              (741
              )
              
              14,471Prepaid
                  expenses and other current assets
              
              
              (3,379
              )
              
              790Inventory
              
              
              (12,105
              )
              
              (8,395
              )Deposit
              
              
              (3,623
              )
              
              -Increase
                  (decrease) in liabilities:Accounts
                  payable - trade
              
              
              161,684
              
              
              -Accrued
                  interest on debt
              
              
              (259,575
              )
              
              164,550Accrued
                  expenses
              
              
              (170,190
              )
              
              (6,644
              )Accrued
                  payroll
              
              
              82,831
              
              
              -Deferred
                  revenue
              
              
              5,340
              
              
              -Related
                  party payable
              
              
              (91,792
              )
              
              191,765**Cash
                  used in operating activities**
              
              
              **(1,484,335**
              **)**
              
              **(180,026**
              **)***Cash
                  flows used in investing activities:*30%
                  purchase of ForgeHouse LLC
              
              
              (171,430
              )
              
              -Recapitalization
                  of Milk Bottle Cards Inc. - reverse merger
              
              
              (8,860
              )
              
              -Acquisition
                  of equipment
              
              
              (16,792
              )
              
              (1,060
              )**Cash
                  used in investing activities**
              
              
              **(197,082**
              **)**
              
              **(1,060**
              **)***Cash
                  flows provided by financing activities:*Payments
                  of related party debt
              
              
              (300,000
              )
              
              -Payments
                  on debt
              
              
              (206,591
              )
              
              -Proceeds
                  from the sale of preferred A stock
              
              
              2,100,000
              
              
              -Issuance
                  of common shares for cash
              
              
              290,388
              
              
              -Proceeds
                  from owners
              
              
              -
              
              
              203,911Purchase
                  and retirement of stock
              
              
              (50,000
              )
              
              -Payment
                  on capital lease
              
              
              (2,065
              )
              
              -Dissolution
                  of variable interest entity
              
              
              (3,944
              )
              
              -Net
                  increase (decrease) in bank overdrafts
              
              
              (9,712
              )
              
              (22,825
              )**Cash
                  provided by financing activities**
              
              
              **1,818,076**
              
              
              **181,086****Net
                  increase (decrease) in cash**
              
              
              **136,657**
              
              
              **0****Cash
                  at beginning of period**
              
              
              **-**
              
              
              **-****Cash
                  at end of period**
              
              **$**
              **136,657**
              
              **$**
              **0**
  The
        accompanying notes are an integral part of the combined financial
        statements.
  F-3
  **ForgeHouse,
        Inc.**
  **Combined
        Statements of Cash Flows**
 ***For
        Each of the Three and Six Month Periods Ended June 30, 2008 and
        2007***
 
 *Supplemental
        Disclosure of Cash Flow Information*
 
 For the Six Month Period Ended June 30,2008
              
              2007Cash
                  paid during the fiscal years for:Interest
              
              $
              383,462
              
              $
              8,415Income
                  taxes
              
              $
              800
              
              
              -
  *Non-Cash
        Transactions*
 
 Issuance
                  of shares in satisfaction of accounts payable:Accounts
                  payable
              
              $
              45,800
              
              
              -Common
                  stock
              
              $
              (46
              )
              
              -Additional
                  paid in capital
              
              $
              (45,754
              )
              
              -
  The
        accompanying notes are an integral part of the combined financial
        statements.
  F-4
  **ForgeHouse,
        Inc.**
  **Notes
        to the Combined Financial Statements**
 ***As
        of June 30, 2008 and***
 ***For
        Each of the Three and Six Month Periods Ended June 30, 2008 and
        2007***
 
  **1.**
              **Description
                  of the Company's
                  Business**
  *Nature
        of Operations*
  ForgeHouse,
        Inc. (the Company) (formerly Milk Bottle Cards, Inc) is currently engaged
        in
        sales and the development of ongoing enhancement to OneVision®, its proprietary
        software system. The Company’s OneVision® system is a web based application that
        offers a virtual command and control system for certain compliance, physical
        security and maintenance applications.
  *Basis
        of Presentation*
  The
        Company was incorporated under the laws of the state of Nevada in November
        2004
        for the purpose of producing, distributing and marketing a collection of
        greeting cards. ForgeHouse, LLC (ForgeHouse) (a Georgia LLC) was formed in
        the
        state of Georgia in June 2002 for the purpose of developing and selling physical
        security industry applications software. ForgeHouse operated through April
        2007
        as a company in the development stage. The Company is currently engaged in
        the
        development and sale of OneVision®, its proprietary software product.
  On
        July
        31, 2007, the Company entered into a Nonbinding Letter of Intent with Milk
        Bottle Cards, Inc. (Milk Bottle) (Merger Agreement). The Merger Agreement,
        as
        amended, was approved by the ForgeHouse, LLC members and the Board of Directors
        of Milk Bottle and closed on January 31, 2008. For accounting purposes, the
        transaction is considered a “reverse merger” under which ForgeHouse is
        considered the acquirer of Milk Bottle. Accordingly, the purchase price was
        allocated among the fair values of the assets and liabilities of Milk Bottle
        while the historical results are those of ForgeHouse, but they were
        retroactively restated (a recapitalization) for the equivalent number of
        shares
        received by the Company in the exchange transaction. Earnings per share for
        the
        periods prior to the merger transaction have been restated to reflect the
        number
        of equivalent shares received by the ForgeHouse members. The ForgeHouse members
        as a result of the merger transaction own approximately 35% of the
        Company.
  *Principles
        of Combination*
  The
        combined financial statements include the accounts of ForgeHouse, Inc. and
        its
        wholly owned subsidiary. All significant transactions among the combined
        entities have been eliminated upon combination.
  F-5
  **ForgeHouse,
        Inc.**
  **Notes
        to the Combined Financial Statements**
 ***As
        of June 30, 2008 and***
 ***For
        Each of the Three and Six Month Periods Ended June 30, 2008 and
        2007***
 
  **1.**
              **Description
                  of the Company's Business,
                  Continued**
  *Interim
        financial Statements*
  The
        accompanying unaudited combined financial statements have been prepared in
        accordance with accounting principles generally accepted in the United States
        of
        America for interim financial information and in accordance with the
        instructions to Form 10-Q and Article 8 of Rule S-X. Accordingly, they do
        not
        include all of the information and footnotes required by accounting principles
        generally accepted in the United States of America for complete financial
        statements. In the opinion of management, all material adjustments (consisting
        of normal recurring accruals) necessary for a fair presentation have been
        included. Operating results for the three and six months ended June 30, 2008
        are
        not necessarily indicative of the results that may be expected for the year
        ending December 31, 2008.
  For
        further information, refer to the audited financial statements and footnotes
        thereto of ForgeHouse, LLC as of December 31, 2007 and the results of operations
        for the two years then ended which are included as attachments to the Form
        8-K/A
        filed on April 24, 2008.
  **2.**
              **Summary
                  of Significant Accounting
                  Policies**
  *Transition
        from Development Stage Operations and the Start of Ongoing
        Operations*
  In
        April
        2007, ForgeHouse entered into a licensing agreement with a national physical
        security industry provider (the "Licensee"). In this licensing agreement
        the
        Company granted an exclusive license to the Licensee for the use, marketing
        and
        distribution rights to the Company's OneVision® software for use by the Licensee
        in its own physical security service operations and the right to sub-lease
        OneVision® to all non-governmental physical security service entities in the
        United States. The execution of this agreement marked ForgeHouse’s transition
        from the development stage to ongoing operations. Accordingly, the Company’s
        operations in 2007 do not reflect inception-to-date information nor was it
        treated as an entity in the development stage.
  *Revenue
        Recognition*
  The
        Company recognizes revenue only when all of the following criteria have been
        met:
  ·
              Persuasive
                  evidence of an arrangement exists;
 ·
              Delivery
                  has occurred or services have been
                  rendered;
 ·
              The
                  fee for the arrangement is fixed or determinable;
                  and
 ·
              Collectability
                  is reasonably assured.
 
 F-6
  **ForgeHouse,
        Inc.**
  **Notes
        to the Combined Financial Statements**
 ***As
        of June 30, 2008 and***
 ***For
        Each of the Three and Six Month Periods Ended June 30, 2008 and
        2007***
 
 **2.**
              **Summary
                  of Significant Accounting Policies,
                  Continued**
  The
        Company recognizes revenue from monthly access fees charged to customers
        for
        access to the Company's OneVision® software as well as certain related licensee
        hardware sales, technical support fees, applications programming and training
        services.
  *Service
        Contract Revenue*
  The
        Company recognizes revenue on service contracts ratably over applicable contract
        periods or as services are performed. Amounts billed and collected before
        the
        services are performed are included in deferred revenues.
  The
        agreement with the Licensee provides for payments to the Company at a base
        service fee of $10,000 per month along with an annual per user service fee
        payable at the beginning of each service year that Licensee utilizes the
        OneVision® service. The annual user service fees are a minimum of $1,140 per
        year, with additional optional services and hardware available. The Company's
        per user service fee rates are subject to an upward rate adjustment if the
        Licensee does not meet certain agreed upon user participation levels. Further,
        in order for the Licensee to maintain the exclusivity rights in the United
        States, the Licensee must meet minimum user participation levels and have
        paid
        all fees due under the agreement.
  *Product
        Revenue*
  Sales
        are
        recorded when products are shipped to customers. Provisions for discounts
        and
        rebates to customers, estimated returns and allowances, and other adjustments
        are provided for in the same period the related sales are recorded. In instances
        where products are configured to customer requirements, revenue is recorded
        upon
        the successful completion of the Company’s final test procedures and the
        customer’s acceptance.
  *Escrowed
        Funds*
  At
        June
        30, 2008, the Company had funds that were available and restricted to certain
        Board approved Company operating expenses. The unexpended portion of these
        funds
        at June 30, 2008, which amounted to $56,262, has been classified as “Escrowed
        funds” - a current asset in the accompanying Balance Sheet.
  *Use
        of Estimates*
  The
        preparation of financial statements in conformity with accounting principles
        generally accepted in the United States requires us to make estimates and
        assumptions that affect the reported amounts of assets, liabilities, revenues
        and expenses and disclosure of contingent obligations in the financial
        statements and accompanying notes. Our most significant assumptions relate
        to
        recording net revenue, collectability of accounts receivable, useful lives
        and
        impairment of tangible and intangible assets, accruals, income taxes,
        stock-based compensation expense and other factors. The estimation process
        requires assumptions to be made about future events and conditions, and as
        such,
        is inherently subjective and uncertain. Actual results could differ materially
        from our estimates.
  F-7
  **ForgeHouse,
        Inc.**
  **Notes
        to the Combined Financial Statements**
 ***As
        of June 30, 2008 and***
 ***For
        Each of the Three and Six Month Periods Ended June 30, 2008 and
        2007***
 
