UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549  FORM 10-Q  (Mark one) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2010.   [  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.  Commission file number 000-29587  VALLEY FORGE COMPOSITE TECHNOLOGIES, INC. (Exact name of registrant as specified in its charter)  Florida  20-3061892(State or other jurisdiction of  (IRS Employerincorporation or organization)  Identification No.)50 East River Center Blvd., Suite 820, Covington, KY  41011(Address of principal executive offices)  (Zip Code)  Issuer's telephone number: (859) 581-5111  Securities to be registered under Section 12(b) of the Act:   None  Securities to be registered under Section 12(g) of the Act:  Common Stock, Par Value $.001 Per Share (Title of class)  Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    [X] Yes    [  ] No  Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes  [  ]   No  [  ]   Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  Large accelerated filer [  ]  Accelerated filer [  ]Non-accelerated filer [  ]  Smaller reporting company [X]   1    Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).     [   ] Yes    [X] No  The number of shares outstanding of the issuers common stock as of November 15, 2010 was 61,320,774 shares.   2    VALLEY FORGE COMPOSITE TECHNOLOGIES, INC. FORM 10-Q FOR THE PERIOD ENDED SEPTEMBER 30, 2010  INDEX


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|                                                  | Page                                                                                                                        
|EXPLANATORY NOTE                                  | 4                                                                                                                           
|                                                  |                                                                                                                             
|SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS | 4                                                                                                                           
|                                                  |                                                                                                                             
|PART I. FINANCIAL INFORMATION                     | 5                                                                                                                           
|                                                  |                                                                                                                             
|Item 1.                                           | Financial Statements                                                                                                         | 5 
|                                                  | Condensed Consolidated Balance Sheets as of September 30, 2010 (Unaudited) and December 31, 2009                             | 5 
|                                                  | Condensed Consolidated Statements of Operations (Unaudited) for the three and  nine months ended September 30, 2010 and 2009 | 6 
|                                                  | Condensed Consolidated Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2010 and 2009            | 7 
|                                                  | Notes to the Condensed Consolidated Financial Statements                                                                     | 8 
|Item 2.                                           | Managements Discussion and Analysis of Financial Condition and Results of Operations                                        | 22
|Item 3.                                           | Qualitative and Quantitative Disclosures About Market Risk                                                                   | 27
|Item 4.                                           | Controls and Procedures                                                                                                      | 27
|                                                  |                                                                                                                             
|PART II. OTHER INFORMATION                        | 28                                                                                                                          
|                                                  |                                                                                                                             
|Item 1.                                           | Legal Proceedings                                                                                                            | 28
|Item 2.                                           | Unregistered Sales of Equity Securities and Use of Proceeds                                                                  | 29
|Item 3.                                           | Defaults Upon Senior Securities                                                                                              | 30
|Item 4.                                           | [REMOVED AND RESERVED]                                                                                                       | 30
|Item 5.                                           | Other information                                                                                                            | 30
|Item 6.                                           | Exhibits                                                                                                                     | 30
|                                                  |                                                                                                                             
|SIGNATURES                                        | 31                                                                                                                          

Special Note Regarding Forward-Looking Statements  Information included in this Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act). This information may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Valley Forge Composite Technologies, Inc. (the Company), to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words may, will, should, expect, anticipate, estimate, believe, intend, or project or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.  In this report references to Valley Forge, the Company, we, us, and our refer to Valley Forge Composite Technologies, Inc. and its subsidiaries.  3       PART 1:  FINANCIAL INFORMATION  Item 1.  Financial Statements


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|--------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------- | ------- | ------- | ------- | --------- | ----------- | --------- | ----------- | ------------- | ----------- | ------------ |  | 
|VALLEY FORGE COMPOSITE TECHNOLOGIES, INC.                                              
|CONDENSED CONSOLIDATED BALANCE SHEET                                                   
|                                                                                       
|                                                                                        |                                                                                                       |                                                                                                                        |         |         |         |           |             |           |             | September 30, |             | December 31,
|                                                                                        |                                                                                                       |                                                                                                                        |         |         |         |           | 2010        |           | 2009       
|ASSETS                                                                                  |                                                                                                       |                                                                                                                        |         |         |         |           | (unaudited) |           |            
|                                                                                        | Current assets:                                                                                       |                                                                                                                        |         |         |         |           |             |           |             |              
|                                                                                        |                                                                                                       | Cash                                                                                                                   |         |         |         |           |             | $         | 676,129     | $             | 1,492,135  
|                                                                                        |                                                                                                       | Marketable securities                                                                                                  |         |         |         |           |             |           | 502,440     |               | -          
|                                                                                        |                                                                                                       | Accounts receivable                                                                                                    |         |         |         |           |             |           | 1,337,893   |               | 99,120     
|                                                                                        |                                                                                                       | Inventory                                                                                                              |         |         |         |           |             |           | 786,206     |               | 151,300    
|                                                                                        |                                                                                                       | Prepaid expenses                                                                                                       |         |         |         |           |             |           | 47,979      |               | 104,285    
|                                                                                        |                                                                                                       | Deposits with vendors                                                                                                  |         |         |         |           |             |           | 21,000      |               | 21,000     
|                                                                                        |                                                                                                       | Total current assets                                                                                                   |         |         |         |           |             |           | 3,371,647   |               | 1,867,840  
|                                                                                        | Property and equipment, net                                                                           |                                                                                                                        |         |         |         |           | 70,011      |           | 40,958     
|                                                                                        | Other assets:                                                                                         |                                                                                                                        |         |         |         |           |             |           |             |              
|                                                                                        |                                                                                                       | Security deposit                                                                                                       |         |         |         |           |             |           | 5,535       |               | 5,535      
|                                                                                        |                                                                                                       | Capitalized development costs, net of amortization of $109,840 and $73,227 at September 30, 2010 and December 31, 2009 | 212,341 |         | 170,863
|                                                                                        |                                                                                                       | Loan fees, net of amortization of $234,685 and  $104,842 at September 30, 2010 and December 31, 2009                   | -       |         | 129,843
|                                                                                        |                                                                                                       | Total other assets                                                                                                     |         |         |         |           |             |           | 217,876     |               | 306,241    
|                                                                                        |                                                                                                       |                                                                                                                        |         |         |         |           |             |           |             |               |             |             
|                                                                                        |                                                                                                       | Total Assets                                                                                                           |         |         |         |           |             | $         | 3,659,534   | $             | 2,215,039  
|                                                                                        |                                                                                                       |                                                                                                                        |         |         |         |           |             |           |             |               |             |             
|LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)                                          |                                                                                                       |                                                                                                                        |        
|                                                                                        | Current liabilities:                                                                                  |                                                                                                                        |         |         |         |           |             |           |             |              
|                                                                                        |                                                                                                       | Accounts payable and accrued expenses                                                                                  |         |         | $       | 730,193   | $           | 1,217,603
|                                                                                        |                                                                                                       | Deferred revenue                                                                                                       |         |         |         |           |             |           | 1,916,839   |               | 858,400    
|                                                                                        |                                                                                                       | Convertible debenture                                                                                                  |         |         |         |           |             |           | -           |               | 42,000     
|                                                                                        |                                                                                                       | Due to shareholder                                                                                                     |         |         |         |           |             |           | 192,108     |               | 216,558    
|                                                                                        |                                                                                                       | Total current liabilities                                                                                              |         |         |         |           |             |           | 2,839,140   |               | 2,334,561  
|                                                                                        | Long-term debt, net of debt discount of $-0- and $541,893 at September 30, 2010 and December 31, 2009 | -                                                                                                                      |         | 458,107
|                                                                                        | Shareholders' Equity:                                                                                 |                                                                                                                        |         |         |         |           |             |           |             |              
|                                                                                        |                                                                                                       | Common stock, $.001 par value, 100,000,000 shares                                                                      |         |         |        
|                                                                                        |                                                                                                       | authorized; 61,260,774 and 54,688,920 issued and outstanding at September 30, 2010 and December 31, 2009               | 61,261  |         | 54,689 
|                                                                                        |                                                                                                       | Additional paid-in capital                                                                                             |         |         |         |           |             | 9,804,045 |             | 7,673,903    
|                                                                                        |                                                                                                       | Accumulated deficit                                                                                                    |         |         |         |           |             |           | (9,047,352) |               | (8,306,221)
|                                                                                        |                                                                                                       | Accumulated other comprehensive income                                                                                 |         |         |         |           |             |           | 2,440       |               | -          
|                                                                                        |                                                                                                       | Total shareholders' equity (deficit)                                                                                   |         |         |         |           |             |           | 820,394     |               | (577,629)  
