---

**UNITED STATES
  SECURITIES AND EXCHANGE COMMISSION**
  Washington, D.C. 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, 2005

 ̈ 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. EmployerIncorporation 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. Yes
  x   No  ̈

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

State the number of shares outstanding of each of the issuer's
  classes of common equity, as of the latest practicable date: 14,406,975 shares
  of common stock, $0.001 par value per share, issued and outstanding as of
  August 23, 2005.

Transitional Small Business Disclosure Format (check one):
  Yes  ̈ Nox

1

---

|ENCORE CLEAN ENERGY, INC. AND SUBSIDIARIES
|------------------------------------------
|FORM 10-QSB                               
|QUARTERLY PERIOD ENDED JUNE 30, 2005      
|INDEX                                     

|           |                                                                                                                              | Page
|---------- | ---------------------------------------------------------------------------------------------------------------------------- | ----
|PART I -   | FINANCIAL INFORMATION                                                                                                        |     
|           |                                                                                                                              |     
|Item 1 -   | Consolidated
      Financial Statements For the Three and Six Months Ended June 30, 2005 and
      June 30, 2004 (unaudited) | 3   
|           |                                                                                                                              |     
|Item 2 -   | Management's
      Discussion and Analysis or Plan of Operation                                                              | 4   
|           |                                                                                                                              |     
|Item 3 -   | Controls and
      Procedures                                                                                                | 13  
|           |                                                                                                                              |     
|PART II -  | OTHER INFORMATION                                                                                                            |     
|           |                                                                                                                              |     
|Item 1 -   | Legal Proceedings                                                                                                            | 14  
|Item 2 -   | Unregistered Sales of Equity
      Securities and Use of Proceeds                                                            | 14  
|Item 3 -   | Defaults Upon
      Senior Securities                                                                                        | 15  
|Item 4 -   | Submission of Matters to a Vote
      of Security Holders                                                                    | 15  
|Item 5 -   | Other Information                                                                                                            | 15  
|Item 6 -   | Exhibits and Reports on Form
      8-K                                                                                       | 16  
|           |                                                                                                                              |     
|Signatures | 18                                                                                                                          

2

---

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

3

---

|Encore Clean Energy, Inc.              
|---------------------------------------
|Consolidated Balance Sheets (unaudited)
|(expressed in United States dollars)   

|                                                                            |   | June 30,    |  
|--------------------------------------------------------------------------- | - | ----------- | -
|                                                                            |   | 2005        |  
|                                                                            |   |             |  
|                                                                            |   |             |  
|Assets                                                                      |   |             |  
|                                                                            |   |             |  
|Current assets:                                                             |   |             |  
|Cash and cash equivalents                                                   | $ | 14,535      |  
|Investment                                                                  |   | 30,518      |  
|Accounts receivable                                                         |   | 185,484     |  
|Prepaid expenses                                                            |   | 17,469      |  
|Deferred tax asset less valuation allowance of $(3,118,434)                 |   | -           |  
|                                                                            |   | 248,006     |  
|                                                                            |   |             |  
|Property and equipment, less accumulated depreciation                       |   | 60,460      |  
|                                                                            |   |             |  
|TOTAL ASSETS                                                                | $ | 308,466     |  
|                                                                            |   |             |  
|                                                                            |   |             |  
|Liabilities and Deficiency in Assets                                        |   |             |  
|                                                                            |   |             |  
|Current liabilities:                                                        |   |             |  
|Bank indebtedness                                                           | $ | 25,617      |  
|Accounts payable and accrued
      liabilities                              |   | 2,026,477   |  
|Credit facility                                                             |   | 377,744     |  
|Due to related parties -
      current portion                              |   | 1,016,623   |  
|Capital lease obligation
      - current portion                            |   | 6,697       |  
|                                                                            |   |             |  
|                                                                            |   | 3,453,157   |  
|                                                                            |   |             |  
|Due to related parties                                                      |   | 1,246,918   |  
|Minority interest                                                           |   | 100,000     |  
|Capital lease obligations                                                   |   | 2,662       |  
|                                                                            |   |             |  
|Total liabilities                                                           |   | 4,802,737   |  
|                                                                            |   |             |  
|                                                                            |   |             |  
|Deficiency in assets:                                                       |   |             |  
|Common stock,
      .001 par value; 18,000,000 share authorized; 13,586,975 |   |             |  
|issued
      and outstanding                                                |   | 13,587      |  
|Share subscription
      received in advance                                |   | 150,000     |  
|Additional paid-in capital                                                  |   | 6,235,201   |  
|Deficit                                                                     |   | (10,441,765 | )
|Accumulated other comprehensive loss                                        |   | (451,294    | )
|Total deficiency in assets                                                  |   | (4,494,271  | )
|                                                                            |   |             |  
|TOTAL LIABILITIES AND DEFICIENCY IN ASSETS                                  | $ | 308,466     |  

See accompanying notes to unaudited consolidated financial statements

F-1

---

|Encore Clean Energy, Inc.                        
|-------------------------------------------------
|consolidated Statements of Operations (unaudited)
|(expressed in United States dollars)             

