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UNITED STATES
  SECURITIES AND EXCHANGE COMMISSION
  WASHINGTON, DC 20549

FORM 10-QSB

(Mark One)

x Quarterly Report
  Pursuant To Section 13 Or 15(d) Of The Securities Exchange Act Of 1934 
  For the quarterly period ended June 30, 2004

 ̈ Transition Report
  Under Section 13 Or 15(D) Of The Securities Exchange Act Of 1934 
  For the transition period from _____ to _____

Commission File Number:000-26047

ENCORE CLEAN ENERGY, INC.(Exact Name of Small Business Issuer as Specified in Its Charter)

|Delaware                        | 65-0609891         
|------------------------------- | -------------------
|(State or Other Jurisdiction of | (I.R.S. Employer   
|Incorporation or Organization)  | Identification No.)

Suite 610  375 Water StreetVancouver, British Columbia, Canada V6B 5C6(Address of Principal Executive Offices)

(604) 801-5566(Issuer's Telephone Number, Including Area Code)

Not Applicable(Former Name, Former Address and Former Fiscal Year, if Changed Since
  Last Report)

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

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 12,806,775 shares of common stock, $0.001 par value per share, issued and outstanding as of August 9, 2004.

Transitional Small Business Disclosure Format (check one):
  
  Yes  ̈        No
  x

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ENCORE CLEAN ENERGY, INC. AND SUBSIDIARIESFORM 10-QSB
  QUARTERLY PERIOD ENDED JUNE 30, 2004
  INDEX

|                                                                                                       | Page
|------------------------------------------------------------------------------------------------------ | ----
|                                                                                                      
|PART I - FINANCIAL INFORMATION                                                                         | 3   
|                                                                                                      
|Item 1 - Financial Statements                                                                          | 3   
|                                                                                                      
|Consolidated Balance Sheets                                                                            |     
|As
      of June 30, 2004 (Unaudited) and December 31, 2003                                            | 4   
|Consolidated Statements of Operations and Deficit (Unaudited)                                          |     
|For
      the Six Months Ended June 30, 2004 and June 30, 2003                                         | 5   
|Consolidated Statements of Cash Flows (Unaudited)                                                      |     
|For
      the Six Months Ended June 30, 2004 and June 30, 2003                                         | 6   
|Notes to Unaudited Consolidated Financial Statements                                                   | 7-9 
|                                                                                                      
|Item 2 - Management's Discussion and Analysis of Financial
      Condition and   Results of Operations | 10  
|                                                                                                      
|Item 3 - Controls and Procedures                                                                       | 15  
|                                                                                                      
|PART II - OTHER INFORMATION                                                                            | 17  
|                                                                                                      
|Item 1 - Legal Proceedings                                                                             | 17  
|Item 2 - Changes in Securities and
      Use of Proceeds                                               | 17  
|Item 3 - Defaults Upon Senior Securities                                                               | 17  
|Item 4 - Submission of Matters to
      a Vote of Security Holders                                     | 17  
|Item 5 - Other Transactions                                                                            | 17  
|Item 6 - Exhibits and Reports on
      Form 8-K                                                        | 18  
|                                                                                                      
|Signatures                                                                                             | 19  

2

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS



3

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Encore Clean Energy, Inc.(Formerly Forge, Inc.) 
  Consolidated Balance Sheets (unaudited) 
  (expressed in United States Dollars)

June 30, 2004 and December 31, 2003

|                                                      |   | June 30,   |   |   | December 31, |  
|----------------------------------------------------- | - | ---------- | - | - | ------------ | -
|                                                      |   | 2004       |   |   | 2003         |  
|                                                     
|Assets                                                |   |            |   |   |              |  
|Current assets:                                       |   |            |   |   |              |  
|Cash                                                  | $ | -          |   | $ | 335          |  
|Accounts receivable                                   |   | 136,878    |   |   | 110,613      |  
|Prepaid
      expenses                                |   | 15,589     |   |   | 8,336        |  
|                                                      |   | 152,467    |   |   | 119,284      |  
|Property and equipment, less accumulated depreciation |   | 69,989     |   |   | 82,986       |  
|Technology and other intangible assets                |   | 2,322,167  |   |   | 2,133,340    |  
|                                                     
|                                                      | $ | 2,544,623  |   | $ | 2,335,610    |  
|                                                     
|Liabilities and Stockholders' Deficit                 |   |            |   |   |              |  
|Current liabilities:                                  |   |            |   |   |              |  
|Bank indebtedness                                     | $ | 493        |   | $ | 82,447       |  
|Accounts payable and accrued
      liabilities        |   | 1,681,380  |   |   | 1,664,907    |  
|Notes payable  current
      portion                 |   | 210,000    |   |   | 210,000      |  
|Loan payable                                          |   | 332,439    |   |   | -            |  
|Lease
      obligation - current portion              |   | 1,116      |   |   | 4,967        |  
|                                                      |   | 2,225,428  |   |   | 1,962,321    |  
|                                                     
|Due to related parties                                |   | 969,299    |   |   | 901,647      |  
|Total liabilities                                     |   | 3,194,727  |   |   | 2,863,968    |  
|                                                      |   |            |   |   |              |  
|Stockholders' deficit:                                |   |            |   |   |              |  
|Common stock                                          |   | 12,807     |   |   | 12,618       |  
|Additional paid-in capital                            |   | 6,103,768  |   |   | 5,802,498    |  
|Deficit                                               |   | (6,462,084 | ) |   | (6,012,058   | )
|Accumulated other
      comprehensive income (loss):  |   |            |   |   |              |  
|Foreign
      currency translation adjustment         |   | (304,595   | ) |   | (331,416     | )
|Total
      stockholders' deficit                     |   | (650,104   | ) |   | (528,358     | )
|                                                     
|                                                      | $ | 2,544,623  |   | $ | 2,335,610    |  