|                                                                                        |                                                                                                       |                                                                                                                        |         |         |         |           |             |           |             |               |             |             
|                                                                                        |                                                                                                       | Total Liabilities and Shareholders' Equity (Deficit)                                                                   |         |         | $       | 3,659,534 | $           | 2,215,039
|See the accompanying notes to the unaudited condensed consolidated financial statements

4    VALLEY FORGE COMPOSITE TECHNOLOGIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)


|                                            |                                          |           |           |            |           |                             |           |                            |             |             |             |          
|------------------------------------------- | ---------------------------------------- | --------- | --------- | ---------- | --------- | --------------------------- | --------- | -------------------------- | ----------- | ----------- | ----------- | ---------
|                                            |                                          |           |           |            |           |                             |           |                            |             |             |             |          
|                                            |                                          |           |           |            |           | For the three months ending |           | For the nine months ending
|                                            |                                          |           |           |            |           | September 30,               |           | September 30,             
|                                            |                                          |           |           |            |           | 2010                        |           | 2009                       |             | 2010        |             | 2009     
|                                            |                                          |           |           |            |           |                             |           |                            |             |             |             |          
|Sales                                       |                                          |           |           | $          | 4,873,687 | $                           | -         | $                          | 13,029,461  | $           | 315,000    
|Cost of sales                               |                                          |           |           | 4,093,643  |           | -                           |           | 11,109,028                 |             | 221,300    
|                                            |                                          |           |           |            |           |                             |           |                            |             |             |             |          
|Gross Profit                                |                                          |           |           | 780,044    |           | -                           |           | 1,920,433                  |             | 93,700     
|                                            |                                          |           |           |            |           |                             |           |                            |             |             |             |          
|Costs and expenses                          |                                          |           |           |            |           |                             |           |                            |            
|                                            | Selling and administrative expenses      | 1,272,974 |           | 282,136    |           | 2,172,214                   |           | 888,476                   
|                                            | Warrant expense                          |           |           | -          |           | 143,623                     |           | -                          |             | 446,223    
|                                            |                                          |           |           |            |           | 1,272,974                   |           | 425,759                    |             | 2,172,214   |             | 1,334,699
|                                            |                                          |           |           |            |           |                             |           |                            |             |             |             |          
|Loss from operations                        |                                          |           | (492,930) |            | (425,759) |                             | (251,781) |                            | (1,240,999)
|                                            |                                          |           |           |            |           |                             |           |                            |             |             |             |          
|Other income (expense)                      |                                          |           |           |            |           |                             |           |                            |             |            
|                                            | Interest expense                         |           |           |            | (3,519)   |                             | (226,945) |                            | (552,037)   |             | (478,115)  
|                                            | Legal settlement                         |           |           | 13,941     |           | -                           |           | 62,441                     |             | -          
|                                            | Investment income                        |           |           | 212        |           | 5                           |           | 246                        |             | 63         
|                                            |                                          |           |           |            |           |                             |           |                            |             |             |             |          
|Net loss                                    |                                          |           |           |            | (482,296) |                             | (652,699) |                            | (741,131)   |             | (1,719,051)
|                                            |                                          |           |           |            |           |                             |           |                            |             |             |             |          
|Other comprehensive  income                 |                                          |           |           |            |           |                             |           |                            |             |            
|                                            | Unrealized gain on marketable securities |           |           |            |           | 2,440                       |           | -                          |             | 2,440       |             | -        
|                                            |                                          |           |           |            |           |                             |           |                            |             |             |             |          
|Comprehensive Loss                          |                                          |           | $         | (479,856)  | $         | (652,699)                   | $         | (738,691)                  | $           | (1,719,051)
|                                            |                                          |           |           |            |           |                             |           |                            |             |             |             |          
|Net loss per common share:                  |                                          |           |           |            |           |                             |           |                            |            
|                                            | Basic and diluted                        |           | $         | (0.01)     | $         | (0.01)                      | $         | (0.01)                     | $           | (0.03)     
|                                            |                                          |           |           |            |           |                             |           |                            |             |             |             |          
|Weighted Average Common Shares Outstanding: |                                          |           |           |            |           |                             |          
|                                            | Basic and diluted                        |           |           | 61,104,490 |           | 53,779,790                  |           | 58,601,068                 |             | 52,448,787 
|                                            |                                          |           |           |            |           |                             |           |                            |             |             |             |          

See the accompanying notes to the unaudited condensed consolidated financial statements    5


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|---------------------------------------------------------------------------------------- | ------------------------------------------------------- | ------------------------------------------ | ------------------------------------- | --------- | ----------- | ---------------------------------------- | ----------- | ----
|VALLEY FORGE COMPOSITE TECHNOLOGIES, INC.                                               
|CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)                             
|                                                                                         |                                                         |                                            |                                       |           |             | For the nine months ending September 30,
|                                                                                         |                                                         |                                            |                                       |           |             | 2010                                     |             | 2009
|CASH FLOWS FROM OPERATING ACTIVITIES                                                     |                                                         |                                            |                                      
|                                                                                         | Net loss                                                |                                            |                                       | $         | (741,131)   | $                                        | (1,719,051)
|                                                                                         | Adjustments to reconcile net loss                       |                                            |                                       |          
|                                                                                         | to net cash provided by (used in) operating activities: |                                            |                                       |           |             |                                         
|                                                                                         |                                                         | Depreciation  and amortization expense     | 180,593                               |           | 104,108    
|                                                                                         |                                                         | Amortization of debt discount              | 541,893                               |           | 385,525    
|                                                                                         |                                                         | Fair value of warrants                     | -                                     |           | 446,223    
|                                                                                         |                                                         | Stock based compensation                   | -                                     |           | 3,750      
|                                                                                         |                                                         | Options issued for compensation            | 890,999                               |           |            
|                                                                                         |                                                         | Change in operating assets and liabilities |                                       |           |            
|                                                                                         |                                                         |                                            | (Increase) decrease in:               |           |             |                                         
|                                                                                         |                                                         |                                            | Accounts receivable                   |           | (1,238,773) |                                          | 7,492      
|                                                                                         |                                                         |                                            | Inventory                             |           |             | (634,906)                                |             | -   
|                                                                                         |                                                         |                                            | Prepaid expenses                      |           | 56,306      |                                          | 125,930    
|                                                                                         |                                                         |                                            | Vendor deposits                       |           | -           |                                          | -          
|                                                                                         |                                                         |                                            | Increase (decrease) in:               |           |             |                                         
|                                                                                         |                                                         |                                            | Accounts payable and accrued expenses | (487,410) |             | (106,534)                               
|                                                                                         |                                                         |                                            | Deferred revenue                      |           | 1,058,439   |                                          | 1,124,373  
|                                                                                         | Net Cash Provided By (Used In) Operating Activities     | (373,990)                                  |                                       | 371,816  
|CASH FLOWS FROM INVESTING ACTIVITIES                                                     |                                                         |                                            |                                      
|                                                                                         | Purchase of capitalized development costs               |                                            | (78,091)                              |           | -          
|                                                                                         | Purchase of marketable securities                       |                                            | (500,000)                             |           | -          
|                                                                                         | Purchases of equipment                                  |                                            | (43,189)                              |           | (2,199)    
|                                                                                         | Net Cash Used In Investing Activities                   | (621,280)                                  |                                       | (2,199)  
|CASH FLOWS FROM FINANCING ACTIVITIES                                                     |                                                         |                                            |                                      
|                                                                                         | Gross proceeds from exercise of warrants                | 245,714                                    |                                       | -        
|                                                                                         | Proceeds from issuance of common stock                  | -                                          |                                       | 337,500  
|                                                                                         | Repayment of convertible debenture                      | (42,000)                                   |                                       | -        
|                                                                                         | Repayments to shareholder                               | (24,450)                                   |                                       | (110,000)
|                                                                                         | Net Cash Provided From Financing Activities             | 179,264                                    |                                       | 227,500  
|NET INCREASE (DECREASE) IN CASH                                                          | (816,006)                                               |                                            | 597,117                              
|CASH AT BEGINNING OF PERIOD                                                              |                                                         | 1,492,135                                  |                                       | 305,179  
|CASH AT END OF PERIOD                                                                    | $                                                       | 676,129                                    | $                                     | 902,296  
|                                                                                         |                                                         |                                            |                                       |           |             |                                          |             |     
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION                                         |                                                         |                                            |                                       |          
|Cash paid during the period for:                                                         |                                                         |                                            |                                       |          
|                                                                                         | Income taxes                                            |                                            | $                                     | -         | $           | -                                       
|                                                                                         | Interest                                                |                                            |                                       | $         | 57,684      | $                                        | 99,439     
|See the accompanying notes to the unaudited condensed consolidated financial statements.