|                                   |   | Three Months Ended |   |   | Six Months Ended |  
|---------------------------------- | - | ------------------ | - | - | ---------------- | -
|                                   |   | June 30,           |   |   | June 30,         |  
|                                   |   | 2005               |   |   | 2004             |  
|                                   |   |                    |   |   |                  |  
|                                   |   |                    |   |   |                  |  
|Revenue                            | $ | 853,326            |   | $ | 817,854          |  
|                                   |   |                    |   |   |                  |  
|Cost of revenue                    |   | 645,645            |   |   | 680,334          |  
|                                   |   |                    |   |   |                  |  
|Gross profit                       |   | 207,681            |   |   | 137,520          |  
|                                   |   |                    |   |   |                  |  
|Operating expenses:                |   |                    |   |   |                  |  
|Depreciation                       |   | 2,973              |   |   | 8,272            |  
|Salaries and fringe benefits       |   | 148,760            |   |   | 167,199          |  
|Legal and accounting               |   | 57,116             |   |   | 28,808           |  
|Consulting fees and                |   |                    |   |   |                  |  
|computer
      services            |   | 169,070            |   |   | 108,744          |  
|Phones and utilities               |   | 8,042              |   |   | 6,149            |  
|Rent                               |   | 28,572             |   |   | 24,720           |  
|Advertising and promotion          |   | 91,775             |   |   | 3,374            |  
|Other selling, general             |   |                    |   |   |                  |  
|and
      administrative           |   | 39,951             |   |   | 16,263           |  
|                                   |   | 546,259            |   |   | 363,529          |  
|                                   |   |                    |   |   |                  |  
|Loss from operations               |   | (338,578           | ) |   | (226,009         | )
|                                   |   |                    |   |   |                  |  
|Interest expense                   |   | (182,676           | ) |   | (35,431          | )
|                                   |   |                    |   |   |                  |  
|Loss before taxes                  |   | (521,254           | ) |   | (261,440         | )
|                                   |   |                    |   |   |                  |  
|Provision for income
      taxes   |   | -                  |   |   | -                |  
|                                   |   |                    |   |   |                  |  
|Net loss                           |   | (521,254           | ) |   | (261,440         | )
|                                   |   |                    |   |   |                  |  
|Deficit, beginning
      of period |   | (9,920,511         | ) |   | (6,460,644       | )
|                                   |   |                    |   |   |                  |  
|Deficit, end of period             | $ | (10,441,765        | ) | $ | (6,722,084       | )
|                                   |   |                    |   |   |                  |  
|                                   |   |                    |   |   |                  |  
|Net loss per common share,         |   |                    |   |   |                  |  
|basic and diluted                  | $ | (0.04              | ) | $ | (0.02            | )
|                                   |   |                    |   |   |                  |  
|                                   |   |                    |   |   |                  |  
|Weighted average common            |   |                    |   |   |                  |  
|shares outstanding, basic          |   |                    |   |   |                  |  
|and diluted                        |   | 12,749,397         |   |   | 12,749,397       |  

See accompanying notes to the unaudited consolidated financial
  statements

F-2

---

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

|                                                                      |   | Six Months Ended |  
|--------------------------------------------------------------------- | - | ---------------- | -
|                                                                      |   | June 30,         |  
|                                                                      |   | 2005             |  
|                                                                      |   |                  |  
|Cash flows from operating activities:                                 |   |                  |  
|                                                                      |   |                  |  
|Net loss                                                              | $ | (909,812         | )
|Adjustments
      to reconcile net loss to net cash used in operating |   |                  |  
|activities:                                                           |   |                  |  
|Depreciation                                                          |   | 8,817            |  
|Loss on settlement of accounts receivable                             |   | 3,891            |  
|Stock based compensation                                              |   | 21,678           |  
|Common stock issued for services                                      |   | 45,050           |  
|Accrual of consulting fees                                            |   | 120,000          |  
|Changes in operating assets
      and liabilities:                    |   |                  |  
|(Increase) in accounts receivable                                     |   | (89,795          | )
|Decrease in prepaid expenses                                          |   | (3,981           | )
|Increase in accounts payable and accrued liabilities                  |   | 230,536          |  
|Net cash used in operating
      activities                           |   | (573,616         | )
|                                                                      |   |                  |  
|Cash flows used in investing activities:                              |   |                  |  
|Purchase
      of property and equipment                              |   | (1,701           | )
|Disposal of assets                                                    |   | -                |  
|Net cash
      used in investing activities                           |   | (1,701           | )
|                                                                      |   |                  |  
|Cash flows from financing activities:                                 |   |                  |  
|Principal payments on obligations
      under capital leases          |   | (4,070           | )
|Proceeds
      from (repayment of) bank indebtedness                  |   | 5,350            |  
|Proceeds from credit facility                                         |   | 12,909           |  
|Proceeds
      from notes payable                                     |   | -                |  
|Cash received from issuance
      of LLC subsidiary units to          |   |                  |  
|minority
      shareholders                                           |   | 100,000          |  
|Share subscription received
      in advance                          |   | 150,000          |  
|Advances from related
      parties, net                              |   | 321,099          |  
|Net cash provided by financing
      activities                       |   | 585,288          |  
|                                                                      |   |                  |  
|Effect of exchange
      rate on cash                                 |   | 4,564            |  
|Increase (decrease) in cash                                           |   | 14,535           |  
|                                                                      |   |                  |  
|Cash, beginning of period                                             |   | -                |  
|                                                                      |   |                  |  
|Cash, end of period                                                   | $ | 14,535           |  
|                                                                      |   |                  |  
|Supplementary information:                                            |   |                  |  
|Interest paid                                                         | $ | 201,165          |  
|Income taxes
      paid                                               |   | -                |  
|Investment received on settlement
      of accounts receivable        |   | 30,226           |  
|200,000 shares of common
      stock issued for $50,000 in services   |   | 45,050           |  

See accompanying notes to the unaudited consolidated financial
  statements.

F-3

---

|ENCORE CLEAN ENERGY, INC. AND SUBSIDIARIES          
|----------------------------------------------------
|NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
|Expressed in United States Dollars                  
|June 30, 2005                                       

1. The Company and Description of Business:

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

The Company 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 its wholly-owned subsidiary
        Ignite Communications Inc.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

2. Liquidity and Future Operations:

The Company incurred a net loss in the quarter ending June
  30, 2005, and has sustained negative cash flows from operations since its inception.
  At June 30, 2005, the Company has negative working capital of $3,205,151.
  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 which raises substantial doubt about its ability
  to continue as a going concern. Failure to generate sufficient cash flow will
  require the Company to amend or reduce operations.

3. Basis of Presentation:

The unaudited consolidated financial statements of the Company
  at June 30, 2005, 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 conformity
  with generally accepted accounting principles in the United States of America
  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 2005 are consistent with those used in fiscal 2004. The results
  of operations for the six months ended June 30, 2005, are not necessarily indicative
  of the results for the entire fiscal year ending December 31, 2005. These interim
  financial statements should be read in conjunction with the financial statements
  for the fiscal year ended December 31, 2004, and the notes thereto included
  in the Companys Annual Report on Form 10-KSB.