See accompanying notes to unaudited financial statements

4

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Encore Clean Energy, Inc.(Formerly Forge, Inc.) 
  Consolidated Statements of Operations and Deficit (unaudited) 
  (expressed in United States dollars)

Six months ended June 30, 2004 and June 30, 2003

|                             |   | Three Months Ended |   |   |            | Six Months Ended |  
|---------------------------- | - | ------------------ | - | - | ---------- | ---------------- | -
|                             |   | June 30,           |   |   | June 30,   |                  |  
|                             |   | 2004               |   |   | 2003       |                  |  
|                             |   |                    |   |   |            |                  |  
|Revenue                      | $ | 817,854            |   | $ | 582,022    |                  | $
|                             |   |                    |   |   |            |                  |  
|Cost of revenue              |   | (680,334           | ) |   | (395,357   | )                |  
|Gross profit                 |   | 137,520            |   |   | 186,665    |                  |  
|                             |   |                    |   |   |            |                  |  
|Operating expenses:          |   |                    |   |   |            |                  |  
|Depreciation                 |   | 8,272              |   |   | 5,876      |                  |  
|Salaries and fringe benefits |   | 167,199            |   |   | 160,423    |                  |  
|Legal and accounting         |   | 28,808             |   |   | 6,334      |                  |  
|Consulting fees and          |   |                    |   |   |            |                  |  
|computer services            |   | 48,744             |   |   | 101,430    |                  |  
|Phones and utilities         |   | 6,149              |   |   | 5,115      |                  |  
|Rent                         |   | 24,720             |   |   | 25,195     |                  |  
|Advertising and promotion    |   | 3,374              |   |   | 11,114     |                  |  
|Other selling, general       |   |                    |   |   |            |                  |  
|and administrative           |   | 16,262             |   |   | 17,066     |                  |  
|                             |   | 303,528            |   |   | 332,553    |                  |  
|                             |   |                    |   |   |            |                  |  
|Loss from operations         |   | (166,008           | ) |   | (145,888   | )                |  
|                             |   |                    |   |   |            |                  |  
|Other income (expenses):     |   |                    |   |   |            |                  |  
|Interest expense             |   | (35,431            | ) |   | (28,213    | )                |  
|                             |   |                    |   |   |            |                  |  
|Net loss                     |   | (201,439           | ) |   | (174,101   | )                |  
|                             |   |                    |   |   |            |                  |  
|Deficit, beginning of period |   | (6,260,645         | ) |   | (5,238,089 | )                |  
|                             |   |                    |   |   |            |                  |  
|Deficit, end of period       | $ | (6,462,084         | ) | $ | (5,412,190 | )                | $
|                             |   |                    |   |   |            |                  |  
|Net loss per common share,   |   |                    |   |   |            |                  |  
|basic and diluted            |   | (0.02              | ) |   | (0.33      | )                |  
|                             |   |                    |   |   |            |                  |  
|Weighted average common      |   |                    |   |   |            |                  |  
|shares outstanding, basic    |   |                    |   |   |            |                  |  
|and diluted                  |   | 12,806,775         |   |   | 519,751    |                  |  

See accompanying notes to the unaudited financial statements

5

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Encore Clean Energy, Inc.(Formerly Forge, Inc.) 
  Consolidated Statements of Cash Flows (unaudited) 
  (expressed in United States dollars)