6    VALLEY FORGE COMPOSITE TECHNOLOGIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) SEPTEMBER 30, 2010  NOTE 1  NATURE OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  Nature of the Business  The Companys primary operating subsidiary has been Valley Forge Composite Technologies, Inc., a Pennsylvania corporation, which was incorporated in Pennsylvania on November 21, 1996. On August 7, 2007, Valley Forge Composite Technologies, Inc., a Pennsylvania corporation, was re-domiciled as a Florida corporation and changed its name to Valley Forge Detection Systems, Inc. (VFDS).  Simultaneously, the business segments of the former Pennsylvania company were split into new Florida corporations, with VFDS aerospace segment assigned to Valley Forge Aerospace, Inc. (VFA); VFDS personnel screening technologies assigned to Valley Forge Imaging, Inc. (VFI), and VFDS development and commercialization of potential new product lines assigned to Valley Forge Emerging Technologies, Inc. (VFET).  The Company is the 100% shareholder of its four subsidiaries.  The primary activity of VFI is to market and sell personnel screening devices known as ODIN.  VFA is actively engaged in the design and manufacture of attitude control instruments for small satellites, in particular, mini momentum reaction wheels based on VFAs proprietary composite and bearing technology.  VFET evaluates miscellaneous scientific technologies not matching the Companys aerospace and anti-terrorism business segments for potential commercialization.  Between 1996 and 2003 and between 2009 and 2010, through VFDS, the Company won numerous contracts to produce momentum wheels and various other mechanical devices for special projects. Since September 11, 2001 the Company has focused much of its energy on the development and commercialization of its counter-terrorism products.  Such products include an advanced detection capability for illicit narcotics, explosives, and bio-chemical weapons using photo-nuclear reactions to initiate secondary gamma quanta the result of which is a unique and distinguishable signal identifying each component of a substance. This product is known as the THOR LVX photonuclear detection system (THOR).  The development and commercialization of THOR is the present focus of VFDS.  On July 6, 2006, Quetzal Capital 1, Inc., a Florida corporation (QC1) entered into a share exchange agreement with VFDS predecessor Pennsylvania corporation. Under the share exchange agreement, QC1 issued 40,000,000 shares of its common stock to VFDS shareholders for the acquisition of all of the outstanding capital stock of VFDS.  For financial accounting purposes, the exchange of stock was treated as a recapitalization of VFDS with the former shareholders of QC1 retaining 5,000,000 shares (or approximately 11%) of the public company.  Prior to the merger, QC1 was a reporting shell corporation with no operations. The share exchange was approved by QC1 and its sole shareholder, Quetzal Capital Funding I, Inc. (QCF1), and by VFDS board of directors and a majority of its shareholders.   QC1 changed its name to Valley Forge Composite Technologies, Inc., a Florida corporation, and is referred to throughout this report as the Company.  Several related agreements were also made with parties associated or affiliated with QC1 in connection with the approval of the share exchange. These agreements involved the approval of a consulting agreement and a warrant agreement with Coast To Coast Equity Group, Inc. (CTCEG), a company owned by the same shareholders who owned QC1s sole corporate shareholder, QCF1, and a registration rights agreement for QCF1, CTCEG and private placement unit holders. On March 14, 2007, QCF1 was dissolved by unanimous decision of its three shareholders, Charles J. Scimeca, George Frudakis, and Tony N. Frudakis. This resulted in the Company gaining two additional shareholders due to the splitting of QCF1's share of the Companys common stock between the three individual shareholders of QCF1.  7     Basis of Presentation  The accompanying interim condensed financial statements are unaudited, but in the opinion of management of the Company, contain all adjustments, which include normal recurring adjustments, necessary to present fairly the financial position at September 30, 2010, the results of operations for the three months and nine months ended September 30, 2010 and 2009, and cash flows for the nine months ended September 30, 2010 and 2009.  The balance sheet as of December 31, 2009 is derived from the Companys audited financial statements.  Certain information and footnote disclosures normally included in financial statements that have been prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, although management of the Company believes that the disclosures contained in these financial statements are adequate to make the information presented therein not misleading. For further information, refer to the financial statements and the notes thereto included in the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2009, as filed with the Securities and Exchange Commission.   The results of operations for the nine months ended September 30, 2010 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2010.  Going Concern  The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The attainment of sustainable profitability and positive cash flow from operations is dependent on certain future events. These conditions raise substantial doubt about the Companys ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty (See Note 2).  Use of Estimates  In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates.  Comprehensive Income  The Company follows the Financial Accounting Standards Boards (FASB) Accounting Standards Codification (ASC) for  Reporting Comprehensive Income. Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation of net income. The Companys item of other comprehensive income is the unrealized gain on marketable securities.  Fair Value of Financial Instruments  The Companys financial instruments consist of cash, marketable securities, security deposits, due to shareholders, accounts payables, and a convertible debenture. Except as disclosed in Note 6, the carrying values of these financial instruments approximate the fair value due to their short term maturities.  8     Concentration of Credit Risk  Certain financial instruments potentially subject the Company to concentrations of credit risk. These financial instruments consist primarily of cash. The Company maintains its cash investments in high credit quality financial institutions. At various times, the Company has deposits in excess of the Federal Deposit Insurance Corporation limit. The Company has not experienced any losses on these accounts. At September 30, 2010, the Companys cash deposits exceeded the FDIC insured limits by $412,561.  Cash Equivalents  The Company considers all short-term securities purchased with a maturity of three months or less to be cash equivalents. At September 30, 2010, the Company held no cash equivalent securities.  Inventories  The Company accounts for finished goods inventory by applying the lower of cost or market method, on a first-in, first-out (FIFO) basis. Inventories consist of the following:  September 30   December 312010   2009(unaudited)Raw materials  $ -   $ -Work in process   -    -Finished goods   786,206    151,300$ 786,206   $ 151,300  Property and Equipment  Property and equipment is stated at cost. Depreciation on property and equipment is calculated using the straight-line method over the estimated useful lives of the assets.  Computers and Equipment                5 years Furniture and fixtures                        7 years  Expenditures for major renewals and betterments that extend the useful lives of the assets are capitalized. Expenditures for maintenance and repairs of the assets are charged to expense as incurred.  Loan Fees  Loan fees are stated at cost.  Amortization on loan fees is calculated using the straight-line method over the term of the loans.  Revenue Recognition  The Company recognizes revenue when persuasive evidence of a customer or distributor arrangement exists, shipment of goods to the customer occurs, the price is fixed or determinable and collection is reasonably assured.  For future sales of ODIN and THOR, it is expected customer acceptance, which may include testing, will also be required for revenue recognition.  9      Income Taxes  Income taxes are accounted for in accordance with ASC 740, Accounting for Income Taxes. ASC 740 requires the recognition of deferred tax assets and liabilities to reflect the future tax consequences of events that have been recognized in the Company's financial statements or tax returns. Measurement of the deferred items is based on enacted tax laws. In the event the future consequences of differences between financial reporting bases and tax bases of the Company's assets and liabilities result in a deferred tax asset, ASC 740 requires an evaluation of the probability of being able to realize the future benefits indicated by such assets. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some, or all, of the deferred tax asset will not be realized.  Loss per common share  Basic earnings per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. For the periods below the Company excludes potentially dilutive securities such as convertible warrants and the convertible debenture from the loss per share calculations as their effect would have been anti-dilutive.  The following sets forth the computation of earnings per share. For the Nine Month Period EndedSeptember 30,2010   2009(unaudited)    (unaudited)Net loss  $ (741,131)   $ (1,719,051)Weighted average shares outstanding   58,601,068    52,448,787Loss per share  Basic and diluted  $ (  .01)   $ (  .03)