  **2.**
              **Summary
                  of Significant Accounting Policies,
                  Continued**
  *Concentration
        of Credit Risk*
  At
        June
        30, 2008, the Company had $87,851 on deposit that exceeded United States
        (FDIC)
        federally insurance limit of $100,000 per bank. The Company believes this
        credit
        risk is mitigated due to the financial strength of the financial
        institution.
  *Software
        Development Costs*
  The
        Company accounts for development costs related to software products to be
        sold,
        leased, or otherwise marketed in accordance with FASB SFAS No. 86, *Accounting
        for the Costs of Computer Software to Be Sold, Leased, or Otherwise
        Marketed* .
        Software development costs are expensed as incurred until technological
        feasibility has been established, at which time such costs are capitalized
        until
        the product is available for general release to customers. The Company's
        software was available July 1, 2003, for general release approximately seven
        months after the establishment of technological feasibility and, accordingly,
        the Company capitalized certain software development costs incurred during
        that
        period. SFAS No. 2, *Accounting
        for Research and Development Costs* ,
        establishes accounting and reporting standards for research and development.
        During the three and six month periods ended June 30, 2008 and 2007, the
        Company
        did not capitalize any software development costs. The Company capitalized
        $173,333 in software development costs as of June 30, 2008. The Company expensed
        $45,607, $92,464, $125,226 and $190,698 as research and development expense
        during the three and six month periods ended June 30, 2008 and 2007,
        respectively.
  In
        accordance with SFAS No. 2, the costs the Company incurs to enhance its existing
        products are expensed in the period they are incurred and included in software
        development costs in the statements of operations.
  Amortization
        of capitalized software development costs begins when the product is available
        for general release. Amortization is provided on a product-by-product basis
        on
        the straight-line method over the software product's economic useful life.
        Unamortized capitalized software development costs determined to be in excess
        of
        net realizable values of the product are expensed immediately. During the
        three
        and six month periods ended June 30, 2008 and 2007, amortization of software
        development costs totaled $8,666, $17,333, $8,666 and $17,333,
        respectively.
  F-8
  **ForgeHouse,
        Inc.**
  **Notes
        to the Combined Financial Statements**
 ***As
        of June 30, 2008 and***
 ***For
        Each of the Three and Six Month Periods Ended June 30, 2008 and
        2007***
 
  **2.**
              **Summary
                  of Significant Accounting Policies,
                  Continued**
  Management
        has concluded that the software development costs have no residual value
        and a
        5-year period of amortization, with the amortization period starting with
        the
        first general sale of the product after the beta site. This occurred in April
        2005.
  The
        Company includes in software development expense those costs related to the
        following software development activities:
  ·
              Conceptual
                  formulation and design of possible product or process
                  alternatives;
 ·
              Testing
                  in search for, or evaluation of, product or process
                  alternatives;
 ·
              Modification
                  of the formulation or design of a product or process;
                  and
 ·
              Engineering
                  activity required to advance the design of a product to the point
                  that it
                  meets specific functional and economic requirements and is ready
                  for
                  production.
  Future
        amortization of the software development costs is as follows for the years
        ended
        June 30:
  2008
              
              $
              34,6672009
              
              
              26,000
  *Fair
        Value of Financial Instruments*
  As
        of
        January 1, 2008, the Company adopted Statement of Financial Accounting Standards
        No. 157, “Fair Value Measurements,” (FAS 157). In February 2008, the Financial
        Accounting Standards Board, or FASB, issued FASB Staff Position No. FAS 157-2, *Effective
        Date of FASB Statement No.157* ,
        which
        provides a one year deferral of the effective date of FAS 157 for non-financial
        assets and non-financial liabilities, except those that are recognized or
        disclosed in the financial statements at fair value at least annually.
        Therefore, we adopted the provisions of FAS 157 with respect to our financial
        assets and liabilities only. FAS 157 defines fair value, establishes a framework
        for measuring fair value under GAAP and enhances disclosures about fair value
        measurements. Fair value is defined under FAS 157 as the exchange price that
        would be received for an asset or paid to transfer a liability (an exit price)
        in the principal or most advantageous market for the asset or liability in
        an
        orderly transaction between market participants on the measurement date.
        Valuation techniques used to measure fair value under FAS 157 must maximize
        the
        use of observable inputs and minimize the use of unobservable inputs.
  F-9
  **ForgeHouse,
        Inc.**
  **Notes
        to the Combined Financial Statements**
 ***As
        of June 30, 2008 and***
 ***For
        Each of the Three and Six Month Periods Ended June 30, 2008 and
        2007***
 
  **2.**
              **Summary
                  of Significant Accounting Policies,
                  Continued**
  We
        utilize the market approach to measure fair value for our financial assets
        and
        liabilities. The market approach uses prices and other relevant information
        generated by market transactions involving identical or comparable assets
        or
        liabilities. The standard describes a fair value hierarchy based on three
        levels
        of inputs, of which the first two are considered observable and the last
        unobservable, that may be used to measure fair value which are the following:
  Level
        1:
        Quoted prices (unadjusted) in active markets that are accessible at the
        measurement date for assets or liabilities. The fair value hierarchy gives
        the
        highest priority to Level 1 inputs.
  Level
        2:
        Observable prices that are based on inputs not quoted on active markets,
        but
        corroborated by market data.
  Level
        3:
        Unobservable inputs are used when little or no market data is available.
        The
        fair value hierarchy gives the lowest priority to Level 3 inputs.
  In
        determining fair value, we utilize valuation techniques that maximize the
        use of
        observable inputs and minimize the use of unobservable inputs to the extent
        possible as well as the consideration of counterparty credit risk in its
        assessment of fair value.
  The
        adoption of this statement did not have a material impact on our combined
        results of operations and financial condition. The carrying values of our
        cash,
        cash equivalents and marketable securities, carried at fair value as of June
        30,
        2008, are classified in the table below in one of the three categories described
        above:
  *Fair
        Value Measurements at June 30, 2008*
  Level
                  1
              
              Level
                  2
              
              Level
                  3
              
              TotalCash
                  & Equivalents
              
              $
              136,657
              
              
              -
              
              
              -
              
              $
              136,657Escrowed
                  Funds
              
              
              56,262
              
              
              -
              
              
              -
              
              
              56,262Cash,
                  Cash Equivalents and Escrowed Funds
              
              $
              192,919
              
              
              -
              
              
              -
              
              $
              192,919
  *Basic
        and Diluted Loss Per Share*
  In
        accordance with FASB Statement No. 128, *Earnings
        per Share* ,
        the
        Company calculates basic and diluted net loss per share using the weighted
        average number of common shares outstanding during the periods presented,
        and
        adjusts the amount of net loss used in this calculation for preferred stock
        dividends declared during the period, if any.
  F-10
  **ForgeHouse,
        Inc.**
  **Notes
        to the Combined Financial Statements**
 ***As
        of June 30, 2008 and***
 ***For
        Each of the Three and Six Month Periods Ended June 30, 2008 and
        2007***
 
  **2.**
              **Summary
                  of Significant Accounting Policies,
                  Continued**
  We
        incurred a net loss in each period presented, and as such, did not include
        the
        effect of potentially dilutive common stock equivalents in the diluted net
        loss
        per share calculation, as their effect would be anti-dilutive for all periods.
        Dilutive common stock equivalents would include the common stock issuable
        upon
        the conversion of preferred stock and the exercise of warrants and stock
        options
        that have conversion or exercise prices below the market value of our common
        stock at the measurement date.
  The
        following data shows the amounts used in computing basic loss per share for
        the
        three and six month periods ended June 30, 2008 and 2007.
  As
        of
        June 30, 2008, the Company had issued and outstanding common stock equivalents
        comprised of common stock options and warrants that can be converted into
        3,877,000 shares of common stock. As of June 30, 2007, there were no common
        stock equivalents issued and outstanding.
  *Cash
        and Cash Equivalents*
  The
        Company considers deposits that can be redeemed on demand and investments
        that
        have original maturities of less than three months, when purchased, to be
        cash
        equivalents. As of June 30, 2008, the Company’s cash was deposited in one
        financial institution and there were no cash equivalents present.
  *Accounts
        Receivable - Trade and Allowance for Doubtful Accounts*
  Trade
        accounts receivable are stated at the amount the Company expects to collect.
        The
        Company provides an allowance for doubtful accounts equal to the estimated
        uncollectible amounts. The Company’s estimate is based on its historical
        collection experience and a review of the current status of trade accounts
        receivable. It is reasonably possible that the Company’s estimate of the
        allowance for doubtful accounts will change. Based on the Company's status
        as a
        development stage company until 2007 and past level of sales, the Company
        has
        not experienced any accounts receivable that could not be collected, and
        as
        such, the allowance for doubtful accounts is zero at June 30, 2008. As the
        Company expands, it fully expects the allowance for doubtful accounts to
        increase from zero.
  *Inventory*
  Inventories
        are stated at the lower of cost or market. Cost is determined on a standard
        cost
        basis that approximates the first-in, first-out (FIFO) method. Market is
        determined based on net realizable value. Appropriate consideration is given
        to
        obsolescence, excessive levels, deterioration, and other factors in evaluating
        net realizable value. The Company buys and resells hardware as necessary,
        but
        does not carry inventory on-hand for extended periods of time, and had only
        five
        PDA's for resale on-hand at June 30, 2008. Inventory was $12,105 at June
        30,
        2008.
  F-11
  **ForgeHouse,
        Inc.**
  **Notes
        to the Combined Financial Statements**
 ***As
        of June 30, 2008 and***
 ***For
        Each of the Three and Six Month Periods Ended June 30, 2008 and
        2007***
 
  **2.**
              **Summary
                  of Significant Accounting Policies,
                  Continued**
  *Prepaid
        Expenses*
  The
        Company's prepaid expenses consist mainly of amounts paid for annual insurance
        contracts. The amounts are expensed ratably over the term of the
        contract.
  *Equipment*
  Equipment
        is recorded at cost. Depreciation is provided over the estimated useful lives
        of
        the related assets using the straight-line method for financial statement
        purposes. The Company uses other depreciation methods (generally, accelerated
        depreciation methods) for tax purposes where appropriate. Repairs and
        maintenance are expensed as incurred. When equipment is retired, sold, or
        otherwise disposed of, the asset’s carrying amount and related accumulated
        depreciation are removed from the accounts and any gain or loss is included
        in
        operations. During the three and six month periods ended June 30, 2008 and
        2007,
        the Company did not dispose of any equipment. The estimated useful lives
        of
        computer and office equipment are as follows:
  EstimatedUsefulLivesComputer
                  equipment
              
              
              3
                  yearsOffice
                  equipment
              
              
              5
                  yearsOffice
                  furniture
              
              
              7
                  years
  *Leases*
  The
        Company reviews all leases for capital or operating classification at their
        inception under the guidance of the Financial Accounting Standards Board's
        (FASB) Statement of Financial Accounting Standards (SFAS) No. 13, *Accounting
        for Leases* ,
        as
        amended. The Company uses its incremental borrowing rate in the assessment
        of
        lease classification and defines the initial lease term to exclude lease
        extension periods.
  The
        Company has entered into an operating lease agreements for its corporate
        office
        which contains provisions for future rent increases or periods in which rent
        payments are reduced (abated). In accordance with generally accepted accounting
        principles, the Company records monthly rent expense equal to the total of
        the
        payments due over the lease term, divided by the number of months of the
        lease
        term. The difference between rent expense recorded and the amount paid is
        credited or charged to “Deferred rent.” Deferred rent was not material at June
        30, 2008.
  F-12
  
 **ForgeHouse,
        Inc.**
  **Notes
        to the Combined Financial Statements**
 ***As
        of June 30, 2008 and***
 ***For
        Each of the Three and Six Month Periods Ended June 30, 2008 and
        2007***
 
  **2.**
              **Summary
                  of Significant Accounting Policies,
                  Continued**
  *Impairment
        of Long-Lived Assets*
  In
        accordance with SFAS No. 144, *Accounting
        for the Impairment or Disposal of Long-Lived Assets* ,
        long-lived assets, such as property and equipment, and intangible assets
        subject
        to amortization are reviewed for impairment whenever events or changes in
        circumstances indicate that the carrying amount of an asset may not be
        recoverable. Recoverability of assets to be held and used is measured by
        a
        comparison of the carrying amount of an asset to estimated undiscounted future
        cash flows expected to be generated by the asset. If the carrying amount
        of an
        asset exceeds its estimated undiscounted future cash flows, an impairment
        charge
        is recognized for the amount by which the carrying amount of the asset exceeds
        the fair value of the asset. Fair value is determined based on the estimated
        discounted future cash flows expected to be generated by the asset. The factors
        considered by management in performing this assessment include current operating
        results and trends and prospects, as well as the effects of obsolescence
        and
        economic factors.
  *Deferred
        Revenue - Amounts Billed in Advance*
  The
        Company recognizes revenue as earned. Amounts billed in advance of the period
        in
        which service is rendered will be recorded as a liability under “Deferred
        revenue.” The Company had $5,340 of deferred revenue at June 30,
        2008.
  *General
        and Administrative Expense*
  General
        and administrative expense includes the cost of maintaining the infrastructure
        of the Company that is not directly related to delivery services. Also included
        in this category would be the provision for doubtful accounts
        receivable.
  *Income
        Taxes*
  Deferred
        tax assets and liabilities are recognized for the future tax consequences
        attributable to differences between the financial statement carrying amounts
        of
        existing assets and liabilities and their respective tax bases. Deferred
        tax
        assets, including tax loss and credit carryforwards, and liabilities are
        measured using enacted tax rates expected to apply to taxable income in the
        years in which those temporary differences are expected to be recovered or
        settled. The effect on deferred tax assets and liabilities of a change in
        tax
        rates is recognized in income in the period that includes the enactment date.
        Deferred income tax expense represents the change during the period in the
        deferred tax assets and deferred tax liabilities. The components of the deferred
        tax assets and liabilities are individually classified as current and
        non-current based on their characteristics. 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.
 