F-4

---

|ENCORE CLEAN ENERGY, INC. AND SUBSIDIARIES          
|----------------------------------------------------
|NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
|Expressed in United States Dollars                  
|June 30, 2005                                       

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 sheet 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 accumulated other comprehensive loss) in stockholders'
  deficit.

5. Net Loss Per Share:

Basic net loss per share is computed using the weighted average
  number of common stock outstanding during the periods. Diluted net 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 loss
  per share are the same as any exercise of all outstanding options or warrants
  would be anti-dilutive.

6. Related Party

During the six months ended June 30, 2005, the Company obtained
  financing from related parties totaling $255,545 with no fixed terms of
  repayment.

7. Investment

During the period the Company received 149,660 shares of a
  publicly traded company in settlement of an accounts receivable debt. The Company
  has recorded this investment as an available-for-sale security.

F-5

---

|ENCORE CLEAN ENERGY, INC. AND SUBSIDIARIES          
|----------------------------------------------------
|NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
|Expressed in United States Dollars                  
|June 30, 2005                                       

8. Comprehensive Income (Loss):

Comprehensive loss for each of the periods presented is as follows:

Three Months 
        Ended June 
        30, 2005
      Three Months 
        Ended June 
        30, 2004
      Six Months 
        Ended June 
        30, 2005
      Six Months 
        Ended June 30, 
        2004Net loss
      $ (521,254)
      $ (261,440)
      $ (909,812)
      $ (570,026)Other comprehensive income/ 
        (loss): Foreign currency translation 
        adjustment
      23,320Comprehensive loss
      $ (497,934)
      $ (287,429)
      $ (875,295)
      $(543,205)


9. Segmented Information

The Company has one reportable operating segment, advertising
  services and commercializing products that generate electricity without burning
  fossil fuels, and the chief operating decision maker makes decisions about allocating
  resources based on each operating segment. All of the Companys sales relate
  to the advertising services operating segment and are to Canadian customers.
  Substantially all of the Companys assets are located in Canada.

F-6

---

|ENCORE CLEAN ENERGY, INC. AND SUBSIDIARIES          
|----------------------------------------------------
|NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
|Expressed in United States Dollars                  
|June 30, 2005                                       

10. Subsequent Events

On July 5, 2005, the Company issued a 6% convertible note
  for $110,000 maturing in June 30, 2010. The unpaid principal bears no interest
  until June 30, 2007. Conversion feature is allowable at any time into common
  stock at a share price of $0.10. On July 6, 2005, the Company converted
  291,000 shares of common stock for a value of $66,000 at a share price of
  $0.10.

F-7

---

**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". 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 (the 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

The following discussion and analysis summarizes our plan of operation for
the next 12 months, our results of operations for the six months ended June 30,
2005 and changes in our financial condition from December 31, 2004. This
discussion should be read in conjunction with the Managements Discussion and
Analysis or Plan of Operation included in our Annual Report on Form 10-KSB for
the year ended December 31, 2004.

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.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                          
|(b) | The Ignite Business: Prior to our acquisition
        of Cryotherm, our primary business was the 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 subsidiary, Ignite Communications Inc. (Ignite).                                                           

PLAN OF OPERATION

Our plan of operation for the next twelve months includes the
following elements:

|1. |     | We will continue the research and development of our Encore products.
      Initially we plan to focus on the continuing development and commercialization
      of the HeatSeekerTMwaste heat recovery unit, the EliminatorTMRankine Cycle liquid pump elimination process, the SideWinderTMVAWT, the RiverBankTMhydro turbine and our latest design,
      the MPGTMaccelerated magnetic piston generator. In pursuit of
      this, we:                                 
|-- | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | (a) | will pursue the development and testing of our HeatSeekerTM, EliminatorTM, SideWinderTM, RiverBankTMand MPGTMprototypes on various applications. We anticipate
        that the development and testing programs for these products will continue
        for the foreseeable future. The results of these testing programs will
        be used to further refine the product designs and identify the optimal
        sizes and configurations for various commercial and

4

---

|   |                                                                                                                                                                                                                                                                                                                                                                                                                               | consumer applications. Our SideWinderTMand RiverBankTMtechnologies are currently being developed through World, Wind and
      Water Energy LLC, our joint venture operation with the Abell Foundation,
      Inc. and Robert D. Hunt. In addition, we have agreed to form a joint venture
      with ThermaSource, Inc. a California geothermal energy consultant, to develop
      our MPGTMand HeatSeekerTMtechnologies for application
      in the fields of geothermal and hydrothermal energy.                                                                                                                                                                                                                                                                                 
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                           | will refine our marketing and sales program for each
        of the products. The anticipated costs of manufacturing each product will
        be analyzed using the final designs and specifications for each. These
        costs will be used to develop a business model for various applications.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               | The business models will be analyzed in order to identify
        the optimum target market for each of the products. We anticipate that
        the optimum market will depend on various factors, including the energy
        source, the electricity that can be generated based on the available energy
        source, the manufacturing costs and installation costs and the price of
        electricity in the targeted customers market. If we are able to
        develop fully functional prototypes of any of our Encore Products, of
        which there is no assurance, we intend to invite industry representatives
        to Mr. Hunts facility located in Pass Christian, Mississippi in
        order demonstrate the potential benefits of those technologies.
|2. | We also plan to continue operating our advertising
        business through our wholly owned subsidiary, Ignite Communications, Inc.
        We will continue to seek new clients for our integrated advertising strategies
        and permission-based eDirect 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)                                                                                                                                                                                                                                                                                                                                                                                                                           | Build market awareness and recognition for Ignite
        eDirect Marketing;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                           | Target industries and businesses that represent the
        greatest potential for both email marketing adoption and traditional advertising
        growth;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | (c)                                                                                                                                                                                                                                                                                                                                                                                                                           | Develop and present case studies to organizations
        in other regions and markets who could benefit from our experience;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | (d)                                                                                                                                                                                                                                                                                                                                                                                                                           | Research and utilize emerging relevant technologies
        primarily from application service providers (ASPs);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | (e)                                                                                                                                                                                                                                                                                                                                                                                                                           | Leverage our advertising contacts in pursuit of Ignite
        eDirect Marketing opportunities;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | (f)                                                                                                                                                                                                                                                                                                                                                                                                                           | Pursue strategic acquisitions and alliances to access
        new geographic markets and to add complimentary services.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

We anticipate spending approximately $2,000,000 in pursuing our plan of operation over the next twelve months. This amount is in excess of our current cash reserves. It is anticipated that the Encore Business will not generate any significant
revenues over the next twelve months and we do not anticipate earning sufficient income from the Ignite Business to fund our development plan for the Encore Business. Accordingly, we will require substantial additional financing in order to fund our
plan of operation.  We anticipate that any additional financing will likely be in the form of equity financing as substantial debt financing will not be as available at this stage of our business.