  The Companys common stock equivalents include the following:  September 30,   September 30,2010   2009(unaudited)    (unaudited)Class C Warrants   -    2,146,667Class D  Warrants   1,428,574    1,857,146Class F Warrants   1,300,000    1,900,000Class G Warrants   -    800,000Total common stock equivalents   2,728,574    6,703,813
   On September 3, 2010 the Company issued 4,050,000 stock options.  See Note 17 for further details.  Share Based Payments   Generally, all forms of share-based payments, including stock option grants, restricted stock grants and stock appreciation rights, are measured at their fair value on the awards grant date, and based on the estimated number of awards that are ultimately expected to vest. Share-based payment awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment,  10    whichever is more readily determinable. The expense resulting from share-based payments are recorded as a component of general and administrative expense.  Stock-Based Compensation  Stock-based compensation is accounted for at fair value in accordance with Accounting Standards Codification (ASC) Topic 178, Compensation-Stock Compensation.  Investments  The Company classifies its equity securities as available for sale.  Securities classified as available for sale are carried in the financial statements at fair value.  Realized gains and losses, determined using the first-in, first-out (FIFO) method, are included in earnings; unrealized holding gains and losses are reported in other comprehensive income.  Warranties  The Company warrants that Aerospace goods delivered under its customer arrangements will conform to applicable technical standards and specifications and will be free from material and manufacture defects.  The warranty period is one year and extends to goods subject to normal use by the customer, as defined.  Management does not believe any significant warranty exposure exists at September 30, 2010.  Recent accounting pronouncements  Effective July 1, 2009, the Company adopted ASC 105-10, Generally Accepted Accounting Principles  Overall."ASC 105-10 establishes the ASCas the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with U.S. GAAP. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative U.S. GAAP for SEC registrants. All guidance contained in the ASC carries an equal level of authority. The ASC superseded all existing non-SEC accounting and reporting standards. All other non-grandfathered, non-SEC accounting literature not included in the ASC is non-authoritative. The FASB will not issue new standards in the form of Statements, FASB Staff Positions or Emerging Issues Task Force Abstracts. Instead, it will issue Accounting Standards Updates (ASUs). The FASB will not consider ASUs as authoritative in their own right. ASUs will serve only to update the ASC, provide background information about the guidance and provide the bases for conclusions on the change(s) in the Codification. References made to FASB guidance throughout this document have been updated for the ASC.  Effective June 30, 2009, the Company adopted three ASUs which were intended to provide additional application guidance and enhanced disclosures regarding fair value measurements and impairments of securities. They also provide additional guidelines for estimating fair value in accordance with fair value accounting. The first update, as codified in ASC 820-10-65, provides additional guidelines for estimating fair value in accordance with fair value accounting. The second accounting update, ascodified in ASC 320-10-65, changes accounting requirements for other-than-temporary-impairment (OTTI) for debt securities by replacing the current requirement that a holder have the positive intent and ability to hold an impaired security to recovery in order to conclude an impairment was temporary with a requirement that an entity conclude it does not intend to sell an impaired security and it will not be required to sell the security before the recovery of its amortized cost basis. The third accounting update, as codified in ASC 825-10-65, increases the frequency of fair value disclosures. These updates were effective for fiscal years and interim periods ended after June 15, 2009. The adoption of these accounting updates did not have a material impact on the Companys financial statements.  Effective June 30, 2009, the Company adopted a new accounting standard for subsequent events, as codified in ASC 855-10. The update modifies the names of the two types of subsequent events either as recognized subsequent events (previously referred to in practice as Type I subsequent events) or non-recognized subsequent events (previously referred to in practice as Type II subsequent events). In addition, the standard modifies the definition of subsequent events to refer to events or transactions that occur after the balance sheet date, but before the financial statements are issued (for public entities) or available to be issued (for nonpublic entities). It also  11    requires the disclosure of the date through which subsequent events have been evaluated. The update did not result in significant changes in the practice of subsequent event disclosures, and therefore the adoption did not have a material impact on the Companys financial statements.  Effective January 1, 2009, the Company adopted an ASU regarding the determination of the useful life of intangible assets. As codified in ASC 350-30-35, this update amends the factors considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under intangibles accounting. It also requires a consistent approach between the useful life of a recognized intangible asset under prior business combination accounting and the period of expected cash flows used to measure the fair value of an asset under the new business combinations accounting (as currently codified under ASC 850). The update also requires enhanced disclosures when an intangible assets expected future cash flows are affected by an entitys intent and/or ability to renew or extend the arrangement. The adoption did not have a material impact on the Companys financial statements.  Effective July 1, 2009, the Company adopted FASB ASU No. 2009-05, Fair Value Measurements and Disclosures (Topic 820) (ASU 2009-05). ASU 2009-05 provided amendments to ASC 820-10, Fair Value Measurements and Disclosures  Overall, for the fair value measurement of liabilities. ASU 2009-05 provides clarification that in circumstances in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using certain techniques. ASU 2009-05 also clarifies that when estimating the fair value of a liability, a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of a liability. ASU 2009-05 also clarifies that both a quoted price in an active market for the identical liability at the measurement date and the quoted price for the identical liability when traded as an asset in an active market when no adjustments to the quoted price of the asset are required are Level 1 fair value measurements. Adoption of ASU 2009-05 did not have a material impact on the Companys results of operations or financial condition.  Effective January 1, 2009, the Company adopted a new ASU regarding business combinations. As codified under ASC 805, this update requires an entity to recognize the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration at their fair value on the acquisition date. It further requires that acquisition-related costs be recognized separately from the acquisition and expensed as incurred; that restructuring costs generally be expensed in periods subsequent to the acquisition date; and that changes in accounting for deferred tax asset valuation allowances and acquired income tax uncertainties after the measurement period be recognized as a component of provision for taxes. The adoption did not have a material impact on the Companys financial statements.  Research andDevelopment Costs  Research and development costs, which relate primarily to the development, design and testing of products, are expensed as incurred, until such time as management determines the project will have a future use and at that time, such development costs are capitalized and amortized over their useful life.  Research and development expense, which are included in selling, general and administrative expenses, were $382 in 2010 and $30 for 2009.  NOTE 2 -GOING CONCERN  As reflected in the accompanying consolidated financial statements, the Company has an accumulated deficit of $9,047,352 at September 30, 2010, net losses in the nine month period ended September 30, 2010 of $741,131and cash used in operations during the nine month period ended September 30, 2010 of $373,990. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  The attainment of sustainable profitability and positive cash flow from operations is dependent on certain future events. These conditions raise substantial doubt about the Companys ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Management may attempt to raise additional funds by way of a public or private offering of its securities. While  12    the Company believes in the viability of its strategy to improve sales volume and its ability to raise additional funds, there can be no assurances to that effect.  