 F-13
 
 **ForgeHouse,
        Inc.**
  **Notes
        to the Combined Financial Statements**
 ***As
        of June 30, 2008 and***
 ***For
        Each of the Three and Six Month Periods Ended June 30, 2008 and
        2007***
 
 
 **2.**
              **Summary
                  of Significant Accounting Policies,
                  Continued**
  *Reclassification
        of Accounts*
  Certain
        reclassifications have been made to prior-year comparative financial statements
        to conform to the current year presentation. These reclassifications had
        no
        effect on previously reported results of operations or financial position.
  *Recent
        Accounting Pronouncements*
  In
        June
        2006, FASB issued Interpretation No. 48, *Accounting
        for Uncertainty in Income Taxes - an Interpretation of FASB Statement No.
        109* (FIN
        48), which clarifies the accounting for uncertainty in income taxes recognized
        in an enterprise's financial statements in accordance with
        SFAS
        No. 109, *Accounting
        for Income Taxes* .
        The
        interpretation prescribes a recognition threshold and measurement attribute
        for
        the financial statement recognition and measurement of a tax position taken
        or
        expected to be taken in a tax return. FIN 48 requires recognition of tax
        benefits that satisfy a greater than 50% probability threshold. FIN 48 also
        provides guidance on de-recognition, classification, interest and penalties,
        accounting in interim periods, disclosure, and transition. FIN 48 is effective
        for the Company beginning January 1, 2008. The Company believes that adoption
        of
        FIN 48 will not have a material effect on its financial position, results
        of
        operations, or cash flows.
  In
        December 2007, the FASB issued Statement of Financial Accounting Standards
        No.
        141 (revised 2007), *Business
        Combinations* ,
        (FAS
        141(R)) and No. 160, *Noncontrolling
        Interests in Consolidated Financial Statements, an amendment of ARB No.
        51* (FAS
        160). FAS 141(R) will change how business acquisitions are accounted for
        and FAS
        160 will change the accounting and reporting for minority interests, which
        will
        be recharacterized as noncontrolling interests and classified as a component
        of
        equity. The Company will adopt both FAS 141(R) and FAS 160 as of January
        1, 2009
        and neither pronouncement is expected to have a material impact on the Company’s
        financial statements.
 **3.**
                **Variable
                    Interest Entity**
  ForgeHouse
          determined its debt servicing of the GS Security's SBA loan required GS
          Security
          to be recognized as a variable interest entity as defined in FIN 46R. ForgeHouse
          concluded that it was the primary beneficiary and, as a result, combined
          its
          financial operating results with those of GS Security from January 1, 2005
          through January 31, 2008. The combination of GS Security with ForgeHouse
          did not
          materially affect its operating results or its financial condition. As
          of June
          30, 2008, GS Security is no longer combined with ForgeHouse Inc. as a result
          of
          the satisfaction of the SBA Loan in February 2008 (Note 7 - Debt). For
          consistency, the balance sheet of ForgeHouse as of December 31, 2007 and
          the
          statement of operations for the three and six month periods ended June
          30, 2008
          and 2007 does not include the operations of the VIE.
 F-14
 
 **ForgeHouse,
        Inc.**
  **Notes
        to the Combined Financial Statements**
 ***As
        of June 30, 2008 and***
 ***For
        Each of the Three and Six Month Periods Ended June 30, 2008 and
        2007***
 
 **3.**
                **Variable
                    Interest Entity,
                    Continued**
  *Reconciliation
          of Balance Sheet Presented to Consolidated Balance Sheet as
          Filed*
  A
          reconciliation of the balance sheet shown above to the consolidated balance
          sheet which was filed in an 8-K/A on April 22, 2008 is as follows:
 *ASSETS*Per
                      Balance
                  
                  Per
                      Balance
                  
                  ConsolidatedSheet
                      Shown
                  
                  Sheet
                      of VIE
                  
                  Balance
                      SheetAbove
                      as of
                  
                  As
                      of
                  
                  As
                      ofDecember
                      31,
                  
                  December
                      31,
                  
                  December
                      31,Current
                      assets:
                  
                  2007
                  
                  2007
                  
                  2007Accounts
                      receivable - trade
                  
                  $
                  42,323
                  
                  
                  -
                  
                  $
                  42,323Prepaid
                      insurance
                  
                  
                  7,052
                  
                  
                  -
                  
                  
                  7,052Escrowed
                      funds
                  
                  
                  7,114
                  
                  
                  -
                  
                  
                  7,114Total
                      current assets
                  
                  
                  56,489
                  
                  
                  -
                  
                  
                  56,489Equipment,
                      net of accumulated depreciation of $28,142
                  
                  
                  14,123
                  
                  
                  -
                  
                  
                  14,123Software
                      development costs, net of accumulated amortization $95,333
                  
                  
                  78,000
                  
                  
                  -
                  
                  
                  78,000**Total
                      assets**
                  
                  **$**
                  **148,612**
                  
                  
                  **-**
                  
                  **$**
                  **148,612***LIABILITIES
                      AND STOCKHOLDERS' DEFICIT*Current
                      liabilities:Cash
                      overdraft
                  
                  $
                  9,712
                  
                  
                  -
                  
                  $
                  9,712Accounts
                      payable - trade
                  
                  
                  655,662
                  
                  
                  -
                  
                  
                  655,662Related
                      party payable
                  
                  
                  120,559
                  
                  
                  -
                  
                  
                  120,559Accrued
                      payroll and related expenses
                  
                  
                  27,198
                  
                  
                  -
                  
                  
                  27,198Accrued
                      expenses
                  
                  
                  184,805
                  
                  
                  -
                  
                  
                  184,805Accrued
                      interest on notes payable
                  
                  
                  648,029
                  
                  $
                  12,424
                  
                  
                  660,453Current
                      portion of obligations under capital leases
                  
                  
                  4,262
                  
                  
                  -
                  
                  
                  4,262Related
                      party notes payable - current
                  
                  
                  580,000
                  
                  
                  -
                  
                  
                  580,000Notes
                      payable - current
                  
                  
                  149,657
                  
                  
                  56,934
                  
                  
                  206,591Total
                      current liabilities
                  
                  
                  2,379,884
                  
                  
                  69,358
                  
                  
                  2,449,242Obligations
                      under capital leases
                  
                  
                  4,398
                  
                  
                  -
                  
                  
                  4,398Related
                      party notes payable, less current portion
                  
                  
                  1,120,000
                  
                  
                  -
                  
                  
                  1,120,000**Total
                      liabilities**
                  
                  **$**
                  **3,504,282**
                  
                  **$**
                  **69,358**
                  
                  **$**
                  **3,573,640**Commitments
                      and contingenciesStockholders'
                      deficit:Additional
                      paid in capital
                  
                  $
                  1,263,978
                  
                  
                  -
                  
                  
                  1,263,978Accumulated
                      deficit
                  
                  
                  (4,619,648
                  )
                  $
                  (69,358
                  )
                  
                  (4,689,006
                  )Total
                      stockholders' deficit
                  
                  $
                  (3,355,670
                  )
                  $
                  (69,358
                  )
                  $
                  (3,425,028
                  )**Total
                      liabilities and stockholders' deficit**
                  
                  **$**
                  **148,612**
                  
                  
                  **-**
                  
                  **$**
                  **148,612**
 **4.**
              **Accounts
                  Receivable - Trade**
  Accounts
        receivable - trade is comprised of the following at June 30, 2008:
 
 Accounts
                  receivable - trade
              
              $
              33,064Allowance
                  for doubtful accounts receivable
              
              
              -**Accounts
                  receivable - trade, net**
              
              **$**
              **33,064**
  The
        Company did not provide for an allowance for doubtful accounts as of June
        30,
        2008 as all open account balances were determined to be collectible. The
        accounts receivable - trade account as of June 30, 2008 (and also those that
        arise from future operations) are pledged as security as part of the Company's
        loans with the private and commercial lenders (Note 7 - Debt).
  **5.**
              **Equipment**
  Equipment,
        net is comprised of the following at June 30, 2008:
  Computer
                  equipment
              
              $
              42,302Office
                  furniture
              
              
              2,397Office
                  equipment
              
              
              5,273Equipment
                  under capital lease
              
              
              9,085Total
                  equipment
              
              
              59,057Less:
                  accumulated depreciation
              
              
              (31,546
              )**Equipment,
                  net**
              
              **$**
              **27,511**
  Depreciation
        expense amounted to $2,631, $3,405, $460 and $921 for the three and six month
        periods ended June 30, 2008 and 2007, respectively. All of the equipment
        with a
        net book value of $27,511 was pledged as security for the Company's loans
        two
        loans with the private lender (Note 7 - Debt).
  **6.**
              **Obligations
                  under Capital Lease**
  The
        Company leases certain equipment under a capital lease. The equipment under
        such
        capital lease is recorded at the lower of the present value of the minimum
        lease
        payments or the fair value of the equipment. Equipment held under capital
        leases
        is included in the Balance Sheet as equipment, net was $9,085 at June 30,
        2008.
        Accumulated depreciation of the leased equipment at June 30, 2008 was $1,697.
        Depreciation of assets under such capital lease is included in depreciation
        expense.
 
 F-15
 
 **ForgeHouse,
        Inc.**
  **Notes
        to the Combined Financial Statements**
 ***As
        of June 30, 2008 and***
 ***For
        Each of the Three and Six Month Periods Ended June 30, 2008 and
        2007***
 
 **6.**
              **Obligations
                  Under Capital Lease,
                  Continued**
  The
        future minimum lease payments required under the capital leases and the present
        value of the net minimum lease payments as of June 30, 2008, are as
        follows:
  Twelve
                  MonthsEndingJune
                  30
              
              Amount2009
              
              $
              5,1012010
              
              
              2,125Total
                  minimum lease payments
              
              
              7,226Less:
                  amount representing interest
              
              
              (631
              )Present
                  value of net minimum lease payments
              
              
              6,595Less:
                  current maturities of capital lease obligations
              
              
              (4,534
              )Long-term
                  capital lease obligations
              
              $
              2,061
  **7.**
              **Debt**
  Debt
        as
        of June 30, 2008 is comprised of the following:
  *Debt,
        unsecured*
  There
        is
        one unsecured debt that was restructured and re-written as of January 31,
        2008
        with principal amount of $200,000 that accrues interest at a rate of 6% per
        annum until maturity and 8% after maturity, with payments of $40,000 due
        every
        six months beginning December 31, 2008 until and including December 31, 2010.
        This note must be prepaid in whole or in part as part of the closing of any
        equity or debt financing of the Company in the amount equal to 20% of the
        net
        funding received or the remaining loan balance, whichever is less.
 