June 30, 2004 and June 30, 2003

|                                                           |   | Six Months Ended |  
|---------------------------------------------------------- | - | ---------------- | -
|                                                           |   | June 30,         |  
|                                                           |   | 2004             |  
|                                                          
|Cash provided by (used in):                                |   |                  |  
|                                                          
|Operations:                                                |   |                  |  
|Net loss                                                   | $ | (450,026         | )
|Items not involving
      cash:                            |   |                  |  
|Depreciation                                               |   | 15,414           |  
|Stock based compensation                                   |   | 112,632          |  
|Changes in operating
      assets and liabilities:         |   |                  |  
|Change in accounts receivable                              |   | (26,265          | )
|Change in prepaid expenses                                 |   | 7,253            |  
|Change in accounts payable and accrued liabilities         |   | 16,473           |  
|Change in unearned revenue                                 |   | -                |  
|Change in accrued salaries                                 |   | -                |  
|Net cash used
      in operating activities                |   | (324,519         | )
|                                                          
|Cash flows used in investing activities:                   |   |                  |  
|Purchase of property
      and equipment                   |   | (2,417           | )
|Disposal of assets                                         |   | 659              |  
|Net cash used
      in investing activities                |   | (1,758           | )
|                                                          
|Cash flows from financing activities:                      |   |                  |  
|Proceeds from
      loans payable                          |   | 332,439          |  
|Repayment of lease
      obligation                        |   | (3,851           | )
|Repayment of bank
      indebtedness                       |   | (81,954          | )
|Proceeds from
      notes payable                          |   | -                |  
|Proceeds from (repayment of) advances from related parties |   | 67,652           |  
|Net cash provided
      by financing activities            |   | 314,286          |  
|                                                          
|Effect of exchange rate on cash                            |   | 11,656           |  
|Decrease in cash                                           |   | (335             | )
|                                                          
|Cash, beginning of period                                  |   | 335              |  
|                                                          
|Cash, end of period                                        | $ | -                |  
|                                                          
|Supplementary information:                                 |   |                  |  
|Interest paid                                              |   | 130,587          |  

See accompanying notes to the unaudited financial statements.

6

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ENCORE CLEAN ENERGY, INC. AND SUBSIDIARIESNOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 
  June 30, 2004

1.     The Company and Description of Business:

Encore Clean Energy, Inc. ("the Company") was originally incorporated
  on May 12, 1995 under the laws of Florida. On May 13, 2002, we changed our state
  of jurisdiction to Delaware. On December 1, 2003 we merged with our wholly-owned
  subsidiary, Cryotherm, under the laws of Delaware and changed our name to Encore
  Clean Energy, Inc.

Encore Clean Energy, Inc. is currently engaged in the following
  business:

|(a) | The business of creating and commercializing products
        that generate electricity without burning fossil fuels; and                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) | The provision of "permission-based" e-mail marketing
        and integrated advertising strategies services through our wholly owned
        subsidiaries Ignite Communications Inc. and Forge Marketing Inc.

2.Liquidity and Future Operations:

The Company incurred a net loss in the second quarter ending
  June 30, 2004 and has sustained negative cash flows from operations since its
  inception. At June 30, 2004, the Company has negative working capital of $2,072,961.
  The Company's ability to meet its obligations in the ordinary course of business
  is dependent upon its ability to increase profitable operations or to obtain
  additional funding through public or private equity financing, collaborative
  or other arrangements with corporate sources, or other sources. Management is
  seeking to increase revenues through continued marketing of its services; however
  additional funding will be required.

Management is working to obtain sufficient working capital
  from external sources in order to continue operations. There is however no assurance
  that the aforementioned events, including the receipt of additional funding,
  will occur and be successful.

7

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ENCORE CLEAN ENERGY, INC. AND SUBSIDIARIESNOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 
  June 30, 2004

3.Basis of Presentation:

The unaudited consolidated financial statements of the Company
  at June 30, 2004 and for the six month period then ended include the accounts
  of the Company and its wholly-owned subsidiaries and reflect all adjustments
  (consisting only of normal recurring adjustments) which are, in the opinion
  of management, necessary for a fair presentation of the financial position and
  operating results for the interim periods. Certain information and footnote
  disclosures normally included in financial statements prepared in accordance
  with generally accepted accounting principles have been condensed or omitted
  in these interim statements under the rules and regulations of the Securities
  and Exchange Commission ("SEC"). Accounting policies used in fiscal 2004 are
  consistent with those used in fiscal 2003. The results of operations for the
  six months ended June 30, 2004 are not necessarily indicative of the results
  for the entire fiscal year ending December 31, 2004. These interim financial
  statements should be read in conjunction with the financial statements for the
  fiscal year ended December 31, 2003 and the notes thereto.

4.     Foreign Currency:

The functional currency of the operations of the Company's
  wholly-owned Canadian operating subsidiaries is the Canadian dollar. Assets
  and liabilities measured in Canadian dollars are translated into United States
  dollars using exchange rates in effect at the balance sheets date with revenue
  and expense transactions translated using average exchange rates prevailing
  during the period. Exchange gains and losses arising on this translation are
  excluded from the determination of income and reported as foreign currency translation
  adjustment (which is included in the comprehensive income (loss)) in stockholders'
  equity.

5.     Net Income (Loss) Per Share:

The Company computes net income (loss) per share in accordance
  with SFAS No. 128, Earnings per Share, and SEC Staff Accounting Bulletin ("SAB")
  No. 98. Under the provisions of SFAS No. 128 and SAB No. 98, basic income (loss)
  per share is computed using the weighted average number of common stock outstanding
  during the periods, and gives retroactive effect to the shares issued on the
  recapitalization described in note 1. Diluted income (loss) per share is computed
  using the weighted average number of common and potentially dilutive common
  stock outstanding during the period. Basic and diluted net income (loss) per
  share are the same as any exercise of options or warrants would be anti-dilutive.