Since its inception in 1996, the Company was involved in the development and sales of advanced scientific technologies. Sales of primarily momentum wheels through the years were sporadic but have been strong in 2010. The Companys limited financial resources have prevented the Company from aggressively advertising its products and services to achieve consumer recognition. The ability of the Company to continue as a going concern is dependent on the Companys ability to further implement its business plan to generate increased revenues and to raise additional funds.  The Company also seeks the acquisition, development, and commercialization of other advanced technologies. The ultimate success of the Company in attaining sustainable profitability and positive cash flow from operations is dependent upon the successful development and commercialization of these advanced technologies including the THOR and ODIN systems together with obtaining sufficient capital or financing to support management plans. Management believes that the actions presently being taken to further implement its business plan and generate additional revenues and to raise additional funds provide the opportunity for the Company to continue as a going concern.  NOTE 3 INCOME TAXES  There was no income tax expense for the nine month periods ended September 30, 2010 and 2009 due to the Companys net losses.  An income tax benefit has not been reflected during these periods due to an increase in the deferred tax asset valuation allowance.  The Company has net operating loss carryforwards for tax purposes. Utilization of the Company's net operating loss carryforwards may be limited based on changes in ownership as defined in Internal Revenue Code Section 382.  NOTE 4 - RELATED PARTY TRANSACTIONS  At September 30, 2010 the Company owed Louis J. Brothers, the Companys president and major shareholder, $192,108 for advances made to the Company. Such amount, which is included in the due to shareholders balance on the balance sheet at September 30, 2010 earns 6% annual interest quarterly, is unsecured and is due on demand. As of December 31, 2009, the Company owed Mr. Brothers the principal amount of $216,558 for advances made to the Company, plus accrued interest.  During the second quarter of 2010, the Company made a payment of $75,000 against the amounts owed to Mr. Brothers.  Of that payment $50,550 was applied to accrued but unpaid interest, and the remaining $24,450 was applied to reduce the principal amount owed to Mr. Brothers.  The Company has not made any further payments to Mr. Brothers with respect to this obligation.  On August 11, 2006, Coast to Coast Equity Group, Inc., loaned the Company $42,000 as described in Note 6.  During the third quarter of 2010, the Company made a payment of $49,134 against the amounts owed to Coast to Coast Equity Group, Inc.  Of that payment $7,134 was applied to accrued but unpaid interest, and the remaining $42,000 was applied to reduce the principal amount owed to Coast to Coast Equity Group, Inc.  NOTE 5 - DESCRIPTION OF LEASING ARRANGEMENTS  On September 1, 2006, the Company entered into a lease of 2,985 square feet of office space located at 50 E. River Center Boulevard, Suite 820, Covington, Kentucky. The term of the lease is for five years beginning on the first day of September, 2006 and ending on the last day of August, 2011.  Under the terms of the lease, the Company shall pay additional rent to cover operating expenses of the property at a pro rata share deemed to be 0.928%, which will total approximately $19,402 for the initial twelve months. These expenses are anticipated to increase at a 3% rate annually for the remaining term of the agreement.   13    On December 1, 2007, the Company entered into a lease of 2,700 square feet of warehouse space located at 1895 Airport Exchange Blvd, Building A, Erlanger, Kentucky. The term of the lease is for 37 months beginning on the first day of December, 2007 and ending on the last day of December, 2010.  Under the terms of the lease, the Company shall pay additional rent to cover operating expenses of the property of approximately $349 per month.  Rent expense for the nine months periods ended September 30, 2010 and 2009 was $48,670 and $53,991, respectively.  The following is a schedule of future minimum lease payments required under the lease as of September 30, 2010:  Period EndingSeptember 30  Amount2011  $ 49,669  NOTE 6  MARKETABLE SECURITIES  The cost and fair market value of marketable securities are as follows:


|                                     |   |                |   |                 |   |           
|------------------------------------ | - | -------------- | - | --------------- | - | ----------
|September 30, 2010                   |   | Amortized Cost |   | Unrealized Gain |   | Fair Value
|Available for sale equity securities | $ | 500,000        | $ | 2,440           | $ | 502,440   

Available for sale securities are carried in the financial statements at fair value.  Net unrealized holding gains on available-for-sale securities in the amount of $2,440 for the nine months ended September, 30, 2010 have been included in other comprehensive income.  Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and establishes a framework for measuring fair value.  GAAP establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date.  The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date.  The three levels are defined as follows:  Level 1  inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2- inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3  inputs to the valuation methodology are unobservable and significant to the fair value measurement.  A financial instruments categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.  At September 30, 2010, marketable securities consisted of an exchange traded bond fund that was measured using the Level 1 valuation hierarchy.  NOTE 7 - CONVERTIBLE DEBENTURE  On August 11, 2006, the Company issued a convertible debenture to Coast To Coast Equity Group, Inc. (CTCEG), in the amount of $42,000 in exchange for cash received.  This debenture matures upon the earlier of twelve months from the date of the closing of the merger between VFDS and CTCEG, which occurred on July 6, 2006, or upon the date of an event of default which would include any proceedings by VFDS to seek protection due to insolvency. On July 2, 2008, the Company and CTCEG agreed to extend the agreement until August 11, 2010.  The stated interest rate is 4% per annum.  14     During the thirdquarter of 2010, the Company made a payment of $49,134 against the amounts owed to Coast to Coast Equity Group, Inc.  Of that payment $7,134 was applied to accrued but unpaid interest, and the remaining $42,000 was applied to reduce the principal amount owed to Coast to Coast Equity Group, Inc.  NOTE 8  SHAREHOLDERS EQUITY AND WARRANTS  On July 6, 2006 the Company granted 3,000,000 Class A warrants in connection with a two-year consulting agreement beginning July 6, 2006 to CTCEG. These warrants granted in connection with the consulting agreement include the following provisions: 1,000,000 warrants to purchase 1,000,000 shares at an exercise price of $1.00 per share when the per share market value closes at or above $1.00 for up to two years from the effective date of the registration statement registering the underlying shares; 1,000,000 warrants to purchase 1,000,000 shares at an exercise price of $1.50 per share when the per share market value closes at or above $1.50 for up to two years from the effective date of the registration statement registering the underlying shares; and, 1,000,000 warrants to purchase 1,000,000 shares at an exercise price of $2.00 per share when the per share market value closes at or above $2.00 for up to two years from the effective date of the registration statement registering the underlying shares.  All of the Class A warrants expired on May 14, 2009.  During the period August 2006 through November 2006, the Company sold in private placement transactions 1,296,500 units at $1.00 per unit which consist of 1 share of common stock and 1 Class B warrant which can be exercised at $1.50 per share within 6 months from the effective date of a registration statement registering the units and the underlying shares reserved for the exercise of the warrants. A registration statement was required to be filed within 30 days from the date that the Company attains a shareholder base of 35 shareholders. This filing occurred on November 14, 2006 and was declared effective on May 14, 2007.  The Class B warrants contractual expiration date of November 13, 2007 has been extended several times by the board of directors, with the most recent extension occurring on December 23, 2008. The Class B warrants expired on April 4, 2009.  The Company established a price protection provision relating to the selling unit holders of the private placement securities named in the registration statement. The provision states that parties to the agreement are entitled to receive additional stock or warrants if the Company sells shares of stock or warrants for less than $1.00 per share of common stock and $1.50 per warrant prior to the time limitations specified which are one year from the effective date of the Registration Statement for common stock issued and six months from the effective date of the Registration Statement for warrants issued. The Company did not offer any additional securities that would have caused this provision to become effective prior to the applicable time limitations of the provisions, which expired in May 2008. Accordingly, the Company believes that the price protection provision will have no accounting impact.  