 Debt,
                  unsecured as of June 30, 2008
              
              $
              200,000Less:
                  current portion of the unsecured debt
              
              
              (40,000
              )Long
                  term portion of the debt, unsecured, as of June 30, 2008
              
              $
              160,000
 
 F-16
 
 **ForgeHouse,
        Inc.**
  **Notes
        to the Combined Financial Statements**
 ***As
        of June 30, 2008 and***
 ***For
        Each of the Three and Six Month Periods Ended June 30, 2008 and
        2007***
 
  **7.**
              **Debt,
                  Continued**
  *Debt,
        Secured*
  There
        is
        one secured debt that was restructured and re-written as of January 31, 2008
        with a principal amount of $1,200,000, that accrues interest at a rate of
        6% per
        annum and is secured by substantially all of the assets of the Company. The
        promissory note calls for principal payments of $240,000 commencing on December
        31, 2008 and continuing every six months until and including December 31,
        2010.
        This note must be prepaid in whole or in part of the closing of any equity
        or
        debt financing of the Company in the amount equal to 20% of the net funding
        received or the remaining loan balance, whichever is less.
 
 Debt,
                  secured as of June 30, 2008
              
              $
              1,200,000Less:
                  current portion
              
              
              (240,000
              )Long
                  term portion of the debt, secured, as of June 30, 2008
              
              $
              960,000Total
                  long term debt, unsecured and secured at June 30, 2008
              
              $
              1,120,000
  *Short
        Term Notes Payable - Secured*
  North
        Atlanta National Bank - Small Business Administration Guaranteed
        Loan
  On
        August
        19, 2002, the ForgeHouse VIE entered into a loan agreement with North Atlanta
        National Bank (the "Lender") which was guaranteed by the Small Business
        Administration (the "SBA Loan"). The SBA Loan had a face value of $456,000
        with
        a variable interest rate based on the Wall Street Journal prime rate plus
        2.75%
        per annum. The SBA Loan required monthly payments of $6,331 and originated
        in
        August 2002 with all unpaid principal and interest due at maturity in August
        2010. The amount of the monthly SBA Loan payment was subject to annual payment
        adjustment each August to provide for the ratable amortization over the
        remaining term of the loan. The interest rate at June 30, 2007 was 11.0%
        and at
        February 5, 2008 (the date the note was satisfied - see Note 1.) was 10.0%.
        The
        weighted average interest rate for the six month period ended June 30, 2007
        and
        period from January 1, 2008 to February 5, 2008 was 11.0% and 10.0%,
        respectively. The SBA Loan was secured by substantially all of the assets
        (both
        tangible and intangible) of ForgeHouse and GS Security (Note 3 - Variable
        Interest Entity). The loan was fully satisfied in February 2008.
 
 F-17
 
 **ForgeHouse,
        Inc.**
  **Notes
        to the Combined Financial Statements**
 ***As
        of June 30, 2008 and***
 ***For
        Each of the Three and Six Month Periods Ended June 30, 2008 and
        2007***
 
 **7.**
              **Debt,
                  Continued**
  Short
        Term Bridge Financing
  In
        the
        fourth quarter of 2007, the Company completed a short term bridge financing
        (the
        bridge loan) with an investor group for $300,000, which came in four tranches
        during the quarter ended December 31, 2007. The bridge loan was necessary
        to
        sustain the ongoing operations of the Company until the merger agreement
        and the
        related equity financing was complete (Note 1.- Description of Company's
        Business). The loan was guaranteed personally by the CEO and COO of the Company
        (Note 9 - Related Party Transactions). The loan was satisfied in February
        2008,
        and while outstanding, bore an interest rate of 6% per annum.
  *Long
        Term Debt - Unsecured*
  After
        All Group
  In
        August
        2006, the Company borrowed $200,000 from a group ("After All") that consisted
        of
        some of the same owners (who were Members of the LLC) of Arngrove Group
        Holdings, Ltd. The loan was unsecured and interest accrues at a rate of 20%
        per
        annum, which is calculated monthly and rolled into the principal balance
        of the
        loan. The loan term was six months from the issuance date and has been extended
        on a month-to-month basis at the discretion of After All. This note payable
        was
        restructured on January 31, 2008 and all accrued interest was forgiven, which
        is
        included in the gain on the restructuring of debt in the statement of
        operations. The restructured note is at an interest rate of 6% per annum,
        with
        scheduled principal payments of $40,000 to be made starting December 31,
        2008,
        and every six months thereafter, up to and including December 31, 2010. The
        long
        term and current principal balance and accrued interest balance at June 30,
        2008
        was $160,000, $40,000 and $5,006, respectively. Interest accrues at 8% beyond
        maturity. This note must be prepaid in whole or in part upon the closing
        of any
        equity or debt financing of the Company in the amount of 20% of the net funding
        received.
  *Long
        Term Notes Payable - Secured*
  Arngrove
        Group Holdings Ltd.
  In
        May
        2005, the Company entered into a combination debt, sale of Members' equity
        and
        services agreement transaction (the "Agreement") with Arngrove Group Holdings
        Ltd (a United Kingdom entity) ("Arngrove"). The Agreement provided the Company
        with a line-of-credit facility (the "Loan Agreement") that called for Arngrove
        to advance the Company as requested up to $100,000 per month, with a maximum
        aggregate principal amount not to exceed $1,200,000 over the twelve month
        period
        ending May 2006. The Loan Agreement was evidenced by a note payable with
        a
        not-to-exceed face amount of $1,200,000 with a fixed interest rate of 10.0%
        per
        annum. The Loan Agreement for financial reporting purposes
        was discounted at inception to reflect an effective interest rate yield of
        29.7%
        (as of the date the Loan Agreement promissory note was created); its initial
        discount recognized was $114,622. The discount was being accreted ratably
        over
        the initial life of the Loan Agreement promissory note. The required annual
        interest only payments were to commence as of June 1, 2006, but were not
        made.
        As such, in 2006, the Loan Agreement's restrictive covenants went into default
        and all of the unaccreted discount was expensed.




F-18





**ForgeHouse,
      Inc.**




**Notes
      to the Combined Financial Statements**


***As
      of June 30, 2008 and***


***For
      Each of the Three and Six Month Periods Ended June 30, 2008 and
      2007***





**7.**
            **Debt,
                Continued**




The
      Agreement also included a services contract that provided for Arngrove to
      provide certain consulting services and to receive a fee (the "Fee") of
      approximately $120,000 each year, payable monthly within 7 days of each
      month-end. The Fee was a required portion of the Agreement. It is being treated
      by the Company as additional interest. The Company determined that the nature
      of
      the consultancy services called for in the Agreement were investor's due
      diligence procedures or were not provided to the Company at all. The Company
      did
      not make any Fee payments to Arngrove as provided for in the service contract
      until the agreement was restructured at January 31, 2008, at which time payments
      totaling $368,571 were made to satisfy all accrued interest and management
      fees
      on the Arngrove and After All notes. This resulted in a first quarter gain
      on
      the restructuring of debt of $365,834.




The
      Agreement included the sale of Members equity to four individuals related to
      Arngrove for $300,000 and a 30% interest in the Company (Note 10). This was
      a
      necessary provision to obtain the loan, which was why the Company accepted
      the
      investment at a discounted price. The Company, based on prior equity
      investments, estimated the fair value of the 30% equity interest at $600,000.
      The Company trifurcated the values of the loan, equity interest, and service
      contract based on the net cash received from the agreement, resulting in the
      recording of the equity investment at a value of $414,622 and a discount on
      the
      underlying loan of $114,622, to be amortized over the life of the loan. However,
      as mentioned above, the loan discount was accelerated when the note became
      in
      default in 2006. This 30% interest was purchased by Milk Bottle Cards, Inc
      at
      January 31, 2008 for $171,430.




The
      Company restructured the debt in January 2008 as part of the reverse merger
      transaction (Note 10 - Equity), and, as such, the debt is classified as a long
      term Note Payable on the face of the balance sheet. This note payable was
      restructured on January 31, 2008 at an interest rate of 6% per annum, with
      scheduled principal payments of $240,000 to be made starting December 31, 2008
      and every six months thereafter, up to and including December 31, 2010. Interest
      accrues at 8% beyond maturity. The amount of stated interest related to this
      Loan Agreement was included in accrued interest and was $30,037 at June 30,
      2008. This note must be prepaid in whole or in part upon the closing of any
      equity or debt financing of the Company in the amount of 20% of the net funding
      received.





F-19





**ForgeHouse,
      Inc.**




**Notes
      to the Combined Financial Statements**


***As
      of June 30, 2008 and***


***For
      Each of the Three and Six Month Periods Ended June 30, 2008 and
      2007***





**7.**
            **Debt,
                Continued**




The
      Company incurred interest expense during the three and six month periods ended
      June 30, 2008 and 2007 of $33,559, $135,345, $84,058 and $166,274, respectively,
      all of which was charged to operations.




Debt
      is
      scheduled to mature during the twelve month periods ended June 30 as
      follows:




2009
            
            $
            280,0002010
            
            
            560,0002011
            
            
            560,000




**8.**
            **Commitments
                and Contingencies**




*Financial
      Results, Liquidity and Management's Plan*




The
      Company’s success will depend in part on its ability to obtain patents (one is
      now pending in 36 countries) and to expand its OneVision® product license
      holders and related revenue, to maintain its trade secrets, and to operate
      without infringing on the proprietary rights of others, both in the United
      States and other countries. There can be no assurance that patents issued to
      or
      licensed by the Company will not be challenged, invalidated, or circumvented,
      or
      that the rights granted there under will provide proprietary protection or
      competitive advantages to the Company.




The
      accompanying financial statements as of June 30, 2008 have been prepared
      assuming the Company will continue as a going concern. The Company, over time,
      has experienced recurring losses and negative cash flows from operations, and
      as
      of June 30, 2008, the Company’s current liabilities exceeded its current assets
      by $991,356 and its total liabilities exceeded its total assets by $2,021,616.
      The Company also has substantial debt that was restructured in January 2008
      (Note 7 - Debt). These factors raise substantial doubt about the Company's
      ability to continue as a going concern. During 2008, management intends to
      raise
      additional debt and/or equity financing to fund future operations, ongoing
      software development costs and debt retirement needs. The Company’s marketing
      plan is to assist its licensees and to promote the expand acceptance and use
      of
      its OneVision®product, and to develop additional applications in industries
      where there is significant anticipated demand requirements. Management believes
      that its plans will contribute towards achieving profitability but there is
      no
      assurance that they can be implemented; or that the results will be of a
      sufficient level necessary to meet the Company’s ongoing cash needs. No
      assurances can be given that the Company can obtain sufficient working capital
      through borrowings from a related party or lending institutions or that the
      continued implementation of its business plan will generate sufficient revenues
      in the future to sustain ongoing operations.