6.     Loan payable:

In April 2004 the Company secured debt financing in the aggregate
  amount of $374,870 from HSBC Bank Canada, in the form of a $37,490 line of credit
  (Canadian dollar denominated line of credit of Cdn $50,000) and a $337,380 working
  capital loan (Canadian dollar denominated loan of Cdn $450,000). The loan financing
  is denominated in Canadian dollars, secured by a general security agreement,
  and interest is charged at HSBC's prime rate of interest plus 1.50% .

8

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ENCORE CLEAN ENERGY, INC. AND SUBSIDIARIESNOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 
  June 30, 2004

7.     Comprehensive Income (Loss):

Effective January 1, 1999, the Company adopted the provisions of SFAS No. 130, "Reporting Comprehensive Income" SFAS No. 130 which establishes standards for reporting comprehensive income (loss) and its components in financial statements. Other
comprehensive income, as defined, includes all changes in equity (net assets) during a period from non-owner sources. Comprehensive loss for each of the periods presented is as follows:

|                                                                                        | Three Months
      Ended June
      30, 2004 | Three Months
      Ended June
      30, 2003 | Six Months
      Ended June
      30, 2004 | Six Months
      Ended June
      30, 2003
|--------------------------------------------------------------------------------------- | -------------------------------------------- | -------------------------------------------- | ------------------------------------------ | ------------------------------------------
|Net loss                                                                                | $201,439                                     | $174,101                                     | $450,026                                   | $173,295                                  
|Other comprehensive (income) /  loss:  
       Foreign currency translation  adjustment | 25,989                                       | 164,721                                      | (26,821)                                   | 263,911                                   
|Comprehensive loss                                                                      | $227,428                                     | $338,822                                     | $423,205                                   | $437,206                                  

9

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ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS
  OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Form 10-QSB constitute
  "forward-looking statements" within the meaning of Section 27A of the Securities
  Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities
  Exchange Act of 1934, as amended (the "Exchange Act"). These statements, identified
  by words such as "plan", "anticipate," "believe," "estimate," "should," "expect"
  and similar expressions include our expectations and objectives regarding our
  future financial position, operating results and business strategy. These statements
  reflect the current views of management with respect to future events and are
  subject to risks, uncertainties and other factors that may cause our actual
  results, performance or achievements, or industry results, to be materially
  different from those described in the forward-looking statements. Such risks
  and uncertainties include those set forth under this Item 2. "Management's Discussion
  and Analysis or Plan of Operation" and elsewhere in this Form 10-QSB. We do
  not intend to update the forward-looking information to reflect actual results
  or changes in the factors affecting such forward-looking information. We advise
  you to carefully review the reports and documents we file from time to time
  with the Securities and Exchange Commission ("SEC"), particularly our annual
  reports on Form 10-KSB, our quarterly reports on Form 10-QSB and our current
  reports on Form 8-K.

As used in this Quarterly Report, the terms "we", "us", "our",
  "Company" and "Encore" mean Encore Clean Energy, Inc. unless otherwise indicated.
  All dollar amounts in this Quarterly Report are in U.S. dollars unless otherwise
  stated.

INTRODUCTION

During the fourth quarter of our 2003 fiscal year, we acquired
  Cryotherm, Inc. ("Cryotherm"), a corporation that was in the business of creating
  and commercializing products that generate electricity without the burning of
  fossil fuels. We have since merged with Cryotherm under the laws of Delaware
  and changed our name from Forge, Inc. to Encore Clean Energy, Inc.

We are currently engaged in the following businesses:

|(a) | The Encore Business: The Encore Business
        involves developing and commercializing proprietary "clean-energy" technologies
        that we have acquired through our acquisition of Cryotherm. Our plan for
        this segment of our business involves creating products that will be targeted
        at creating lower-cost, cleaner ways to generate electricity without the
        burning of fossil fuels. Initially, we will focus our efforts on four
        primary products: a Drum Jet Turbine, a Waste Heat Recovery Unit, a Vertical
        Axis Wind Turbine and the TurboFlux Disk Turbine (collectively, the "Encore
        Products"); and
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) | The Forge/Ignite Business: Prior to our
        acquisition of Cryotherm, our primary business was the Forge/Ignite Business
        of providing "permission-based" email marketing and integrated advertising
        services. We continue to carry on this segment of our business through
        our wholly owned subsidiaries, Ignite Communications Inc. ("Ignite") and
        Forge Marketing Inc. ("Forge Marketing").                                                                                                                                                                                                                                      