Coast To Coast Equity Group, Inc., and Charles J. Scimeca, George Frudakis, and Tony N. Frudakis (formerly the shareholders of Quetzal Capital Funding 1, Inc.), were previously protected from dilution of their percentage ownership of the Company. Non-dilution rights, as defined by the registration rights agreement (incorporated by reference herein), mean that these parties shall continue to have the same percentage of ownership and the same percentage of voting rights of the class of the Companys common stock regardless of whether the Company or its successors or its assigns may thereafter increase or decrease the authorized number of shares of the Companys common stock or increase or decrease the number of shares issued and outstanding. The non-dilution rights, by the terms of the registration rights agreement, expired on May 14, 2009.  Language in prior filings inadvertently and mistakenly implied that these non-dilution rights had been extended until May 13, 2010, but no such extension was ever affected.  Common Stock Warrants  On July 3, 2008, the Company secured a financing arrangement with MKM Opportunity Master Fund, LTD ("MKM") an unaffiliated accredited institutional investor. The financing consists of a $500,000 Convertible Note, with a conversion price of $0.50 per share, bearing interest at the rate of 8% per year, payable on a quarterly basis and has a term of three years due on July 3, 2011. On September 29, 2008, the Company reduced the conversion price to $0.35 per share.  In connection with the financing, MKM was also issued Class C Warrants (the  15    "Warrants") to purchase up to 1,000,000 shares of the Company's common stock. The warrants were exercisable at an exercise price of $1.61 per share. In connection with this financing arrangement, the Company recorded an initial debt discount of $500,000 to be amortized over the term of the note and charged $250,685 to interest expense during the nine months ended September 30, 2010.  On September 29, 2008 the Company issued an additional 1,146,667 warrants at $0.75 pursuant to section 2(c) of the Class C warrant agreement.  Subsequently, on May 27, 2009, the Company reduced the exercise price of the MKM Class C warrants to $0.20 per share from $1.61 per share.  On March 22, 2010, MKM converted the note into 1,428,572 shares of common stock at a conversion price of $0.35 per share.  On June 30, 2010, the Company issued 1,951,515 shares of common stock following the cashless exercise of 2,146,667 Class C Warrants.  On September 29, 2008, the Company secured a financing arrangement with MKM and several securities purchasers unrelated toMKM. The financing consists of a $650,000 Convertible Note, with a conversion price of $0.35 per share, bearing interest at the rate of 8% per year, payable on a quarterly basis and has a term of three years due on September 29, 2011. In connection with the financing, MKM and other unrelated individuals were also issued Class D Warrants (the "Warrants") to purchase up to 1,857,146 shares of the Company's common stock. The warrants are exercisable atan exercise price of $0.75 per share. In connection with this financing arrangement, the Company recorded an initial debt discount of $650,000 to be amortized over the term of the note and charged $291,209 to interest expense during the period ended September 30, 2010.  Subsequently, on May 27, 2009, the Company reduced the exercise price of the MKM Class D warrants to $0.20 per share from $0.75 per share.  On September 29, 2009, the unrelated individual investors converted 428,571 shares of stock at a conversion price of $0.35 per share.  On February 16, 2010, the Company issued 271,429 shares of common stock following the exercise of 271,429 Class D Warrants and received $54,286 in cash.  On August 23, 2010, the Company issued 157,143 shares of common stock following the exercise of 157,143 Class D Warrants and received $31,429 in cash.  On March 22, 2010, MKM converted the remaining $500,000 note into 1,428,572 shares of common stock at a conversion price of $.35 per share.  On May 27, 2009 the Company issued 1,900,000 shares of common stock to MKM Capital Advisors and individual investors for $237,500 in cash.  In connection with the common stock purchase, MKM Capital Advisors and the individual investors were issued Class F Warrants to purchase up to 1,900,000 shares of the Companys common stock.  A total of $302,600 was expensed to these warrants using the Black-Scholes pricing model with the following assumptions: share price of $0.16; Strike price of $0.20 per share; Time to expiration (days) of 1,826; Expected volatility of 254.69%; no dividends; and an annual interest rate based on 3-month U.S. Treasury Bill of 2.72%.  In addition, on May 27, 2009, the Company reduced the exercise price of the MKM Class C warrants to $0.20 per share from $1.61 per share and the series D warrants to $0.20 per share from $0.75 per share.  On January 29, 2010, the Company issued 534,624 shares of common stock following the cashless exercise of 600,000 Class F Warrants.  On August 10, 2009 the Company issued 800,000 shares of common stock to individual investors for $100,000 in cash ($92,000 net of expenses).  In connection with the common stock purchase, the individual investors were issued Class G Warrants to purchase up to 800,000 shares of the Companys common stock.  A total of $143,623 was expensed to these warrants using the Black-Scholes pricing model with the following assumptions: share  16    price of $0.18; Strike price of $0.20 per share; Time to expiration (days) of 1,826; Expected volatility of 270.54%; no dividends; and an annual interest rate based on 3-month U.S. Treasury Bill of 0.19  On March 29, 2010, the Company issued 800,000 shares of common stock following the exercise of 800,000 Class G Warrants and received $160,000 in cash.  Stock warrant activity for the nine month period ended September 30, 2010 is summarized as follows:  WeightedaverageNumber   exerciseof shares   priceOutstanding at December 31, 2009  6,703,813  $ 0.20Granted  -   -Forfeited  -   -Exercised  (3,975,239)   0.20Outstanding at September 30, 2010  2,728,574  $ 0.20  The following table summarizes the Company's Class D and Class F stock warrants outstanding at September 30, 2010: Weighted   WeightedRange of      Average   AverageWarrant  Exercise      Remaining   ExerciseClass  Price   Number   Life   PriceD $ 0.20   1,428,574   5.00  $ 0.20F $ 0.20   1,300,000   3.75  $ 0.20
  NOTE 9  PROPERTY AND EQUIPMENT  The major classifications of equipment are summarized below:  September 30,   December 31,2010   2009Estimated Life   (unaudited)Office equipment                                             5 years  $ 99,061   $ 55,871Furniture and fixtures                                       7 years   49,564    49,564148,625    105,435Less accumulated depreciation   (78,604)    (64,477)$ 70,011   $ 40,958
  Depreciation expense for the nine months ending September 30, 2010 and 2009 was $14,137 and $10,353.  NOTE 10  CAPITALIZED DEVELOPMENT COSTS  The major classifications are summarized below:  September 30,   December 31,2010   2009(unaudited)Capitalized development costs  $ 322,181   $ 244,090Less accumulated amortization   (109,840)    (73,227)$ 212,341   $ 170,863
   17    The Company has incurred $78,091 of capitalized development costs still under construction and not amortized as of September 30, 2010.  Amortization expense for the nine months ending September 30, 2010 and 2009 was $36,613 and $25,084.  Capitalized development costs are being amortized over 5 years.  NOTE 11  LOAN FEES  The major classifications are summarized below:  September 30,   December 31,2010   2009(unaudited)Loan fees  $ 234,685   $ 234,685Less accumulated amortization   (234,685)    (104,842)$ -   $ 129,843
  Amortization expense for the nine months ending September 30, 2010 and 2009 was $129,843 and $58,671. Loan fees are being amortized over the terms of the loans which are 36 months. When a convertible note is converted to shares, any unamortized loan fees are expensed.  NOTE 12  ACCOUNTS PAYABLE  The Companys current accounts payable and accrued expenses include $13,690 borrowed on revolving credit lines utilizing corporate credit cards which bear interest at an average rate of 11.39% per annum and call for total minimum monthly installment payments of $58 as of September 30, 2010. However, since amounts may be due on demand and it is the Companys intent to pay such balances in their entirety during 2010, such amounts have been classified as current.  The remaining accounts payable and accrued liabilities consist of ordinary administrative expenses which were incurred in the operations of the Company and include $709,120 of trade accounts and accrued interest of $6,032 and other of $1,351.  NOTE 13  NOTES PAYABLE  On July 3, 2008, the Company secured a financing arrangement with MKM Opportunity Master Fund, LLC ("MKM") an unaffiliated accredited institutional investor. The financing consists of a $500,000 Convertible Note, with a conversion price of $0.50 per share, bearing interest at the rate of 8% per year, payable on a quarterly basis and has a term of three years due on July 3, 2011. On September 29, 2008, the Company reduced the conversion price to $0.35 per share.  In connection with the financing, MKM was also issued Class C Warrants to purchase up to 1,000,000 shares of the Company's common stock. The warrants were exercisable at an exercise price of $1.61 per share, but on May 27, 2009 the Company reduced the Class C Warrant exercise price to $0.20 per share. In connection with this financing arrangement, the Company recorded an initial debt discount of $500,000 to be amortized over the term of the note and charged $250,685 to interest expense during the nine months ended September 30, 2010.  