F-20





**ForgeHouse,
      Inc.**




**Notes
      to the Combined Financial Statements**


***As
      of June 30, 2008 and***


***For
      Each of the Three and Six Month Periods Ended June 30, 2008 and
      2007***





**8.**
            **Commitments
                and Contingencies,
                Continued**




The
      accompanying financial statements do not include any adjustments to reflect
      the
      possible future effects on the recoverability and classification of assets
      or
      the amounts and classifications of liabilities that may result from the possible
      inability of the Company to continue as a going concern. As discussed in Note
      10
      - Equity Transactions, the Company was able to obtain additional working capital
      in connection with the reverse acquisition in January 2008.




*Legal
      Actions*




Certain
      conditions may exist as of the date the financial statements are issued, which
      may result in a loss to the Company, but which will only be resolved when one
      or
      more future events occur or fail to occur. The Company’s management and its
      legal counsel assess such contingent liabilities, and such assessment inherently
      involves an exercise of judgment. In assessing loss contingencies related to
      legal proceedings that are pending against the Company or unasserted claims
      that
      may result in such proceedings, the Company’s legal counsel evaluates the
      perceived merits of any legal proceedings or unasserted claims as well as the
      perceived merits of the amount of relief sought or expected to be sought
      therein.




If
      the
      assessment of a contingency indicates that it is probable that a material loss
      has been incurred and the amount of the liability can be estimated, then the
      estimated liability would be accrued in the Company’s financial statements. If
      the assessment indicates that a potentially material loss contingency is not
      probable but is reasonably possible, or is probable but cannot be estimated,
      then the nature of the contingent liability, together with an estimate of the
      range of possible loss if determinable and material, would be
      disclosed.




Loss
      contingencies considered remote are generally not disclosed unless they involve
      guarantees, in which case the guarantees would be disclosed.




*Operating
      Leases*




The
      Company recognized rental expense of $8,740 $17,569, $1,319 and $17,658 for
      the
      three and six month periods ended June 30, 2008 and 2007, respectively. The
      Company occupied its Norcross, Georgia facility under a rental agreement that
      had a lease term that expired in March 2007. The Company began subleasing space
      from a third party for $1,500 per month in October 2007 on a month-to-month
      basis until they entered their current lease agreement starting on June 1,
      2008.
      The 39 month lease calls for initial monthly payments of $3,623 and does not
      have any renewal options.




*Concentration
      of Credit Risk*




Financial
      instruments, which potentially subject the Company to concentrations of credit
      risk, consist primarily of the accounts receivable - trade. The Company operates
      in a market segment that is highly competitive and rapidly changing. Significant
      technological changes, shifting customer requirements, the emergence of
      competitive products with new capabilities and other factors could negatively
      impact the Company's operating results.





F-21





**ForgeHouse,
      Inc.**




**Notes
      to the Combined Financial Statements**


***As
      of June 30, 2008 and***


***For
      Each of the Three and Six Month Periods Ended June 30, 2008 and
      2007***





**8.**
            **Commitments
                and Contingencies,
                Continued**




The
      Company had two customers that individually comprised more than 10% of the
      accounts receivable - trade balance, for a total of 89% of the accounts
      receivable - trade balance at June 30, 2008.




Two
      customers were individually responsible for more than 10% of the revenue for
      the
      three and six month periods ended June 30, 2008, totaling 86% and 79%,
      respectively, of the Company's sales during the period. These customers
      individually made up more than 10% of the Company's sales during 2007, totaling
      96% and 94% of total sales during the three and six month periods ended June
      30,
      2007.




The
      Company made 100% of its hardware purchases for resale from one vendor in the
      three and six month periods ended June 30, 2008. The Company feels that other
      vendors with similar products could be used.




If
      the
      Company were to lose any of these customers or vendors, the impact on its
      financial statements would be unknown, but could be significant. The Company
      has
      not experienced any such loss of customers or vendors as of June 30,
      2008.




**9.**
            **Related
                Party Transactions**




*Personal
      Guarantees*




VIE's
      SBA Loan




TWE
      Members provided personal guarantees for the VIE's SBA loan (Note 7 - Debt)
      that
      was fully satisfied in February 2008. Each of the personal guarantees was for
      an
      amount not to exceed the SBA Loan principal balance plus costs and unpaid
      accrued interest.




Short
      Term Bridge Financing




TWE
      Members provided personal guarantees for the Short Term Bridge Financing (Note
      7
      - Debt). Each of the personal guarantees was for an amount not to exceed the
      loan principal balance plus costs and unpaid accrued interest.




*Contributed
      Services*




An
      individual, who was an equity holder of ForgeHouse and a shareholder of the
      Company, provided software development services during the year ended December
      31, 2007. The contributed services provided to ForgeHouse were recorded at
      a
      fair value of $54,000 and the equity holder did not receive additional
      membership units or capital participation (Note 10 - Equity Transactions).





F-22





**ForgeHouse,
      Inc.**




**Notes
      to the Combined Financial Statements**


***As
      of June 30, 2008 and***


***For
      Each of the Three and Six Month Periods Ended June 30, 2008 and
      2007***





**10.**
            **Equity
                Transactions**




*Capital
      Contributions*




During
      the year ended December 31, 2007, the two largest equity holders in ForgeHouse
      contributed $200,943 of additional-paid-in-capital.




In
      the
      year ended December 31, 2007, a ForgeHouse equity holder contributed as
      additional-paid-in-capital the amount due him by the ForgeHouse for past
      software programming services related to the ongoing software system development
      of OneVision ® .
      The
      fair value of the contributed services was $54,000 based on the fair value
      of
      the services. The total amount was charged to operations as software development
      costs.




*Sale
      of Units*




On
      January 31, 2008, the Company sold 2,000,000 units, each unit consisted of
      one
      share of the Company's Series A Convertible Preferred stock and one warrant
      to
      purchase a share of the Company's common stock. The total proceeds from this
      transaction was $2,100,000. Each of the Series A Preferred shares is convertible
      into the Company's common stock on a one-to-one basis. The Series A Preferred
      Shares are senior as to all other equity instruments, voting, and have a
      dividend rate of 4% of the stated liquidation preference amount of $2,000,000.
      The warrants have an exercise price of $1.00 and expire two years from the
      grant date.




*Shares
      Issued for Cash*


In
        June
        2008, the Company issued 244,022 shares of the Company’s common stock to eight
        individuals for cash proceeds of $290,388, which is $1.19 per share.  The
        share price represented a 30% discount to the 10-trading-day volume weighted
        average closing price of the common stock, with May 29, 2008, as the
        10 th trading
        day.  As stipulated in the restructured Arngrove note payable agreement,
        the Company is required to remit 20% of all funds raised to Arngrove to be
        applied first to the then outstanding principal balance of the note payable
        and
        second to any interest accrued thereon.
 *Shares
          Issued in Satisfaction of Accounts Payable - Trade*
 
 In
          June
          2008, the Company issued 45,812 shares of the Company’s common stock to two
          individuals for satisfaction of $45,800 of accounts payable - trade at
          $1.00 per
          share.




*Options
      Activity*




A
      summary
      of the option activity as of June 30, 2008, and changes during the period then
      ended is presented below:




WeightedAverageWeighted
            
            Remaining
            
            AggregateNumber of
            
            Average
            
            Contractual
            
            IntrinsicOptions
            
            Exercise Price
            
            Term (Years)
            
            ValueOutstanding
                  atDecember 31, 2007
            
            
            -
            
            
            -
            
            
            -
            
            
            -Granted
            
            
            1,877,000
            
            $
            1.00
            
            
            -
            
            
            -Exercised
            
            
            -
            
            
            -
            
            
            -
            
            
            -Forfeited
            
            
            -
            
            
            -
            
            
            -
            
            
            -Expired
            
            
            -
            
            
            -
            
            
            -
            
            
            -Outstanding
                at June 30, 2008
            
            
            1,877,000
            
            $
            1.00
            
            
            6.84
            
            $
            647,950Exercisable
                at June 30, 2008
            
            
            727,000
            
            $
            1.01
            
            
            7.60
            
            $
            245,450





F-23





**ForgeHouse,
      Inc.**




**Notes
      to the Combined Financial Statements**


***As
      of June 30, 2008 and***


***For
      Each of the Three and Six Month Periods Ended June 30, 2008 and
      2007***





**10.**
            **Equity
                Transactions,
                Continued**




On
      January 31, 2008, the Company granted options to purchase 251,000 shares of
      its
      common stock to the Company's Chief Executive Officer immediately following
      the
      Merger Agreement as a condition for entering his employment agreement. The
      options have an exercise price of $1.00, vest immediately and expire 10 years
      from the grant date. The Company also granted options to purchase 90,000 shares
      of its common stock to the Company's Chief Operating Officer immediately
      following the Merger Agreement as a condition for entering his employment
      agreement. The options have an exercise price of $1.10, vest immediately and
      expire 5 years from the grant date.




On
      January 31, 2008, the Company granted options to purchase 186,000 shares of
      its
      common stock to the Company's Chief Operating Officer immediately following
      the
      Merger Agreement as a condition for entering his employment agreement. The
      options have an exercise price of $1.00, vest immediately and expire 10 years
      from the grant date.




On
      January 31, 2008, the Company granted options to purchase 75,000 shares of
      its
      common stock to both the Company's Chief Strategy Officer and the Chief
      Technology Officer immediately following the Merger Agreement for entering
      their
      employment agreements. The options have an exercise price of $1.00, vest
      immediately and expire in 5 years from the grant date.




On
      January 31, 2008, the Company granted options to purchase 225,000 shares of
      its
      common stock to each of two employees for past services immediately following
      Merger Agreement. The options have an exercise price of $1.00, vest evenly
      on
      each of the first three anniversaries of the grant date and expire 5 years
      from
      the grant date.




On
      February 15, 2008, the Company granted options to purchase 350,000 shares of
      its
      common stock to the Company's Chief Financial Officer for entering his
      employment agreement. The options have an exercise price of $1.00, 50,000 vest
      immediately, and the remaining 300,000 vest evenly on each of the first three
      anniversaries of the grant date and expire 5 years from the grant date. The
      Company also granted options to purchase 400,000 shares of its common stock
      to
      the Company's Chief Financial Officer for entering his employment agreement.
      The
      options have an exercise price of $1.00 and vest evenly on each of the first
      three anniversaries of the grant date and expire 10 years from the grant date.





F-24





**ForgeHouse,
      Inc.**




**Notes
      to the Combined Financial Statements**


***As
      of June 30, 2008 and***


***For
      Each of the Three and Six Month Periods Ended June 30, 2008 and
      2007***





**10.**
            **Equity
                Transactions,
                Continued**




The
      assumptions used in the Black-Scholes option pricing model for the stock options
      granted during the six month period ended June 30, 2008 were as
      follows:





For
                theSix
                MonthPeriod
                EndedJune
                30, 2008Risk-free
                interest rate
            
            
            2.78 to 3.83%Expected volatility
                of common stock
            
            
            92%Dividend
                yield
            
            
            $0.00Expected
                life of options
            
            
            5-10 yearsWeighted
                average fair market value of options granted
            
            
            $1.13




*Warrant
      Activity*




A
      summary
      of the warrant activity as of June 30, 2008, and changes during the period
      then
      ended is presented below:




WeightedAverageNumber of
            
            ExerciseWarrants
            
            Price**Outstanding,
                December 31, 2007**
            
            
            -
            
            
            -Issued
            
            
            2,000,000
            
            $
            1.00Exercised
            
            
            -
            
            
            -**Outstanding,
                June 30, 2008**
            
            
            **2,000,000**
            
            **$**
            **1.00****Exercisable,
                June 30, 2008**
            
            
            **2,000,000**
            
            **$**
            **1.00**




On
      January 31, 2008, the Company sold 2,000,000 units, each unit consisted of
      one
      share of the Company's Series A Convertible Preferred stock and one warrant
      to
      purchase a share of the Company's common stock. The warrants have an exercise
      price of $1.00 and expire two years from the grant date.