10

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PLAN OF OPERATIONS

Our plan of operations for the next twelve months involves the following:

|1. | We will continue the research and development
        of our Encore Products. Initially we plan to focus on the development
        and commercialization of the Waste Heat Recovery Unit, the Drum Jet Turbine
        and the Vertical Axis Wind Turbine. In pursuit of this we:                                                                                                                                                       
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|2. | We also plan to continue operating our
        advertising business through our wholly owned subsidiaries, Ignite and
        Forge Marketing. We will continue to seek new clients for our integrated
        advertising strategies and "permission-based" electronic direct marketing
        services and to further explore how we can better service our existing
        clients. In pursuit of this, we plan to do the following:
|  
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   | (f)                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   | (g)                                                                                                                                                                                                                                                                                                                                                                                                                                      

We anticipate spending approximately $5,000,000 in pursuing
  our plan of operations over the next twelve months. It is anticipated that the
  Encore Business will not generate any significant revenues over the next twelve
  months and we do not have sufficient financial resources to fund the development
  of the Encore Products. Accordingly, we require substantial financing in order
  to fund our plan of operations.

11

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As discussed below under Item 5 of Part II of this Quarterly
  Report on Form 10-QSB, on April 14, 2004, our wholly owned subsidiary, Ignite,
  obtained bank debt financing in the aggregate amount of $374,870 ($500,000 CDN)
  (the "Debt Financing") from HSBC Bank Canada ("HSBC"), in the form of a $37,490
  ($50,000 CDN) line of credit and a $337,380 ($450,000 CDN) working capital loan.
  The Debt Financing was advanced in Canadian currency and has been converted
  to U.S. Funds for the purposes of this Quarterly Report on Form 10-QSB at the
  rate of 1.3338, the Company's rate of exchange as on June 30, 2004. Interest
  is charged on the Debt Financing at HSBC's prime rate of interest plus 1.50%
  . The funds obtained through the Debt Financing are being used by us as working
  capital.

We anticipate that any additional financing will likely be
  in the form of equity financing as substantial additional debt financing is
  unlikely to be feasible at this stage of our business.

Currently, we do not have any additional financing arrangements
  in place and there is no assurance that we will be able to achieve sufficient
  financing required to continue with the development of our Encore Products.
  If we do not obtain the necessary financing, then our plan of operations will
  be scaled back according to the amount of funds available. An inability to raise
  the necessary financing will severely restrict our ability to complete the development
  and commercialization of our Encore Products. In the event that we are unable
  to develop and commercialize our Encore Products, we intend to focus on the
  Forge/Ignite Business.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
  AND RESULTS OF OPERATIONS

Our acquisition of Cryotherm was completed on September 30,
  2003. This acquisition has been treated by us for accounting purposes as an
  acquisition of Cryotherm's net assets. As a result, our historical financial
  statements up to September 30, 2003 reflect the results of operations solely
  for the Forge/Ignite Business to that date. Commencing October 1, 2003, our
  financial statements reflect our combined operations with Cryotherm.

With respect to the risks and uncertainties associated with
  our businesses, we advise readers to carefully review the Management's Discussion
  and Analysis section of our Annual Report on Form 10-KSB for the year ended
  December 31, 2003, filed with the SEC on May 17, 2004.

RESULTS OF OPERATIONS

Second Quarter and Six Months Summary

|                   |   | Second Quarter Ended
      June 30 |   |   |          | Six Months Ended
      June 30 | 
|------------------ | - | ---------------------------------- | - | - | -------- | ------------------------------ | 
|                   |   |                                    |   |   |          |                                | 
|                   |   | 2004                               |   |   | 2003     |                                | 
|Revenue            | $ | 817,854                            |   | $ | 582,022  |                                | 
|Cost of Revenue    |   | (680,334                           | ) |   | (395,357 | )                              | 
|Operating Expenses |   | (303,528                           | ) |   | (332,553 | )                              | 
|Net Income (Loss)  | $ | (201,439                           | ) | $ | (174,101 | )                              | 

Revenue

For the last fiscal quarter, revenues were generated solely
  from the Forge/Ignite Business. We did not earn revenues from our Encore Business
  and there is no assurance that we will be able to do so in the future.

12

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The increase in our revenue over our results for the second
  fiscal quarter of 2003 is primarily due to the addition of five new clients
  and budget increases with two existing clients during the spring/summer months.

Revenues for the Forge/Ignite Business are earned by delivering
  online direct marketing, promotional, and informational offers and by developing
  and implementing integrated marketing and advertising strategies. We charge
  our advertisers based upon a number of criteria including offers delivered,
  qualified leads generated, online transactions executed and marketing services
  performed.

We believe that our revenues will be subject to seasonal fluctuations
  as a result of general patterns of retail advertising, which are typically higher
  during the second and fourth calendar quarters. In addition, expenditures by
  advertisers tend to be cyclical, reflecting overall economic conditions and
  consumer buying patterns.

Cost of Revenue

Cost of revenue for the Forge/Ignite Business represents the
  cost of advertising purchased for clients. The increase in cost of revenue over
  our results for the second fiscal quarter of 2003 is a result of the corresponding
  increase in our revenue.