On March 22, 2010, MKM converted the entire amount of the note into 1,428,572 shares of common stock at a conversion price of $0.35 per share.  On September 29, 2008, the Company secured a financing arrangement with MKM Opportunity Master Fund, LLC an unaffiliated accredited institutional investor and other unrelated individuals. The financing consists of a $650,000 Convertible Note, with a conversion price of $0.35 per share, bearing interest at the rate of 8% per year, payable on a quarterly basis and has a term of three years due on September 29, 2011. In connection with the financing, MKM and other unrelated individuals were also issued Class D  18    Warrants to purchase up to 1,857,146 shares of the Company's common stock. The warrants were exercisable at an exercise price of $0.75 per share, but on May 27, 2009 the Company reduced the Class D Warrant exercise price to $0.20 per share. In connection with this financing arrangement, the Company recorded an initial debt discount of $650,000 to be amortized over the term of the note and charged $291,209 to interest expense during the nine months ended September 30, 2010.  On September 29, 2009, the unrelated individual investors converted 428,571 shares of common stock at a conversion price of $0.35 per share.  On March 22, 2010, MKM converted the remaining $500,000 note into 1,428,572 shares of common stock at a conversion price of $0.35 per share.  The promissory notes are as follows:  September 30, December 31,2010 2009(unaudited)Notes payable $ 1,000,000 $ 1,150,000Less:  principal payments including conversions  1,000,000  150,000Notes payable outstanding at September 30, 2010 and December 31, 2009  -  1,000,000Less: unamortized discount on notes payable  -  (541,893)Notes payable, net  -  458,107Less current portion  -  -Notes payable, net of discount of $-0- and $541,893, less current portion $ - $ 458,107   NOTE 14  DEFERRED REVENUE  The Company has received $1,916,839 in cash for orders it intends to ship in the next six months.  Per the Companys revenue recognition policy (see note 1), the revenue will be recognized when goods have been shipped to the customer.  NOTE 15  ADVERTISING  Advertising costs are expensed as incurred. For the nine month periods ending September 30, 2010 and 2009, advertising expense was $60,944 and $123,420, respectively.  NOTE 16  STOCK GRANT   On August 1, 2009, the Board of Directors of the Company issued 25,000 shares of restricted common stock to an employee of the Company.  The Company incurred a $3,750 expense based on the closing price of the stock on August 1, 2009.  In 2009, the Board of Directors voted to compensate themselves in the form of restricted stock, based on 2,000 shares of restricted stock per month. Compensation commenced with respect to January 2009, but none was retroactive to 2008.  On or about October 7, 2009, each director (other than Lou Brothers and Larry Wilhide) received his entire stock award of 24,000 shares of restricted stock in one lump sum for payment of the entire years service, along with a $3,000 tax gross-up cash payment.  Neither Mr. Brothers nor Mr. Wilhide received any stock or cash compensation for his service as a director.  19     NOTE 17  STOCK OPTIONS  On September 3, 2010, the Company granted certain employees and others the option to purchase 4,050,000 shares of the Companys common stock at prices ranging from $1.35 - $1.49 per share.   The options vest 660,000 on September 3, 2010, 660,000 on January 1, 2011, 620,000 on January 1, 2012, 620,000 on January 1, 2013, 620,000 on, January 1, 2014, 620,000 on January 2, 2015, and 250,000 options will vest upon the completion of certain sales goals for ODIN and THOR, and are exercisable from then through a period of ten years from the grant date.  Management anticipates the average term of the options will be 10 years.  Using the Black-Scholes-Merton option pricing model, management has determined that the options have a value of $1.35.  For the nine months ended September 30, 2010 the Company recognized compensation cost of $890,999 and an income tax benefit has not been reflected due to an increase in the deferred tax asset valuation allowance. As of September 30, 2010, there was $4,576,500 of total unrecognized compensation cost relating to nonvested stock options.  That cost is expected to be recognized in the years ending December 31, 2011, 2012, 2013, 2014, and 2015 in the amounts of $891,000, $837,000, $837,000, $837,000 and $837,000, respectively, while $337,500 will be recognized upon the completion of certain sales goals for ODIN and THOR.  The assumptions used and the calculated fair value of the options are as follows:  Expected dividend yield   -0-Risk-free interest rate   2.72%Expected life in years   10Expected volatility   314.16%Weighted average of fair value of options granted   $1.35  The following is an analysis of options to purchase shares of the Companys stock issued and outstanding:


|                                              |  |               |   |                                
|--------------------------------------------- |  | ------------- | - | -------------------------------
|                                              |  | Total Options |   | Weighted Average Exercise Price
|Total Options outstanding, January 1, 2010    |  | -             |   | -                              
|Granted                                       |  | 4,050,000     | $ | 1.35                           
|Exercised                                     |  | -             |   | -                              
|Expired/cancelled                             |  | -             |   | -                              
|Total options outstanding, September 30, 2010 |  | 4,050,000     |   | 1.35                           
|                                              |  |               |   |                                
|Options exercisable, September 30, 2010       |  | 660,000       | $ | 1.35                           




|                                      |  |                   |   |                   
|------------------------------------- |  | ----------------- | - | ------------------
|                                      |  | Nonvested Options |   | Average Fair Value
|Nonvested options                     |  |                   |   |                   
|Nonvested options, January 1, 2010    |  | -                 | $ | -                 
|Granted                               |  | 4,050,000         |   | 1.35              
|Vested                                |  | 660,000           |   | 1.35              
|Forfeited                             |  | -                 |   |                   
|Nonvested options, September 30, 2010 |  | 3,390,000         | $ | 1.35              

At September 30, 2010, vested exercisable options were outstanding for 660,000 shares at an exercise price between $1.35 and $1.49.  The weighted average value of the options is $1.35.  These options all have a remaining term of 10 years and expire on September 2, 2020.  The 3,390,000 nonvested options will vest over the next five years excluding 250,000 which will vest upon completion of certain sales goals for ODIN and THOR.  20     NOTE 18  LITIGATION  The Company is involved in litigation arising in the ordinary course of business.  While the ultimate outcome of these matters is not presently determinable, it is the opinion of management that the resolution of outstanding claims will not have a material adverse effect on the financial position or results of operations of the Company.  NOTE 19  SUBSEQUENT EVENTS  We have evaluated the period from September 30, 2010 through the date the financial statements herein were issued for subsequent events requiring recognition or disclosure in the financial statements and we have identified the following event:  Common Stock  On October 28, 2010, the Board of Directors of the Company authorized the issuance of 60,000 shares of common stock, distributed equally to the five Board members who are not employees of the Company.  21    Item 2.  Managements Discussion and Analysis of Financial Condition and Results of Operations.  This Management's Discussion and Analysis or Plan of Operation (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements.  You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms.  These statements are only predictions. In evaluating these statements, you should specifically consider various factors, including the risk factors outlined below.  These factors may cause our actual results to differ materially from any forward-looking statements.  Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.  Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements.  We undertake no obligation to revise or update publicly any forward-looking statements for any reason.  We believe that the impact of inflation and changing prices on our net sales and revenues and on income from continuing operations has been inconsequential.  Liquidity and Capital Resources  Between January 1, 2010 and September 30, 2010, our capital requirements have largely been met through sales of products other than THOR or ODIN. We recorded sales of $13,029,461 from the sale of various products in the first three quarters of 2010.  