*Shares
      Reserved for Future Issuance*




The
      Company has reserved shares for future issuance upon exercise of outstanding
      options and warrants as follows:




Options
            
            
            1,877,000Warrants
            
            
            2,000,000**Reserved
                shares at June 30, 2008**
            
            
            **3,877,000**





F-25





**ForgeHouse,
      Inc.**




**Notes
      to the Combined Financial Statements**


***As
      of June 30, 2008 and***


***For
      Each of the Three and Six Month Periods Ended June 30, 2008 and
      2007***





**11.**
            **Earnings
                Per Share**




In
      accordance with FASB Statement No. 128, Earnings Per Share, the Company
      calculates basic and diluted net loss per share using the weighted average
      number of common shares outstanding during the periods presented and adjust
      the
      amount of net loss, used in this calculation, for preferred stock dividends
      declared during the period.




The
      Company incurred a net loss in each period presented, and as such, did not
      include the effect of potentially dilutive common stock equivalents in the
      diluted net loss per share calculation, as their effect would be anti-dilutive
      for all periods. Potentially dilutive common stock equivalents would include
      the
      common stock issuable upon the conversion of the convertible preferred stock
      and
      the exercise of warrants and stock options that have conversion or exercise
      prices below the market value of the Company’s common stock at the measurement
      date. As of June 30, 2008, all potentially dilutive common stock equivalents
      amounted to 5,877,000 shares.




The
      following table illustrates the computation of basic and diluted net loss per
      share:





For the
            
            For the
            
            For the
            
            For theSix Month
            
            Six Month
            
            Three Month
            
            Three MonthPeriod Ended
            
            Period Ended
            
            Period Ended
            
            Period EndedJune 30, 2008
            
            June 30, 2007
            
            June 30, 2008
            
            June 30, 2007Numerator:Net
                loss
            
            $
            (1,812,651
            )
            $
            (554,817
            )
            
            (584,869
            )
            
            (289,301
            )Denominator:Denominator
                for basic and diluted net loss per share-weighted average number
                of common
                shares outstanding
            
            
            25,814,732
            
            
            15,000,000
            
            
            28,058,035
            
            
            15,000,000Basic
                and diluted net loss per share
            
            $
            (0.07
            )
            $
            (0.04
            )
            
            (0.02
            )
            
            (0.02
            )




The
      following table sets forth potential shares of common stock that are not
      included in the diluted net loss per share because to do so would be
      antidilutive since the Company reported net losses in all the reporting
      periods:




For the
            
            For the
            
            For the
            
            For theSix Month
            
            Six Month
            
            Three Month
            
            Three MonthPeriod Ended
            
            Period Ended
            
            Period Ended
            
            Period EndedJune 30, 2008
            
            June 30,
                2007
            
            June
                30, 2008
            
            June
                30, 2007Options
                to purchase shares of common stock
            
            
            1,877,000
            
            
            -
            
            
            1,877,000
            
            
            -Warrants
                to purchase shares of common stock
            
            
            2,000,000
            
            
            -
            
            
            2,000,000
            
            
            -Convertible
                preferred stock
            
            
            2,000,000
            
            
            -
            
            
            2,000,000
            
            
            -**Total**
            
            
            **5,877,000**
            
            
            **-**
            
            
            **5,877,000**
            
            
            **-**




F-26




**ITEM
      2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS.**





The
      following discussion of the financial condition and results of operation of
      ForgeHouse, Inc. (“ForgeHouse,” the “Company,” “we,” “us,” and, as noted, the
“Resulting Company”) should be read in conjunction with the financial statements
      and the notes to those statements included herein. This discussion includes
      forward-looking statements that involve risk and uncertainties. Actual results
      may differ materially from those anticipated in the forward-looking
      statements.





**Overview**





ForgeHouse
      is in the business-to-business arena and is focused on providing scalable,
      Enterprise-class web-based solutions that increase productivity and
      accountability by workflow optimization. Our markets range from Fortune 1000
      companies to Government to Small and Medium Enterprises and Businesses (SMEs
      and
      SMBs).





During
      the quarter ended June 30, 2008, we continued to market our software solution
      to
      targeted prospects. At the close of the quarter, we signed an agreement with
      Tishman Speyer to use our OneVision® software in its Southeast Region. Tishman
      Speyer is one of the leading owners, developers, operators, and fund managers
      of
      first-class real estate in the world, having managed a portfolio of assets
      since
      its inception of over 113 million square feet and more than 91,000 residential
      units in major metropolitan areas across the United States, Europe, Latin
      America and Asia.





During
      the quarter ended June 30, 2008, we completed a private placement with a limited
      number of accredited investors. Nevertheless, we will need to obtain additional
      operating capital during the balance of our 2008 fiscal year to fund continuing
      software development and to increase our sales team to penetrate and gain
      traction in the markets identified as critical to our business success. Although
      we are considering various debt or equity financings, there can be no assurance
      that any financing will be available to us on terms acceptable to us or at
      the
      time that we that we would require such financing, or at all. Failure to obtain
      any such financing will result in our inability to effectuate our business
      plan.
      As of the date of this Quarterly Report, we have not entered into any agreements
      and have not received any commitments to obtain any such financing.





In
      July
      2007, the members (the “Members”) of ForgeHouse, LLC, a Georgia limited
      liability company (the “Operating Company”), entered into a Nonbinding Letter of
      Intent with Milk Bottle Cards, Inc. (“Milk Bottle”) (a non-operating public
      shell corporation), whereby the Members were to exchange their membership
      interests for Milk Bottle common stock and cash. On January 31, 2008, Milk
      Bottle and the Members entered certain agreements (the “Exchange Agreement”)
      that resulted in, among other items, the exchange of all of their membership
      interests in the Operating Company for 10,500,000 shares of common stock of
      Milk
      Bottle (approximately 37.5% of all outstanding common stock of the Company
      as of
      the closing of the exchange transaction). As a result of the exchange, the
      Operating Company became a wholly-owned subsidiary of Milk Bottle, which changed
      its name to ForgeHouse, Inc. (sometimes referred to as the “Resulting
      Company”).





**For
      the Quarter and Six Months Ended June 30, 2008 in Comparison to the Quarter
      and
      Six Months Ended June 30, 2007.**




**Results
      of Operations**




Financial
      statements for the quarter and six months ended June 30, 2007, contain
      information of both the Operating Company combined with GS Security Group,
      a
      variable interest entity; financial statements for the six months ended June
      30,
      2008, contain information of the Operating Company (through January 31, 2008,
      the date of the closing of the exchange transaction) and of the Resulting
      Company (combined with GS Security Group through February 2008, when a bank
      loan
      owed by the Operating Company was repaid.





**Net
      Revenue**





Net
      revenues for the three months ended June 30, 2008, decreased to $50,000 from
      $102,000 in the prior year, a decrease of approximately 51%. Revenues from
      the
      ASP service decreased by approximately 31%, while sales of hardware decreased
      by
      approximately 77%. One customer accounted for 63% and another for 16% of total
      net revenues for the three months ended June 30, 2008.


2


Net
      revenues for the six months ended June 30, 2008, decreased to $119,000 from
      $127,000 in the prior year, a decrease of approximately 7%. Revenues from the
      ASP service decreased by approximately 4%, while sales of hardware decreased
      by
      approximately 30%. One customer accounted for 73% and another for 13% of total
      net revenues for the six months ended June 30, 2008.





The
      decrease in revenues for the current periods in comparison to the prior periods
      was the result of one customer in the prior periods purchasing test licenses
      and
      hardware to support initial tests, which test purchases did not need to be
      repeated in the current periods.





**Cost
      of Revenue**





Cost
      of
      revenue primarily consists of Server Hosting Cost and Cost of Hardware purchased
      for resale. Cost of revenue for the three months ended June 30, 2008, decreased
      to $22,000 from $43,000 in the prior year. Cost of sales as a percentage of
      sales was 103% for the period ending June 30, 2008, and 156% for the prior
      period. The lower cost of revenue was due to reduced hardware sales, as
      described in Net Revenue, above.





Cost
      of
      revenue for the six months ended June 30, 2008, decreased to $45,000 from
      $57,000 in the prior year. Cost of sales as a percentage of sales was 103%
      for
      the period ending June 30, 2008, and 156% for the prior period. The lower cost
      of revenue was due to reduced hardware sales, as described in Net Revenue,
      above.





**Operating
      Expenses**





Total
      operating expenses for the three months ended June 30, 2008, increased to
      $534,000 from $139,000 in the prior year. For the six months ended June 30,
      2008, operating expenses increased to $2,024,000 from $268,000. The expense
      breakdown is as follows:


**Three Months Ending June 30**
              
              **Six Months Ending June 30****Operating Expenses**
              
              **2008**
              
              **2007**
              
              **Var B(W)**
              
              **Var B(W)**
              
              **2008**
              
              **2007**
              
              **Var
                  B(W)**
              
              **Var
                  B(W)****$
                  000**
              
              **$
                  000**
              
              **$
                  000**
              
              **%**
              
              **$
                  000**
              
              **$
                  000**
              
              **$
                  000**
              
              **%**Payroll
                  related expenses
              
              
              257
              
              
              45
              
              
              (212
              )
              
              (472
              )%
              
              489
              
              
              98
              
              
              (392
              )
              
              (402
              )%Professional
                  fees
              
              
              87
              
              
              35
              
              
              (52
              )
              
              (149
              )%
              
              328
              
              
              45
              
              
              (284
              )
              
              (634
              )%Depreciation
                  and Amortization
              
              
              11
              
              
              9
              
              
              (2
              )
              
              (24
              )%
              
              21
              
              
              18
              
              
              (2
              )
              
              (14
              )%Stock-based
                  charges
              
              
              107
              
              
              0
              
              
              (107
              )
              
              N/A
              
              
              1,014
              
              
              0
              
              
              (1,014
              )
              
              N/AGeneral
                  and Administrative
              
              
              71
              
              
              50
              
              
              (21
              )
              
              (42
              )%
              
              172
              
              
              107
              
              
              (65
              )
              
              (60
              )%**Total**
              
              
              **534**
              
              
              **139**
              
              
              (395
              )
              
              (284
              )%
              
              **2,024**
              
              
              **268**
              
              
              (1,757
              )
              
              (656
              )%





*
            ***Payroll
                related expenses***were attributable to salaries, benefits, related taxes and group
                health
                insurance for our officers and employees. Payroll expenses for the
                quarter
                ending June 30, 2008, increased to $ 257,000 from $45,000 in the
                prior
                year. For the six months ended June 30, 2008, payroll expenses increased
                to $489,000 from $98,000. Substantially all of such increases were
                due to
                our hiring a Chief Technology Officer, Chief Strategic Officer and
                Vice
                President of Sales in late 2007 and a Chief Financial Officer in
                2008. We
                anticipate that payroll expenses will continue to increase during
                the
                remainder of our current fiscal year, as our plan is to expand our
                sales
                and support staff in order to meet our growth
                targets.





*
            ***Professional
                fees***represent both accounting and legal fees. We anticipate that our
                professional fees will decrease during the balance of the fiscal
                year, as
                a material amount of professional service fees were incurred during
                the
                six months ended June 30, 2008, in connection with the January 31,
                2008,
                exchange transaction and related filings with the Securities and
                Exchange
                Commission.





*
            ***Depreciation
                and Amortization expenses***represent depreciation of fixed assets over three years and amortization
                of software development over five years. We expect depreciation expenses
                to increase for the balance of this fiscal year as we acquire additional
                fixed assets for the use of an expected increasing number of
                employees.