Revenue for the Forge/Ignite Business consists of the gross
  value of our billings to clients and includes the price of the advertising that
  we purchase from offline and online suppliers. Under marketing services contracts,
  we recognize the cost of the advertising we purchase for our clients as an expense
  and the payments we receive from our clients for this advertising as revenue.
  Under these arrangements, we are ultimately responsible for payment to suppliers
  for the cost of the advertising that we purchase.

Operating Expenses

The overall increase to our operating expenses during the
  six months ended June 30, 2004 compared to the same period ended June 30, 2003
  is primarily attributable to the additional costs associated with the development
  and commercialization of our clean energy technologies for the Encore Business.
  The major components of our operating expenses are outlined in the table below:

|                                       | Second Quarter Ended
      June 30 |  | Six Months Ended
      June 30 | 
|-------------------------------------- | ---------------------------------- |  | ------------------------------ | 
|                                       |                                    |  |                                | 
|                                       | 2004                               |  | 2003                           | 
|                                       |                                    |  |                                | 
|Salaries and Fringe Benefits           | $167,199                           |  | $160,423                       | 
|                                       |                                    |  |                                | 
|Legal and Accounting Expenses          | 28,808                             |  | 6,334                          | 
|                                       |                                    |  |                                | 
|Consulting Fees and Computers Services | 48,744                             |  | 101,430                        | 
|                                       |                                    |  |                                | 
|Rent                                   | 24,720                             |  | 25,195                         | 

The increase in salary costs during the six months ended June
  30, 2004 compared to the same period in 2003 is primarily due to the addition
  of a staff member and various employee raises.

The increase in legal and accounting expenses during the three
  and six month periods ended June 30, 2004 compared to the same periods in 2003
  relate to the completion of our obligations with respect to the acquisition
  of Cryotherm as well as an increased need for legal and patent advice with respect
  to the Encore Business.

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The increase in consulting fees and computer services for the six months ended June 30, 2004 compared to the six months ended June 30, 2003 is primarily the result of additional consulting costs associated with the development of our clean energy
technologies for the Encore Business.

The increase in rent during the six months ended June 30, 2004 compared to the same period in 2003 is a result of our moving business offices early in 2003.

Interest Expenses

|                  | Second Quarter Ended
      June 30 |  | Six Months Ended
      June 30 | 
|----------------- | ---------------------------------- |  | ------------------------------ | 
|                  |                                    |  |                                | 
|                  | 2004                               |  | 2003                           | 
|Interest Expenses | 35,431                             |  | 28,213                         | 

The increase in interest expenses during the three and six
  month periods ended June 30, 2004 as compared to the same periods in 2003 is
  primarily the result of the Debt Financing acquired from HSBC as discussed below
  under Item 5 of Part II of this Quarterly Report on Form 10-QSB and from interest
  and from finance charges related to advances from related parties and loans
  repaid during the period.

LIQUIDITY AND CAPITAL RESOURCES

Working Capital

|                        |                  |   |                      |   | Percentage            | 
|----------------------- | ---------------- | - | -------------------- | - | --------------------- | 
|                        | At June 30, 2004 |   | At December 31, 2003 |   | Increase / (Decrease) | 
|Current Assets          | $152,467         |   | $119,284             |   | 27.8%                 | 
|Current Liabilities     | (2,225,428       | ) | (1,962,321           | ) | 13.4%                 | 
|Working Capital Deficit | $(2,072,961      | ) | $(1,843,037          | ) | 12.5%                 | 

The increase in our current assets is primarily attributable
  to an increase in accounts receivable

The increase in our working capital deficit is primarily attributable
  to the increase in our current liabilities. As discussed below under Item 5
  of Part II of this Quarterly Report on Form 10-QSB, on April 14, 2004, our wholly
  owned subsidiary, Ignite, obtained debt financing in the aggregate amount of
  $374,870. This debt financing consists of a line of credit and a working capital
  loan. The working capital loan is repayable upon demand, however HSBC has allowed
  us to amortize the schedule of repayments over a period of 5 years. According
  to this schedule, of the approximately $332,439 still outstanding, approximately
  $61,380 is payable within the year. However, because HSBC may demand repayment
  in full at any time, the full amount of the debt financing has been classified
  as a current liability.

|Cash Flows                                    |                          |   |           |  
|--------------------------------------------- | ------------------------ | - | --------- | -
|                                              | Six Months Ended June 30 |  
|                                              | 2004                     |   | 2003      |  
|Net Cash from (used in) Operating Activities  | $(324,519                | ) | $(169,749 | )
|Net Cash from (used in) Investing Activities  | (1,758                   | ) | (8,988    | )
|Net Cash from (used in) Financing Activities  | 314,286                  |   | 192,846   |  
|Net Increase (decrease) in Cash During Period | $(335                    | ) | $(27,479  | )

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Cash provided by financing activities for the quarter consisted
  of proceeds from the Debt Financing acquired from HSBC, notes payable and advances
  from related parties. These funds were utilized in their entirety as working
  capital.