Currently, we do not have any firm financing arrangements in place and there is no assurance that we will be able to achieve sufficient financing required to proceed with the development of our Encore Products. If we do not obtain the necessary
financing, then our plan of operation will be scaled back according to the amount of funds available. The 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 Ignite Business.

5

---

RESULTS OF OPERATIONS

Second Quarter and Six Months Summary

|                   | Second Quarter Ended June 30 | Six Months Ended June 30
|------------------ | ---------------------------- | ------------------------
|                   |                              |                         
|                   | 2005                         | 2004                    
|Revenue            | $853,326                     | $817,854                
|Cost of Revenue    | (645,645)                    | (680,334)               
|Operating Expenses | (546,259)                    | (363,529)               
|Other Expenses     | (182,676)                    | (35,431)                
|Net Loss           | $(521,254)                   | $(261,440)              

Revenue

For the last fiscal quarter, revenues were generated solely
from the 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.

We experienced a slight increase in our revenues during the
second fiscal quarter of 2005 as compared to the same period in 2004. This
increase is due to short-term fluctuations which occur in the retail advertising
industry as well as the addition of 2 new clients.

Revenues for the 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.

Revenue for the 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.

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 Ignite Business represents the cost of
advertising purchased for clients. The decrease in our cost of revenue as
compared to the second fiscal quarter of 2004 is a result of the fact that we
have increased the number of creative and production services conducted by us
in-house. By conducting a greater portion of the creative and production
services in-house, we have decreased the cost of advertising services that must
be purchased for our clients and increased our gross profits.

6

---

Operating Expenses

|                       | Second Quarter Ended June 30 | Six Months Ended June 30
|---------------------- | ---------------------------- | ------------------------
|                       |                              |                         
|                       | 2005                         | 2004                    
|Depreciation           | $2,973                       | $8,272                  
|Salaries and Fringe    | 148,760                      | 167,199                 
|Benefits               |                              |                         
|Legal and Accounting   | 57,116                       | 28,808                  
|Consulting Fees and    | 169,070                      | 108,744                 
|Computer Services      |                              |                         
|Phones and Utilities   | 8,042                        | 6,149                   
|Rent                   | 28,572                       | 24,720                  
|Advertising and        | 91,775                       | 3,374                   
|Promotion              |                              |                         
|Other selling, general | 39,951                       | 16,262                  
|and administrative     |                              |                         
|Total Operating        | $546,259                     | $363,529                
|Expenses               |                              |                         

Our total operating expenses incurred during the quarter ended
June 30, 2005 increased by $182,730 or 50.3% over our operating expenses
incurred during the same period ended June 30, 2004. This increase in our
operating expenses was primarily attributable to significant increases to our
legal and accounting fees, consulting fees and computer services, advertising
and promotion expenses and other selling, general and administrative
expenses.

The increase in consulting fees and computer services for the
  six months ended June 30, 2005 compared to the six months ended June 30, 2004,
  is primarily the result of additional consulting costs associated with the development
  of our clean energy technologies for the Encore Business.

During the quarter ended June 30, 2005, we commenced a
marketing and advertising campaign in order to promote public awareness of
developments in our clean energy technologies for the Encore Business. As a
result, we experienced a significant increase in the advertising and promotion
expenses that we incurred during the period as compared to the same period ended
June 30, 2004.

The increase in selling, general and administrative costs
during the quarter ended June 30, 2005 compared to the same period in 2004 is a
direct result of our increased spending to support the Encore Business.

We also experienced a decrease in amounts incurred as a result
of salaries and fringe benefits during the quarter ended June 30, 2005. This
decrease is largely a result of the amalgamation of Forge Marketing Inc.s
operations into Ignite Communications and the subsequent decrease in staffing
levels.

Interest Expenses

|                  | Second Quarter Ended June 30 | Six Months Ended June 30
|----------------- | ---------------------------- | ------------------------
|                  |                              |                         
|                  | 2005                         | 2004                    
|Interest Expenses | 182,676                      | 35,431                  

7

---

The increase in interest expenses during the quarter ended June
30, 2005 as compared to the same period in 2004 is primarily attributable to
interest and financing charges related to advances from related parties and
loans repaid during the period.

LIQUIDITY AND CAPITAL RESOURCES

Working Capital

|                        |                        |                            | Percentage           
|----------------------- | ---------------------- | -------------------------- | ---------------------
|                        | At June
      30, 2005 | At December
      31, 2004 | Increase / (Decrease)
|Current Assets          | $248,006               | $144,651                   | 71.4%                
|Current Liabilities     | (3,453,157)            | (3,182,031)                | 8.5%                 
|Working Capital Deficit | $(3,205,151)           | $(3,037,380)               | 5.5%                 

Cash Flows

|                                                   | Six Months Ended June 30
|-------------------------------------------------- | ------------------------
|                                                   | 2005                    
|Net Cash from (used in) Operating
      Activities | $(573,616)              
|Net Cash from (used in) Investing Activities       | (1,701)                 
|Net Cash from (used in) Financing
      Activities | 585,288                 
|Net Increase (decrease) in Cash During Period      | $14,535                 

The increase in our current assets is primarily attributable to
an increase in accounts receivable, which increased by $53,748 or 40.8% from
December 31, 2004. In addition, we have recorded investments in the amount of
$30,518 on account of shares of a publicly traded company that we received in
settlement of an accounts receivable debt. The increase in our current
liabilities is primarily attributable to increases in our accounts payable,
which increased by $105,827 or 5.5% from December 31, 2004, and to increases in
the current portion of amounts due to related parties, which increased by
$156,121 or 18.1% from December 31, 2004.