*
            ***Stock-Based
                Charges***represent the amortization of stock options issued to management
                and
                certain of our other employees. Since the total option value is amortized
                over the vesting period, the charges were higher for the first quarter
                of
                2008 because certain of the options vested on the date of grant.
                We
                anticipate that, during the balance of this fiscal year, stock-based
                charges will remain at a level commensurate with the three months
                ended
                June 30, 2008.


3


*
            ***General
                and Administrative expenses***are primarily comprised of Occupancy & Equipment, Travel &
                Entertainment, Printing & Stationary, Postage & Delivery, Office
                Supplies, and Fees. We expect these expenses to moderate during the
                balance of this fiscal year, as a major portion of the expenses to
                date
                related to the January 31, 2008, exchange
                transaction.





**Other
      Expense**





For
      the
      three months ended June 30, 2008 interest expense amounted to $34,000. For
      the
      six months ended June 30, 2008, interest expense amounted to $133,000 and was
      attributable to two notes payable. These notes were renegotiated in January
      2008
      as described in Liquidity and Capital Resources, below.





**Net
      Loss**





For
      the
      three months ended June 30, 2008, we reported a loss from operations of $584,000
      (or a loss per share of $0.02), compared to $289,000 for the equivalent period
      in the prior year.





For
      the
      six months ended June 30, 2008, we reported a loss from operations of $1,813,000
      (or a loss per share of $0.07), compared to $554,800 for the equivalent period
      in the prior year. The overall net loss increased in comparison with last year
      due to the increases in Operating Expenses described above, notwithstanding
      a
      one-time gain on restructuring of debt of $365,000 that was partially offset
      by
      stock-based charges of $1,014,000.





**Liquidity
      and Capital Resources**





Liquidity
      is the ability of a company to generate funds to support its current and future
      operations, satisfy its obligations, and otherwise operate on an ongoing basis.
      At June 30, 2008, we had a cash balance of $137,000 and a working capital
      deficit of $991,000. During the three months ended June 30, 2008, we completed
      a
      private placement of our restricted common stock with a limited number of
      accredited investors for gross proceeds of approximately $290,000. We also
      issued shares of our restricted common stock in exchange for the retirement
      of
      $45,000 of trade payables. Our balance sheet at June 30, 2008 reflects long-term
      notes payable of $1,120,000.





Net
      cash
      flows used by operating activities for the six months ended June 30, 2008
      amounted to $1,484,000 and were primarily attributable to our net loss of
      $1,813,000, payment of an agreed-upon sum for interest and fees from a prior
      series of private financings of $369,000, and repayment of stockholder loans
      $92,000. Net cash flows used in investing activities for the six months ended
      June 30, 2008 amounted to $197,000 and were primarily used for the January
      31,
      2008, exchange transaction. Net cash flows provided by financing activities
      for
      the six months ended June 30, 2008, amounted to $1,818,000 and were primarily
      attributable to the $1,850,000 net proceeds of a Preferred Stock financing
      that
      closed in connection with the January 31, 2008, exchange transaction, and
      $290,000 in proceeds from the equity private placement, as offset by repayment
      of a short-term loan in the amount of $300,000, repayment of the Operating
      Company’s bank loan in the amount of $220,000, and a partial prepayment of the
      long-term loan in the amount of $58,000.





At
      June
      30, 2008, we had cash of $137,000 which cash balance represented a net increase
      in cash during the six months ended June 30, 2008 of $140,000. Our cash balance
      as of December 31, 2007, was ($3,000). We have no currently planned material
      commitments for capital expenditures; however, other than our current cash,
      we
      presently have no other alternative source of operating capital, without which
      we may be unable to continue software development, to increase our sales team
      to
      penetrate and gain traction in the markets identified as critical to our
      business success, or to have the capital necessary to fund our ongoing
      operations and obligations. Although we are considering various debt or equity
      financings, there can be no assurance that any financing will be available
      to us
      on terms acceptable to us or at the time that we that we would require such
      financing, or at all. Failure to obtain any such financing will result in our
      inability to effectuate our business plan. As of the date of this Quarterly
      Report, we have not entered into any agreements and have not received any
      commitments to obtain any such financing.





**Off-Balance
      Sheet Arrangements**





We
      have
      no off-balance sheet arrangements at June 30, 2008.


4


**Critical
      Accounting Policies and Estimates**





Our
      discussion and analysis of our financial condition and results of operations
      are
      based on our financial statements, which have been prepared in accordance with
      accounting principles generally accepted in the United States of America. The
      preparation of these financial statements requires us to make estimates and
      judgments that affect the reported amounts of assets, liabilities and expenses.
      On an ongoing basis, we evaluate our estimates and judgments, including those
      related to accrued expenses, fair valuation of stock related to stock-based
      compensation and income taxes. We based our estimates on historical experience
      and on various other assumptions that we believe to be reasonable under the
      circumstances, the results of which form the basis for making judgments about
      the carrying values of assets and liabilities that are not readily apparent
      from
      other sources. Actual results may differ from these estimates under different
      assumptions or conditions.





Use
      of
      Estimates





In
      preparing the financial statements, management is required to make estimates
      and
      assumptions that affect the reported amounts of assets and liabilities as of
      the
      date of the statements of financial condition, revenues, and expenses for the
      period then ended. Actual results may differ significantly from those estimates.
      Significant estimates made by management include, but are not limited to,
      stock-based compensation, valuation of debt discounts, and useful life of
      property and equipment.





Accounts
      Receivable





We
      have a
      policy of reserving for uncollectible accounts based on its best estimate of
      the
      amount of probable credit losses in its existing accounts receivable. We
      periodically review our accounts receivable to determine whether an allowance
      is
      necessary based on an analysis of past due accounts and other factors that
      may
      indicate that the realization of an account may be in doubt. Account balances
      deemed to be uncollectible are charged to the allowance after all means of
      collection have been exhausted and the potential for recovery is considered
      remote.





Inventories





Inventories
      are stated at the lower of cost or market utilizing the first-in, first-out
      method and consist of raw materials related to our products. We intend to write
      down inventory for estimated obsolescence or unmarketable inventory based upon
      assumptions and estimates about future demand and market conditions. If actual
      market conditions become less favorable than those projected by us, additional
      inventory write-downs might be required.





Property
      and Equipment





Property
      and equipment are carried at cost. Depreciation and amortization are provided
      using the straight-line method over the estimated economic lives of the assets.
      The cost of repairs and maintenance is expensed as incurred; major replacements
      and improvements are capitalized. When assets are retired or disposed of, the
      cost and accumulated depreciation are removed from the accounts, and any
      resulting gains or losses are included in income in the year of
      disposition.





Revenue
      Recognition





We
      follow
      the guidance of the SEC’s Staff Accounting Bulletin No. 104, “Revenue
      Recognition in Financial Statements”. In general, we record revenue when
      persuasive evidence of an arrangement exists, services have been rendered or
      product delivery has occurred, the sales price to the customer is fixed or
      determinable, and collectability is reasonably assured.





The
      following policies reflect our specific criteria for our revenue stream: We
      generate revenue from the sale of our beverage products. Revenues from the
      sale
      of these items are recognized upon delivery of the product to the customer.
      Consideration given by us to a customer (including a reseller of our products)
      such as slotting fees is accounted for as a reduction of revenue when recognized
      in our income statement.





Stock
      Based Compensation





We
      adopted Statement of Financial Accounting Standards No. 123 (revised
      2004), *Share Based Payment* (“SFAS
      No. 123R”). SFAS No. 123R establishes the financial accounting and reporting
      standards for stock-based compensation plans. As required by SFAS No. 123R,
      we
      recognized the cost resulting from all stock-based payment transactions
      including shares issued under our stock option plans in the financial
      statements.


5


Non-Employee
      Stock-Based Compensation





The
      cost
      of stock based compensation awards issued to non-employees for services are
      recorded at either the fair value of the services rendered or the instruments
      issued in exchange for such services, whichever is more readily determinable,
      using the measurement date guidelines enumerated in Emerging Issues Task Force
      Issue (“EITF”) 96-18, “Accounting for Equity Instruments That Are Issued to
      Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or
      Services” (“EITF 96-18”).





Recent
      Accounting Pronouncements





In
      September 2006, the FASB issued Statement of Financial Accounting Standards
      No.
      157, “Fair Value Measurements” (“FAS 157”). This Statement defines fair value as
      used in numerous accounting pronouncements, establishes a framework for
      measuring fair value in generally accepted accounting principles and expands
      disclosure related to the use of fair value measures in financial statements.
      The Statement is to be effective for the Company’s financial statements issued
      in 2008; however, earlier application is encouraged. The
      adoption of this interpretation did not have an impact on the Company’s
      financial position, results of operations, or cash flows.





In
      September 2006, the SEC issued Staff Accounting Bulletin No. 108, *considering
      the Effects of Prior Year Misstatements when quantifying Misstatements in
      Current Year Financial Statements* (“SAB
      108”). SAB 108 requires companies to evaluate the materiality of identified
      unadjusted errors on each financial statement and related financial statement
      disclosure using both the rollover approach and the iron curtain approach,
      as
      those terms are defined in SAB 108. The rollover approach quantifies
      misstatements based on the amount of the error in the current year financial
      statement, whereas the iron curtain approach quantifies misstatements based
      on
      the effects of correcting the misstatement existing in the balance sheet at
      the
      end of the current year, irrespective of the misstatement’s year(s) of origin.
      Financial statements would require adjustment when either approach results
      in
      quantifying a misstatement that is material. Correcting prior year financial
      statements for immaterial errors would not require previously filed reports
      to
      be amended. If a company determines that an adjustment to prior year financial
      statements is required upon adoption of SAB 108 and does not elect to restate
      its previous financial statements, then it must recognize the cumulative effect
      of applying SAB 108 in fiscal 2006 beginning balances of the affected assets
      and
      liabilities with a corresponding adjustment to the fiscal 2006 opening balance
      in retained earnings. SAB 108 is effective for interim periods of the first
      fiscal year ending after November 15, 2006. The adoption of SAB 108 did not
      have
      an impact on the Company’s financial statements.





In
      December 2006, FASB Staff Position No. EITF 00-19-2, *“Accounting
      for Registration Payment Arrangements,”* was
      issued. The FSP specifies that the contingent obligation to make future payments
      or otherwise transfer consideration under a registration payment arrangement,
      whether issued as a separate agreement or included as a provision of a financial
      instrument or other agreement, should be separately recognized and measured
      in
      accordance with SFAS No. 5, *“Accounting
      for Contingencies.”* The
      Company believes that its current accounting is consistent with the
      FSP.





In
      February 2007, the FASB issued SFAS No. 159, *“The
      Fair Value Option for Financial Assets and Financial Liabilities, Including
      an
      Amendment of FASB Statement No. 115”* ,
      under
      which entities will now be permitted to measure many financial instruments
      and
      certain other assets and liabilities at fair value on an
      instrument-by-instrument basis. This Statement is effective as of the beginning
      of an entity’s first fiscal year that begins after November 15, 2007. Early
      adoption is permitted as of the beginning of a fiscal year that begins on or
      before November 15, 2007, provided the entity also elects to apply the
      provisions of SFAS 157. The Company is currently assessing the impact, if any,
      that the adoption of SFAS 159 will have on its financial statements.





In
      May
      2007, the FASB issued FASB Staff Position No. FIN 48-1, *Definition of Settlement in FASB Interpretation No. 48* (the
“FSP”). The FSP provides guidance about how an enterprise should determine
      whether a tax position is effectively settled for the purpose of recognizing
      previously unrecognized tax benefits. Under the FSP, a tax position could be
      effectively settled on completion of examination by a taxing authority if the
      entity does not intend to appeal or litigate the result and it is remote that
      the taxing authority would examine or re-examine the tax position. The Company
      does not expect that this interpretation will have a material impact on its
      financial position, results of operations, or cash flows.