We anticipate that we will require financing in the amount
  of $5,000,000 in order to fund our plan of operations over the next twelve months,
  as discussed above under "Plan of Operations." In addition, we anticipate that
  we will continue to require additional financing to fund the Forge/Ignite Business
  which continues to consume more cash in operating activities than is generated.
  We plan to pursue additional bank debt and equity financings through private
  placements of our common stock or common stock and share purchase warrants in
  order to raise the funds necessary to enable us to pursue our plan of operations
  for the next twelve months. We do not have any arrangements in place for equity
  financing and there is no assurance that any equity financing will be achieved.
  If equity financing is achieved, then it is anticipated that existing shareholders
  will suffer dilution.

In addition to the Debt Financing described below under Item
  5 of Part II of this Quarterly Report on Form 10-QSB, we have sustained our
  operations to date with advances by one of our principal stockholders and these
  funds have been applied to finance our current operations. Our ability to meet
  our current obligations is dependent upon continued advances from this stockholder,
  upon our ability to increase our revenues while maintaining expenses and our
  ability to achieve additional financing. If we are unable to meet our current
  obligations, we may be forced to significantly scale back our business operations
  with the result that our ability to earn revenues and achieve profitability
  may be adversely affected.

OFF-BALANCE SHEET ARRANGEMENTS

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

ITEM 3.     CONTROLS AND PROCEDURES.

As required by Rule 13a-15 under the Exchange Act, we carried
  out an evaluation of the effectiveness of the design and operation of our disclosure
  controls and procedures as of June 30, 2004, being the date of our most recently
  completed fiscal quarter. This evaluation was carried out under the supervision
  and with the participation of our Chief Executive Officer and Chief Financial
  Officer, Mr. Daniel Hunter. Based upon that evaluation, our Chief Executive
  Officer and Chief Financial Officer concluded that our disclosure controls and
  procedures are effective in timely alerting management to material information
  relating to us required to be included in our periodic SEC filings. There have
  been no significant changes in our internal controls or in other factors that
  could significantly affect internal controls subsequent to the date we carried
  out our evaluation.

Disclosure controls and procedures are controls and other
  procedures that are designed to ensure that information required to be disclosed
  our reports filed or submitted under the Exchange Act is recorded, processed,
  summarized and reported, within the time periods specified in the Securities
  and Exchange Commission's rules and forms. Disclosure controls and procedures
  include, without limitation, controls and procedures designed to ensure that
  information required to be disclosed in our reports filed under the Exchange
  Act is accumulated and communicated to management, including our Chief Executive
  Officer and Chief Financial Officer, to allow timely decisions regarding required
  disclosure.

During our most recently completed fiscal quarter ended June
  30, 2004, there were no changes in our internal control over financial reporting
  that have materially affected, or are reasonably likely to affect, our internal
  control over financial reporting.

The term "internal control over financial reporting" is defined
  as a process designed by, or under the supervision of, the registrant's principal
  executive and principal financial officers, or persons performing

15

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similar functions, and effected by the registrant's board
  of directors, management and other personnel, to provide reasonable assurance
  regarding the reliability of financial reporting and the preparation of financial
  statements for external purposes in accordance with generally accepted accounting
  principles and includes those policies and procedures that:

| | (1) | Pertain to the maintenance of records that in reasonable
        detail accurately and fairly reflect the transactions and dispositions
        of the assets of the registrant;                                                                                                                                                                                                 
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (2) | Provide reasonable assurance that transactions are
        recorded as necessary to permit preparation of financial statements in
        accordance with generally accepted accounting principles, and that receipts
        and expenditures of the registrant are being made only in accordance with
        authorizations of management and directors of the registrant; and
|
| | (3) | Provide reasonable assurance regarding prevention
        or timely detection of unauthorized acquisition, use or disposition of
        the registrant's assets that could have a material effect on the financial
        statements.                                                                                                                                          

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PART II - OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS.

None.

ITEM 2.     CHANGES IN SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3.     DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4.     SUBMISSION OF MATTERS TO VOTE OF SECURITY
  HOLDERS.

None.

ITEM 5.     OTHER INFORMATION.

Debt Financing from HSBC Bank Canada

On April 14, 2004, our wholly owned subsidiary, Ignite, obtained bank debt financing in the aggregate amount of $374,870 ($500,000 CDN) (the "Debt Financing") from HSBC Bank Canada ("HSBC") in the form of a $37,490 ($50,000 CDN) line of credit and a
$337,380 ($450,000 CDN) working capital loan. The Debt Financing was advanced in Canadian currency and has been converted to U.S. Funds for the purposes of this Quarterly Report on Form 10-QSB at the rate of 1.3338, the Company's rate of exchange as
on June 30, 2004. The working capital loan is repayable upon demand, however HSBC has allowed us to amortize the schedule of repayments over a 5 year period. The Debt Financing earns interest at the rate of HSBC's prime rate of interest plus 1.50% .
The funds obtained through the Debt Financing are being used in their entirety as working capital.