Cash provided by financing activities for the six months ended
June 30, 2005 consisted primarily of the following:

> - We recorded as cash received from issuance of LLC subsidiary units, $100,000
>     in capital contributions made by the Abell Foundation, Inc. to our joint venture
>     enterprise, World, Wind and Water Energy LLC.
>   - In August, 2005 we issued 300,000 shares of our Series A Convertible Preferred
>     Stock at a price of $0.50 per share to a number of accredited investors. See
>     Part II, Item 2, Unregistered Sales of Equity Securities and Use of
>     Proceeds.
>   - During the six months ended July, 30, 2005, we received financing from
>     related parties in the amount of $225,545. There are no fixed terms of repayment
>     attached to the amounts advanced.

We anticipate that we will require financing in the amount of
$2,000,000 in order to fund our plan of operation over the next twelve months.
In addition to financing our development plans for the Encore Products, we
anticipate that we will continue to require additional financing to fund the
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 operation 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

8

---

that existing shareholders will suffer dilution. In addition to third party debt financing and equity financings, we have sustained our operations to date with advances from related parties, however we do not have any formal financing arrangements
in place with any of these related parties and there is no assurance that they will continue to provide us with funds.

Our ability to meet our current obligations is dependent upon continued advances from related parties, upon our ability to increase our revenues while maintaining expenses and upon 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.

RISKS AND UNCERTAINTIES

Risks and Uncertainties Related to the Encore Business

The Encore Business Will Incur Losses And May Never Achieve Profitability

We do not expect the Encore Business to achieve profitability in the near future and we expect to incur substantial operating losses for at least the next eighteen months. If we are unable to develop a significant revenue stream or if expenses are
larger than expected, the Encore Business may never become profitable. We anticipate substantial expenditures in a number of areas, including:

- development and commercialization of prototypes;
- public demonstration of prototypes;
- marketing and promotion of our Encore products, including building recognition of the Encore name;
- establishing an operating infrastructure, including management and administrative personnel.

In addition, as a result of the lack of an operating history, the emerging nature of the clean energy market and the unproven nature of our clean energy business model, we are unable to accurately forecast revenue for the Encore Business. We will
incur operating expenses based predominantly on operating plans and estimates of future revenue. We may be unable to adjust spending in a timely manner to compensate for any unexpected revenue shortfalls.

Accordingly, a failure to meet revenue projections would have an immediate and negative impact on our ability to achieve profitability.

Liquidity and Future Operations

Our plan of operation calls for significant expenses in connection with the development of our Encore Products. Our current operating funds and revenues are insignificant compared to the funding required to complete our plan of operation which will
require an estimated $2,000,000 to be spent over the next 12 months developing and marketing prototypes of our Encore products in order to accomplish our goals. As of June 30, 2005, we had cash in the amount of $14,535 and a working capital
deficit of $3,205,151. Our ability to meet our obligations in the ordinary course of our operations is dependent on our ability to establish profitable operations and positive cash flows from operating activities or to obtain additional funding
through public or private equity financing, debt collaborative or other arrangements.

9

---

We will also require additional financing if the costs of developing our Encore products are greater than anticipated.  There is no assurance that actual cash requirements will not exceed our estimates. In particular, additional capital may be
required in the event that:

- we incur unexpected costs in completing the development of a prototype of one of our products or encounter any unexpected technical or other difficulties;
- we incur delays and additional expenses as a result of technology failure;
- we are unable to create a substantial market for our products; or
- we incur any significant unanticipated expenses.

We are working to obtain sufficient working capital from external sources in order to continue operations and meet our plan of operation. There is however, no assurance that the aforementioned events, including the receipt of additional funding,
will occur or be successful. Failure to generate sufficient cash flow will require us to amend or reduce our operations and could adversely affect our ability to meet our plan of operation.

Risks Related To The Protection Of Intellectual Property Rights

Ownership of patent applications of the Cryotherm technologies invented by Robert Hunt resides with Mr. Hunt, who has provide us with an exclusive worldwide license to make, use and sell products based on such patent applications in consideration of
license fees and royalties. We are relying on the patent applications of Mr. Hunt to protect our core technologies and products from competition.

We cannot assure investors that pending or future patent applications will result in the granting of patents or that any issued patents will not be invalidated, circumvented or challenged. A portion of our proprietary technology depends upon
unpatented trade secrets and know-how. Without patent protection we would be vulnerable to competition from third parties who could develop competing products through reverse engineering. Also, where we do not have patent protection, competitors may
independently develop substantially equivalent technology or otherwise gain access to our trade secrets, know-how or other proprietary information.

Our Product Development Program May Not Be Successful

Once we complete development of our prototypes there is no assurance that our prototypes will work as expected. In the event we successfully develop a prototype, there is no assurance that we will be able to manufacture the prototype at a reasonable
cost.  Even if we are able to manufacture the prototype at a reasonable cost, there is no assurance that the price of our Encore Products will not be excessive, precluding the product from generating sufficient market acceptance. As such, there is
no assurance that we will be able to successfully develop and commercialize the Encore Products.

A Market For The Encore Products And Services May Not Develop Or We May Be Unable To Achieve Market Acceptance

Our technologies and products represent an emerging market, and we are unable to provide assurances that our targeted customers and markets will accept our technologies or will purchase our products and services in sufficient quantities to achieve
profitability. If a significant market fails to develop or develops more slowly than we anticipate, we may be unable to recover the losses incurred to develop products, we may be unable to meet our operational expenses and we may be unable to
achieve profitability. The development of a suitable market for our technologies and products may be impacted by many factors which are out of our control, including:

- the cost competitiveness of our products and services;
- the cost and availability of alternative products and services;
- customer reluctance to try new products or services;
- regulatory requirements; and
- the emergence of newer, more competitive technologies and products.