In
      December 2007, the FASB issued SFAS No. 141(R), *“Business
      Combinations,”* which
      replaces SFAS No. 141, *“Business
      Combinations,”* which,
      among other things, establishes principles and requirements for how an acquirer
      entity recognizes and measures in its financial statements the identifiable
      assets acquired, the liabilities assumed (including intangibles) and any
      noncontrolling interests in the acquired entity. SFAS No. 141(R) applies
      prospectively to business combinations for which the acquisition date is on
      or
      after the beginning of the first annual reporting period beginning on or after
      December 15, 2008. We are currently evaluating what impact our adoption of
      SFAS
      No. 141(R) will have on our financial statements.


6


In
      December 2007, the FASB issued SFAS No. 160, “ *Noncontrolling
      Interests in Consolidated Financial Statements, an amendment of ARB No.
      51.”* SFAS No.
      160 amends ARB 51 to establish accounting and reporting standards for the
      noncontrolling interest in a subsidiary and for the deconsolidation of a
      subsidiary. It also amends certain of ARB 51’s consolidation procedures for
      consistency with the requirements of SFAS No. 141(R). SFAS No. 160 is effective
      for fiscal years, and interim periods within those fiscal years, beginning
      on or
      after December 15, 2008. We are currently evaluating what impact our adoption
      of
      SFAS No. 160 will have on our financial statements.





Other
      accounting standards that have been issued or proposed by the FASB or other
      standards-setting bodies that do not require adoption until a future date are
      not expected to have a material impact on the financial statements upon
      adoption.





**ITEM
      4. CONTROLS AND PROCEDURES**





We
      carried out an evaluation, under the supervision and with the participation
      of
      our management, including our principal executive officer and our principal
      financial officer, of the effectiveness of the design and operation of our
      disclosure controls and procedures as of the end of the period covered by this
      report. Based upon the evaluation, our Chief Executive Officer and Chief
      Financial Officer concluded that our disclosure controls and procedures are
      effective at the reasonable assurance level for timely gathering, analyzing
      and
      disclosing the information we are required to disclose in our reports filed
      under the Securities Exchange Act of 1934. Our management, which includes our
      Chief Executive Officer and Chief Financial Officer, concluded that our
      disclosure controls and procedures are effective to (i) give reasonable
      assurance that the information required to be disclosed by us in reports that
      we
      file under the Securities Exchange Act of 1934 is recorded, processed,
      summarized and reported within the time periods specified in the Securities
      and
      Exchange Commission's rules and forms, and (ii) ensure that information required
      to be disclosed in the reports that we file or submit under the Securities
      Exchange Act of 1934 is accumulated and communicated to our management,
      including our CEO and CFO, to allow timely decisions regarding required
      disclosure.





There
      have been no changes in our internal control over financial reporting during
      our
      last fiscal quarter that has materially affected, or is reasonably likely to
      materially affect, our internal control over financial
      reporting.


7


**Part
      II - OTHER INFORMATION**





**ITEM
      2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
      PROCEEDS**





During
      the period covered by this Quarterly Report, we sold “equity securities” (as
      that term is defined in Section 3(a)(11) of the Securities Exchange Act of
      1934,
      as amended) to two persons in exchange for the extinguishing of certain trade
      payables owed by us to such persons and to seven other persons for
      cash.





Debt
      to Equity Conversion





In
      connection with a subscription agreement, on June 6, 2008, we sold and issued
      6,000 shares of our restricted common stock to an individual in exchange for
      $6,000 of trade payables owed by us to such individual for services previously
      rendered by said individual to us. The shares of common stock issued upon the
      conversion of the debt are subject to certain restrictions on resale. Until
      June
      6, 2010, the individual may not sell, transfer or otherwise dispose of such
      shares, except as specifically provided in the subscription
      agreement.





In
      connection with a subscription agreement, on June 17, 2008, we sold and issued
      39,812 shares of our restricted common stock to an individual **** in
      exchange for $39,812 of trade payables owed by us to such individual for
      services previously rendered by said individual to us. The shares of common
      stock issued upon the conversion of the debt are subject to certain restrictions
      on resale. Until June 17, 2009, the individual may not sell, transfer or
      otherwise dispose of 19,000 of such shares, except as specifically provided
      in
      the subscription agreement. Until June 17, 2010, the individual may not sell,
      transfer or otherwise dispose of 20,812 of such shares, except as specifically
      provided in the subscription agreement.





The
      issuances referenced above were made in reliance on Rule 505 of Regulation
      D, as
      promulgated by the Securities and Exchange Commission under the Securities
      Act
      of 1933, as amended (the “Securities Act”). We believe that such exemption was
      available because (i) no advertising or general solicitation was employed in
      offering the securities, (ii) the issuances were made to two persons, one of
      whom was an accredited individual and the other received applicable disclosure
      materials, and (iii) transfer of the shares of common stock is restricted in
      accordance with the requirements of the Securities Act (including the legending
      of the certificates representing the common stock issued pursuant
      thereto).





Stock
      Issued Pursuant to Certain Subscription Agreements





In
      connection with certain subscription agreements, on June 11, 2008, we sold
      to
      seven investors an aggregate of 244,022 shares of our restricted common stock
      at
      $1.19 per share in consideration of an aggregate of approximately $290,387
      in
      cash.





The
      issuances referenced above were made in reliance on either Rule 506 of
      Regulation D or Rule 903 of Regulation S, each as promulgated by the Securities
      and Exchange Commission under the Securities Act. We believe that exemption
      under Regulation D was available for the issuances to certain of the investors
      because (i) no advertising or general solicitation was employed in offering
      the
      securities, (ii) the issuance was made to three persons, each of whom was an
      accredited investor, and (iii) transfer of the shares of common stock is
      restricted in accordance with the requirements of the Securities Act of 1933
      (including the legending of the certificates representing the common stock
      issued pursuant thereto). We believe that the exemption under Regulation S
      was
      available for the issuances to the other investors because the sale of the
      common stock was completed in an “offshore transaction,” as defined in Rule
      902(h) of Regulation S. Further, we did not engage in any “directed selling
      efforts” (as defined in Regulation S) in the United States in connection with
      such sales. Each investor represented to us that such investor was not a “U.S.
      person” (as defined in Regulation S), and was not acquiring the common stock for
      the account or benefit of a U.S. person. The relevant subscription agreements
      included statements that the common stock had not been registered pursuant
      to
      the Securities Act and may not be offered or sold in the United States unless
      registered under the Securities Act or pursuant to an exemption therefrom.
      Each
      investor agreed : (i) to resell the common stock only in accordance with the
      provisions of Regulation S, pursuant to registration under the Securities Act,
      or pursuant to an exemption from registration thereunder; (ii) that we are
      required to refuse to register any resale of such common stock unless the
      transfer is made in accordance with the provisions of Regulation S, pursuant
      to
      registration under the Securities Act, or pursuant to an exemption from
      registration thereunder; and (iii) not to engage in hedging transactions with
      regard to the common stock unless in compliance with the Securities Act.
      Certificates representing all of the common stock issued were endorsed with
      a
      restrictive legend confirming that the common stock had been issued pursuant
      to
      Regulation S and could not be resold without registration under the Securities
      Act or an applicable exemption from the registration requirements
      thereof.


8


**ITEM
      6. EXHIBITS**





Exhibit
                No.
            
            Description2.1*
            
            Agreement
                and Plan of Exchange by and among Milk Bottle Cards, Inc., and certain
                members of ForgeHouse, LLC, dated January 31, 20082.2*
            
            Capital
                Interest Purchase Agreement, by and among the Company andPaul
                Grootendorst, Bryan Irving, Brooks Mileson, andIan
                Morl, dated January 31, 20082.3*
            
            Repurchase
                Agreement, by and between the Company and Nicole Milkovich, dated
                January
                31, 20083.1*
            
            Amended
                and Restated Articles of Incorporation, as filed with the Secretary
                of
                State of the State of Nevada, effective January 31,
                20083.2
            
            Bylaws,
                incorporated by reference to Exhibit 3(ii) of the Company’s Registration
                Statement on Form SB-2, filed on April 15, 20053.3*
            
            Certificate
                of Designation of Series A Convertible Preferred Stock, as filed
                with the
                Secretary of State of the State of Nevada, effective January 31,
                20083.4*
            
            Articles
                of Exchange, as filed with the Secretary of State of the State of
                Nevada,
                effective January 31, 200810.1
            
            2008
                Incentive Plan, incorporated by reference to Exhibit B of the Company’s
                definitive Information Statement on Schedule 14-C, filed January
                2,
                200810.2*
            
            Form
                on Incentive Stock Option Award Agreement under the 2008 Incentive
                Plan10.3*
            
            Form
                of Nonqualified Stock Option Award Agreement under the 2008 Incentive
                Plan10.4*
            
            Employment
                Agreement with John Britchford-Steel, dated as of January 31,
                200810.5*
            
            Employment
                Agreement with Jose Alonso, dated as of January 31,
                200810.6*
            
            Mutual
                Release, by and among the Company, ForgeHouse, LLC, andPaul
                Grootendorst, Bryan Irving, Brooks Mileson, andIan
                Morl, dated as of January 31, 200810.7*
            
            Form
                of Lock-Up Agreement, dated as of January 31, 2008, by and between
                the
                Company and each of certain beneficial stockholders.10.8*
            
            Form
                of Subscription Agreement, dated as of January 31, 2008, by and between
                the Company and each of certain preferred stockholders.10.9*
            
            Form
                of Common Stock Purchase Warrant, dated as of January 31, 2008, by
                and
                between the Company and each of certain preferred
                stockholders.10.10*
            
            Promissory
                Note, in favor of Arngrove Group Holdings Ltd., dated as of January
                31,
                200810.11*
            
            Promissory
                Note, in favor of After All Limited, dates as of January 31,
                200810.12*
            
            Subordination
                and Inter-creditor Agreement, by and among the Company, ForgeHouse,
                LLC,
                andPaul
                Grootendorst, Bryan Irving, Brooks Mileson, andIan
                Morl, dated as of January 31, 200810.13**
            
            Employment
                Agreement with Jorge Vargas, dated as of February 15,
                200810.14**/***
            
            Service
                and Software License Agreement, dated April 15, 2007, by and between
                the
                Company and Securitas Security Services USA,
                Inc.


9





10.15**
            
            Office
                Lease Agreement, by and between the Company and Wolff Atlanta Portfolio,
                LLC.31.1****
            
            Certification
                pursuant to Section 302 of the Sarbanes-Oxley Act.31.2****
            
            Certification
                pursuant to Section 302 of the Sarbanes-Oxley Act.32.1****
            
            Certification
                pursuant to Section 906 of the Sarbanes-Oxley
                Act.





*
      Incorporated by reference to the same Exhibit No. of the Current Report on
      Form
      8-K filed by the Company with the Securities and Exchange Commission on February
      7, 2008.


**
      Incorporated by reference to the same Exhibit No. of the Form 10-QSB filed
      by
      the Company with the Securities and Exchange Commission on May 20,
      2008.


***
      Portions omitted pursuant to a request for confidential treatment.


****
      Filed herewith.


10


**SIGNATURES**





In
      accorance with the requirements of the Exchange Act, the registrant has caused
      this report to be signed on its behalf by the undersigned thereunto duly
      authorized.




**FORGEHOUSE,
                INC.**By:
                /s/ John Britchford-SteelAugust
                14, 2008
            John
                Britchford-SteelChief
                Executive Officer


11