Under the terms and conditions of the Debt Financing:

- Ignite is required to obtain the prior written consent
      of HSBC in order to make any subsequent inter-company loans or to declare
      or pay dividends or other distributions to Encore.
- Ignite has executed a general security agreement granting
      HSBC a security interest in all of its present and after acquired personal
      property, including inventory, equipment and accounts receivable (collectively,
      the "Collateral"). The security agreement prevents Ignite from selling,
      transferring, assigning, leasing or encumbering the Collateral, other than
      sales or leases of inventory made in the ordinary course of business, without
      the prior written consent of HSBC.
- Certain of our directors, officers and management personnel
      and their family members have executed personal guarantees securing the
      Debt Facilities.

Encore is not a direct party to the Debt Financing arrangement
  with HSBC.

A copy of the credit facilities agreement and the general
  security agreement are attached as exhibits to this Quarterly Report on Form
  10-QSB.

Proposed Business Combination

We are currently in discussions with a California based company
  regarding a possible business combination. The subject of these negotiations
  is a company engaged in the business of providing consulting and engineering
  services with respect to alternative methods of electricity generation. If an

17

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agreement is reached with respect to the proposed business combination, it is expected that we will issue a substantial number of shares in our common stock in exchange for shares in the common stock of the subject company. There is no assurance
that an agreement will be reached.

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K.

(a)     Exhibits and Index of Exhibits Required
  By Item 601 of Regulation S-B.

|Exhibit Number |  | Description of Exhibit                                                                                                                                                                    
|-------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |  |                                                                                                                                                                                           
|3.1            |  | Articles of Incorporation and Bylaws, as amended. (1)                                                                                                                                     
|              
|10.1           |  | Exclusive License Agreement between Cryotherm, Inc. and Robert D. Hunt.
      (1)                                                                                                         
|              
|10.2           |  | Letter Joint Projects, License and Consulting Agreement between Cryotherm,
      Inc. and Centripetal Dynamics, Inc. (1)                                                                  
|              
|10.3           |  | Letter Agreement between Encore Clean Energy, Inc. and Centripetal Dynamics,
      Inc. extending the terms of the Joint Projects, License and Consulting Agreement.
      (1)            
|              
|10.4           |  | Purchase Agreement and Plan of Reorganization dated July 28, 2003 between
      Forge, Inc., Cryotherm, Inc. and the major shareholders of Cryotherm, Inc.
      (2)                      
|              
|10.5           |  | Amendment to Purchase Agreement and Plan of Reorganization dated August
      25, 2003 between Forge, Inc., Cryotherm, Inc. and the major shareholders
      of Cryotherm, Inc. (3)       
|              
|10.6           |  | Line of Credit By Way of Current Account Overdraft
      Agreement dated April 14, 2004 between HSBC Bank Canada and Ignite Communications
      Inc.                                     
|              
|10.7           |  | Demand Promissory Note issued by Ignite Communications
      Inc. in favor of HSBC Bank Canada.                                                                                           
|              
|10.8           |  | General Security Agreement dated April 14,
      2004 between HSBC Bank Canada and Ignite Communications Inc.                                                                             
|              
|14.1           |  | Code of Ethics. (1)                                                                                                                                                                       
|              
|21.1           |  | List of Subsidiaries. (1)                                                                                                                                                                 
|              
|31.1           |  | Certification of Chief Executive Officer and
      Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act
      of 2002.                                               
|              
|32.1           |  | Certification of Chief Executive Officer and
      Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
      to Section 906 of the Sarbanes-Oxley Act of 2002.
|              

|(1) | Previously filed as exhibits to our Annual Report on Form 10-KSB, filed
      with the SEC on May 17, 2004, except for our bylaws, which were previously
      filed as an exhibit to our Current Report on Form 8-K, filed with the SEC
      on May 13, 2002.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) | Previously filed as an exhibit to our Current Report on Form 8-K filed
      with the SEC on August 1, 2003.                                                                                                                                                   
|   
|(3) | Previously filed as an exhibit to our Current Report on Form 8-K filed
      with the SEC on October 15, 2003.                                                                                                                                                 

(b)     Current Reports On Form 8-K.

We have not filed any Current Reports on Form 8-K during our
  fiscal quarter ended June 30, 2004 and we have not filed any Current Reports
  on Form 8-K since June 30, 2004.

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SIGNATURES

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

|                       |     | ENCORE CLEAN ENERGY, INC.                                                                           
|---------------------- | --- | ----------------------------------------------------------------------------------------------------
|                       |     |                                                                                                     
|Dated: August 12, 2004 | By: | /s/ Daniel HunterDaniel Hunter 
        Chief Executive Officer and 
        Chief Financial Officer



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