10

---

The Encore Business Is Dependent On Key Personnel and Sub-Contractors

The success of the Encore Business depends on the abilities and continued participation of key personnel such as inventor Robert Hunt, who has been instrumental in bringing several of our technologies to their present state of development. The loss
of Mr. Hunts services could hamper the successful development of our new technologies and products. We do not have "key man" life insurance on Mr. Hunt and have no plans to obtain such insurance. Our success also depends on our ability to
attract and retain additional skilled employees, vendors and sub-contractors, who can bring our patents-pending designs to market.

We intend to rely in the near term upon sub-contractors and suppliers for a significant portion of our current and proposed products. The inability of sub-contractors and suppliers to meet their obligations may affect our ability to develop and
deliver products on a timely and competitive basis.

Our success in the next few years is significantly dependent upon the abilities of our management. The determination of employee compensation is in control of the Board of Directors of the Company. The loss of the services of any one or more of our
key employees or contractees could adversely affect us to a substantial degree.

Limited Experience of Management

Although our management collectively has significant business experience, most of our current officers and directors have limited experience with the clean energy business in particular. There is no assurance that we have or will acquire the skills
necessary to enable the Encore Business to be profitable

We Have A Limited Operating History In The Energy Business

We have only recently moved into the clean energy business and we have limited experience operating in this business. We will need to generate significant revenues to achieve profitability, which may not occur. Our limited operating history makes it
difficult to forecast future operating results.  We expect operating expenses to increase as a result of the further implementation of our business plan. Even if we achieve profitability, we may be unable to sustain or increase profitability on a
quarterly or annual basis in the future. It is possible that we will never achieve profitability.

Risks and Uncertainties Related to the Ignite Business

Our Existing Ignite  Client Base Is Concentrated And The Loss Of A Major Client Would Be Difficult To Replace

Three advertising clients currently account for over 61% of our revenues. The loss of any of these clients would significantly damage our revenue base and opportunities for growth. We cannot guarantee that these clients will remain with us or that
we will be able to access new clients to replace them.

Competition For Internet Advertising And Direct Marketing Is Intense And Could Adversely Affect Our Business.

The market for internet advertising and direct marketing is intensely competitive, rapidly changing and highly fragmented. With no significant barriers to entry and increasing attention being placed on the internet as a means of advertising and
direct marketing, we expect that competition will continue to increase in the near term. Our ability to compete and generate revenue from businesses will depend on our skill in utilizing our expertise in electronic direct marketing technology to
provide superior strategies and execution.

As we expand the scope of our advertising product and service offerings, we may compete with a greater number of media companies across a wide range of advertising and direct marketing services. Many of these companies have greater name recognition,
longer operating histories, larger customer bases and significantly greater financial, technical, marketing, public relations, sales, distribution and other resources than we do. In addition, current and potential competitors have established or may
establish cooperative relationships among themselves or with third parties to increase the ability of their products or services to

11

---

address the needs of our prospective advertisers and advertising agency customers. As a result, we may not be able to compete effectively and competitive pressures may result in price reductions, reduced gross margins and an inability to gain market
share.

Failure To Safeguard Member Privacy Could Affect The Ignite Reputations Among Consumers.

An important feature of the Ignite advertising and marketing strategies is our ability to capture list member profiles on behalf of our clients. Security and privacy concerns may cause consumers to resist providing the personal data necessary to
support this profiling capability. Usage of our marketing program could decline if any well-publicized compromise of security occurred. As a result of these security and privacy concerns, we may incur significant costs to protect against the threat
of security breaches or to alleviate problems caused by such breaches.

For Ignite To Remain Competitive, We Must Keep Pace With Technological Changes In Our Industry

The internet and our market are characterized by rapidly changing technologies, frequent new product and service introductions, short development cycles, evolving industry standards and intense competition. We must adapt to rapidly changing
technologies by maintaining and improving the performance features and reliability of our services. We may experience technical difficulties that could impact the operation of existing systems or delay the successful development, introduction or
marketing of new products and services.

Continued Development And Use Of The Internet Infrastructure Is Critical To Ignites Ability To Offer Our Services

We depend heavily on third-party providers of internet and related telecommunication services to operate our online direct marketing service. Internet service providers have experienced significant outages in the past, and could experience outages,
delays and other difficulties due to system failures unrelated to our systems. If outages or delays occur frequently in the future, internet usage and the usage of our products and services could grow more slowly or decline. If internet usage grows,
the internet infrastructure may not be able to support the demands placed on it by this growth and its performance and reliability may decline.

Government Regulation And The Legal Uncertainties Of Doing Business On The Internet Could Negatively Impact The Ignite Business

Laws and regulations that apply to internet communications, commerce and advertising are becoming more prevalent. These regulations could affect the cost of communicating on the internet and negatively affect the demand for our direct marketing
solutions or otherwise harm our business. Laws and regulations may be adopted covering issues such as user privacy, pricing, libel, acceptable content, taxation and quality of products and services. This legislation could hinder growth in the use of
the Internet generally and decrease the acceptance of the Internet as a communications, commercial and direct marketing medium.

The laws governing the internet remain largely unsettled, even in areas where there has been some legislative action. It may take years to determine whether and how existing laws apply to the internet and internet advertising. In addition, the
growth and development of the market for Internet commerce may prompt calls for more stringent consumer protection laws, both in the United States and abroad. This may impose additional burdens on companies conducting business over the Internet.

The Ignite Business Is Dependent on Key Personnel

The success of our Ignite Business depends on the abilities and continued participation of key personnel. The loss of any of our key employees, consultants or sub-contractors could hamper the development and continued operation of our Forge/Ignite
Business and could have a substantial adverse affect on the Company as a whole.

Ignite Has a Limited Operating History

We have a limited operating history upon which to evaluate our business strategies and performance. Our limited operating history makes it difficult to forecast future operating results. We cannot be certain that

12

---

revenues will increase at a rate sufficient to achieve and maintain profitability. Even if we were to achieve profitability in any period, we might fail to sustain or increase that profitability on a quarterly or annual basis.

ITEM 3. CONTROLS AND PROCEDURES.

Evaluation Of Disclosure Controls And Procedures

As of the end of the period covered by this report, our management carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and
operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer has concluded that our disclosure controls
and procedures are, as of the date covered by this Quarterly Report, effective to ensure that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the SEC rules and forms.

Changes In Internal Controls Over Financial Reporting

In connection with the evaluation of our internal controls during our last fiscal quarter, our Chief Executive Officer and Chief Financial Officer has determined that there have been no changes to our internal controls over financial reporting that
has materially affected, or is reasonably likely to materially effect, our internal controls over financial reporting.

13

---

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

None.

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

Issuance of Series A Convertible Preferred Stock

Effective on April 20, 2005, we accepted the subscription of an unrelated corporate investor (the Corporate Investor) for a total of 300,000 shares of Series A Convertible Preferred Stock at a price of $0.50 per share for total
aggregate proceeds of $150,000.  These shares were issued in reliance on the exemptions to registration contained in Regulation D and Regulation S promulgated under the Securities Act of 1933 (the Securities Act).

Due to an administrative error, share certificates representing the Series A Convertible Preferred stock were issued prior to the filing of the Certificate of Designation with the Delaware Secretary of State. As a result, we have cancelled the
previously issued share certificates and will re-issue new certificates upon receipt of the cancelled certificates.

Issuance of Common Stock to Consultants

Effective June 1, 2005, we entered into consulting contracts with two companies resident in Canada (each a Canadian Consultant) for the provision of investor relations services. Each of these contracts calls for the Canadian Consultant
to be paid fees in the amount of $4,500 per month, payable by the issuance of 10,000 shares of our common stock, which shares are to be issued to the Canadian Consultants on a quarterly basis. As a result, effective July 15, 2005, we issued an
aggregate of 60,000 shares of our common stock (30,000 shares each) to the Canadian Consultants. These shares were issued to the Canadian Consultants in reliance of Regulation S promulgated under the Securities Act on the basis that the Canadian
Consultants were not U.S. persons as defined in Regulation S.

Effective July 15, 2005, we entered into an additional consulting contract with a company resident in the United States (the US Consultant), also for the provision of investor relations services. The contract calls for the US consultant
to be paid fees of $3,000 US per month, plus an additional equity based consulting fee of $20,000 per each three month period, payable by the issuance of 100,000 shares of our common stock, which shares are to be issued at the end of each
such three month period. As a result, effective July 15, 2005, we issued an aggregate of 100,000 shares of our common stock to the US Consultant. These shares were issued to the US Consultant in reliance of the exemptions to registration contained
in Regulation D promulgated under the Securities Act on the basis that the US Consultant is an accredited investor as that term is defined in Regulation D.

Issuance of Convertible Note

Effective July 5, 2005, we issued a convertible note to Robert D. Hunt in the principal amount of $375,000, with interest payable at a rate of 6% per annum, beginning on July 1, 2007 and maturing on June 30, 2010 (the Hunt Convertible
Note). Mr. Hunt acts as one of our principal consultants and is one of our principal stockholders. The terms of the Hunt Convertible Note provide that, at any time prior to payment of the Hunt Convertible Note in full, Mr. Hunt may convert the
principal balance outstanding and any accrued and unpaid interest into shares of our common stock at a conversion price of $0.10 per share. However, we may, at our option, elect to pay any accrued interest amounts in cash.  The Hunt Convertible
Note was issued in settlement of the amounts accrued and owing to Mr. Hunt from the beginning of the year to June 30, 2005 under our licensing agreement with him. The Hunt Convertible Note was issued pursuant to the exemptions to registration
contained in Regulation D promulgated under the Securities Act on the basis that Mr. Hunt is an accredited investor as defined in Regulation D. Immediately upon issuance of the Hunt Convertible Note, Mr. Hunt exercised his conversion
rights with respect to $66,000 of the principal amount, and directed us to issue the shares to the Abell Foundation, Inc. and two individual investors. The Abell

14

---

Foundation is one of the principal members of our joint venture, World, Wind and Water Energy LLC. The shares were issued to the Abell Foundation and the individual investors in reliance of the exemptions to registration set out in Section 4(2) of
the Securities Act and in Regulation D promulgated under the Securities Act on the basis that the Abell Foundation is an accredited investor, as defined in Regulation D and that the individual investors have a long standing personal
relationship with Mr. Hunt, our principal consultant and an affiliate of the Company.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

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

None.

ITEM 5. OTHER INFORMATION.

Entry Into Material Definitive Agreements

Advertising and Promotion Agreement with Free Market News Network

Effective April 18, 2005, we entered into an advertising and promotions agreement with the Free Market News Network, Corp. (FMNN), an internet based news network, whereby FMNN has agreed to provide us with internet coverage and
advertising services.  In exchange, we have agreed to pay FMNN a fee of $60,000 upon execution of the agreement plus a monthly fee of $10,000 for the first six months of the agreement. A copy of this agreement is attached as an exhibit to
this Quarterly Report.

Agreements with Canadian Investor Relations Consultants

Effective June 1, 2005, we entered into agreements with two investor relations consultants located in Canada for the provision of investor relations, business promotion and general business services for a period of twelve months.  Each of these
agreements called for the consultants to be paid a monthly consulting fee of $4,500 per month, payable by the issuance of $10,000 shares of our common stock per month, which shares are to be issued to the consultants on a quarterly basis.  A
copy of the consulting agreements are attached as exhibits to this Quarterly Report.

Amendment to Licensing Agreement with Robert D. Hunt

Effective July 5, 2005, we issued a $110,000 convertible note to Robert D. Hunt, the inventor of most of the technologies underlying the Encore Business and our principal stockholder. The terms of the convertible note are described in Part II,
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds of this Quarterly Report. In addition, we reached an agreement with Mr. Hunt such that the $20,000 per month royalty advances/consulting fees that we are required to
pay Mr. Hunt through to May 31, 2006 under our licensing agreement with him may be paid in shares of our common stock at a rate of $0.10 per share. A copy of our agreement with Mr. Hunt and a copy of the convertible note agreement have been
filed as exhibits to this Quarterly Report.

Agreement with US Investor Relations Consultant

Effective July 15, 2005, we entered into an agreement with an investor relations consultant based in Georgia for the provision of investor relations services and to act as a finder for sourcing potential financing opportunities for us.
The agreement extends for a period of twelve months and calls for us to pay the consultant a fee of $3,000 per month plus an additional fee of $20,000 per three month period, which additional fee is payable by the issuance of 100,000 shares
of our common stock each quarter. In addition, we have agreed to pay the consultant a finders fee equal to 7.5% of the gross proceeds of any equity

15

---

financings completed as a result of its efforts or the right to
participate in 10% of the equity offering. For any debt financings completed as
a result of the consultants efforts, we have agreed to pay a finders fee equal
to 3% of the gross proceeds, payable in cash or, at the option of the
consultant, warrants to acquire shares of our common stock.

Letter Agreement for California Geothermal Joint
Venture

Effective August 5, 2005, we signed a letter agreement with ThermaSource
  Inc., a California based geothermal consulting company, to form a joint venture
  for the purpose of developing our MPGTM magnetic piston generator
  and HeatSeekerTM waste heat recovery technologies for use in the
  fields of geothermal and hydrothermal energy production. Pursuant to this agreement,
  we will grant a sub-license for our intellectual property rights to these technologies
  to the joint venture for use exclusively within California. ThermaSource will
  contribute its engineering and technical expertise in the areas of drilling,
  constructing and operating geothermal facilities. Encore will provide the initial
  funding to the joint venture. Louis Capuano, President of ThermaSource, will
  act as the managing director of the joint venture and will receive a minimum
  consulting fee of $10,000 per month. A copy of the letter agreement is attached
  as an exhibit to this Quarterly Report.

Unregistered Sales of Equity Securities

Since the end of our fiscal quarter ended March 31, 2005, we
have completed those sales of our equity securities described in Part II, Item 2
Unregistered Sales of Equity Securities and Use of Proceeds of this Quarterly
Report.

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, as amended.(1)                                                                                                                                                
|3.2                  |  | Certificate of Designation of Rights,
      Preferences and Privileges of Series A Convertible Preferred Stock.                                                                          
|3.3                  |  | Bylaws as Amended.(2)                                                                                                                                                                    
|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. (3)                     
|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. (4)      
|10.6                 |  | Limited Liability Company Agreement of World,
      Wind and Water LLC, dated January 14, 2005, between Encore Clean Energy,
      Inc., Robert D. Hunt and The Abell Foundation, Inc.(5)
|10.7                 |  | First Amendment to the Limited Liability Company Agreement
      of World, Wind and Water Energy LLC dated January 14, 2005.(5)                                                          
|10.8                 |  | Technology Contribution Agreement, dated January
      14, 2005, between Encore Clean Energy, Inc., Robert D. Hunt and World, Wind
      and Water Energy LLC.(5)                        

16

---

|Exhibit
      Number |  | Description of
      Exhibit                                                                                                                                            
|-------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                     |  |                                                                                                                                                                         
|10.9                 |  | Convertible Note Agreement dated January 14,
      2005 between Encore Clean Energy, Inc. and Robert Hunt.(6)                                                           
|10.10                |  | Web Coverage and Advertising Services
      Agreement dated effective as of April 18th, 2005 between Encore
      Clean Energy, Inc. and Free-Market News Network, Corp.
|10.11                |  | Consulting Agreement
      dated June 1, 2005 between Encore Clean Energy, Inc. and McCreath Communications.                                                            
|10.12                |  | Consulting Agreement dated June
      1, 2005 between Encore Clean Energy, Inc. and tinePublic Inc.                                                                     
|10.13                |  | Letter Agreement
      dated July 5, 2005 between Encore Clean Energy, Inc. and Robert D. Hunt.                                                                         
|10.14                |  | Convertible Note Agreement dated
      July 5, 2005 between Encore Clean Energy, Inc. and Robert D. Hunt.                                                               
|10.15                |  | Consulting Agreement
      dated July 15, 2005 between Encore Clean Energy, Inc. and C&H Capital,
      Inc.                                                            
|10.16                |  | Letter Agreement dated August 5,
      2005 between Encore Clean Energy, Inc. and ThermaSource, Inc.                                                                    
|14.1                 |  | Code of Ethics(1)                                                                                                                                                       
|21.1                 |  | List of Subsidiaries(1)                                                                                                                                                 
|31.1                 |  | Certification of
      Chief Executive Officer and Chief Financial Officer as adopted pursuant
      to Section 302 of the Sarbanes-Oxley Act of 2002                   
|32.1                 |  | Certification of Chief Executive
      Officer and Chief Financial Officer 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.   
| | --- | ----------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                 
| | (2) | Previously filed as an exhibit to our Current Report
        on Form 8-K, filed with the SEC on Mary 13, 2002.  
| |     |                                                                                                                 
| | (3) | Previously filed as an exhibit to our Current Report
        on Form 8-K filed with the SEC on August 1, 2003.  
| |     |                                                                                                                 
| | (4) | Previously filed as an exhibit to our Current Report
        on Form 8-K filed with the SEC on October 15, 2003.
| |     |                                                                                                                 
| | (5) | Previously filed as an exhibit to our Current Report
        on Form 8-K filed with the SEC on January 19, 2005.
| |     |                                                                                                                 
| | (6) | Previously filed as an exhibit to our Current Report
        on Form 8-K filed with the SEC on January 18, 2005.

(b) Current Reports On Form 8-K.

We have filed the following reports on Form 8-K since the end
of our fiscal quarter ended March 31, 2005:

|Date of Form 8-K | Date of Filing with the
      SEC | Description of the Form 8-K                                                                                                                                                                              
|---------------- | --------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                 |                                   |                                                                                                                                                                                                          
|April 19, 2005   | May 16, 2005                      | Disclosing restatement of the
      Companys December 31, 2003 audited financial statements and March 31,
      2004, June 30, 2004 and September 30, 2004 unaudited interim financial
      statements.
|
|
|
|August 5, 2005   | August 8, 2005                    | Disclosing dismissal of KPMG LLP as
      principal independent accountant and appointment of Dohan and Company, PA
      as principal independent accountant                                            
|
|

17

---

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: September 6, 2005

| | By: | /s/ Daniel Hunter          
| | --- | ---------------------------
| |     |                            
| |     | Daniel Hunter              
| |     | Chief Executive Officer and
| |     | Chief Financial Officer    

---