We anticipate that income from sales of such products will be sufficient to finance our ongoing capital requirements in 2010. To the extent we make sales of ODIN or THOR systems in 2010, we expect to negotiate customer deposits sufficient to provide us with the working capital needed to build the related systems. The following liquidity events describe the amounts and sources of our capital resources and describe how we have paid our expenses.  We have incurred losses for the past two fiscal years and had a comprehensive loss of $738,691 for the nine months ended September 30, 2010.  Historically, we have relied on revenues, debt financing and sales of our common stock to satisfy our cash requirements. For the nine months ended September 30, 2010, we received cash proceeds of $11,790,688 from sales of various products, $1,058,439 from customer deposits, and $245,714 from amounts paid to exercise warrants resulting in the issuance of common stock.  For the year ended December 31, 2009 we received cash proceeds of $3,103,615 from revenues, $858,400 from deferred revenues and $337,500 from sales of our common stock. For the year ended December 31, 2008 we received cash proceeds of $123,400 from revenues, $343,000 from sales of our common stock and $1,260,000 in debt financing.  For the year ended December 31, 2007, we received cash proceeds from debt financing of $160,000 and sales of our common stock of $914,000.  For the nine months ended September 30, 2010 we issued 6,571,854 shares of our common stock.  For the year ended December 31, 2009 we issued 3,273,571 shares of our common stock.  For the year ended December 31, 2008 we issued 4,459,516 shares of our common stock. For the year ended December 31, 2007 we issued 659,333 shares of our common stock as payment for services. Management anticipates that we may continue to issue shares for expansion of our business in the short term.  Management intends to finance our 2010 operations primarily with the revenue from product sales.   Any cash shortfalls will be addressed through equity, debt financing or commercial loans, if available. Management expects revenues will be realized to support operations in 2010. We may need to continue to raise additional capital, both internally and externally, to cover cash shortfalls and to compete in our markets. These operating costs include cost of sales, general and administrative expenses, salaries and benefits and professional fees. We have sufficient contracts in place to meet our expected cash  22    requirements for 2010. We anticipate thatany capital raised in 2010 will be primarily for the purpose of expanding operations.  Commitments and Contingent Liabilities  The Company leases office and warehouse spaces in Covington, KY and Erlanger, KY under a five-year and 37 month non-cancelable operating lease, expiring August 2011 and December 2010, respectively. Base rent is $5,807 per month with an annual rent escalator of 3%. At December 31, 2009, future minimum payments for operating leases related to our office and manufacturing facilities were $90,152 through August 2011.  Our total current liabilities increased to $2,839,140 at September 30, 2010 compared to $2,334,561 at December 31, 2009. Our total current liabilities at September 30, 2010 included accounts payable and accrued expenses of $730,193, deferred revenue of $1,916,839, and a loan from shareholder of $192,108.  Results of Operations  The following discussions are based on the unaudited condensed consolidated financial statements of Valley Forge Composite Technologies and its subsidiaries. These charts and discussions summarize our financial statements for the nine months ended September 30, 2010, and 2009, and should be read in conjunction with the financial statements, and notes thereto, included with the Companys Form 10-Q for the nine months ended September 30, 2010.  SUMMARY COMPARISON OPERATING RESULTS**Nine months ended September 30,****** **** **2010** **** **2009**Gross Profit $ 1,920,433 $ 93,700Total operating expenses  2,172,214  1,334,699Income (loss) from operations  (251,781)  (1,240,999)Total other income (expense)  (489,350)  (478,052)Net loss  (741,131)  (1,719,051)Other comprehensive income  2,440  -Comprehensive loss $ (738,691) $ (1,719,051)Net loss per share $ (0.01) $ (0.03)  To date, no revenues have been attributable to sales from ODIN or THOR LVX.  All sales for the first nine months of 2010 have been for aerospace products.  Our operating expenses have generally increased for the nine months ended September 30, 2010, compared with the nine months ended September 30, 2009.  The major component of our operating expenses consisted of selling and administrative expenses and warrant expense.  For the nine months ended September 30, 2010 and 2009, our selling and administrative expenses were $2,172,214 and $888,476, which included stock option compensation expense of $890,999 and $-0-; and the warrant expense was $-0- and $446,223.  The Company recognizes revenue when persuasive evidence of a customer or distributor arrangement exists, shipment of goods to the customer occurs, the price is fixed or determinable and collection is reasonably assured.  For future sales of ODIN and THOR, it is expected customer acceptance, which may include testing, will also be required for revenue recognition.   The following chart provides a breakdown of our sales in 2010 and 2009.   23     September 30,  September 30,2010  2009Valley Forge Detection Systems, Inc. $ -  $ -Valley Forge Aerospace, Inc.  13,029,461   315,000Valley Forge Imaging, Inc.  -   -Valley Forge Emerging Technologies, Inc.  -   -Totals per financial statements: $ 13,029,461  $ 315,000  Our total operating expense was $2,172,214 and $1,334,699 for the nine months ended September 30, 2010 and 2009.  Our average monthly cost of operations from January 2010 through September 2010 was $241,357. Excluding aggregate non-cash charges of $180,593 for amortization and depreciation, $541,893 for amortization of debt discount and $890,999 for option compensation, our average monthly cost of operations from January 2010 through September 2010 was $62,081.  As of September 30, 2010, we had $676,129 in cash remaining as well as $502,440 of marketable securities.  At this rate, and barring any material changes to our capital requirements, we anticipate being able to sustain our operations for ten months, at which time we will have to obtain additional capital funding in the absence of obtaining additional cash from other sources. Our ability to sustain ourselves on our current cash position depends almost entirely on: (1) how long the government approval process may take and how high the initial market demand is for the THOR system, and (2) how long it takes to realize revenue from any sales of ODIN units; and (3) whether additional cash infusions are obtained via the exercise of outstanding warrants or from other sources or continued sales of our standard products. While the receipt of purchase orders for THOR units will dictate our major production needs, the timing of the government approval process is largely out of our control. Likewise, in the fourth quarter of 2009, we placed a unit with ODIN components in a foreign country for the purpose of demonstration and sales. We do not have a forecast of how long it may take to realize revenues from any sales of such units.  Other than for general operational and payroll expenses, which may also include the payment of additional research and development and marketing expenses, the Companys day-to-day operations are not expected to change materially until such time as we obtain the necessary government approvals to commence production and then the delivery of the first commercial THOR devices or sales orders for any ODIN units. We do not anticipate having significant additional research and development expenses during the next twelve months, but such expenses may be necessary to facilitate the obtaining of U.S. Government approvals before we can commence production of the THOR system or to facilitate the execution of new contracts.  In the coming months, the Company will refine its estimates of its capital requirements based on any quantities of THOR and ODIN units ordered and the terms of any license the Company is able to negotiate with Lawrence Livermore National Laboratories.  See the discussion in Item 5, Other Information.  Subsequent Events  Common Stock  On October 28, 2010, the Board of Directors of the Company authorized the issuance of 60,000 shares of common stock, distributed equally to the five Board members who are not employees of the Company.     24    Description of Critical Accounting Policies and Estimates, Going Concern, and Fair Value of Financial Instruments  This section of our Form 10-Q contains a description of our critical accounting policies as they pertain to: the Companys business as a going concern, our use of estimates, our fair valuation of financial instruments, our revenue recognition policy, and to the effect on our financial statements of recent accounting pronouncements.  A more comprehensive discussion of our critical accounting policies, and certain additional accounting policies, can be found in Note 1 to the financial statements.  Critical Accounting Policies and Estimates  The accompanying consolidated financial statements have been prepared by the Company. The Companys financial statements are consolidated with the results of its subsidiaries.  All material inter-company balances and transactions have been eliminated.  Our financial statements have been prepared according to accounting principles generally accepted in the United States of America.  In preparing these financial statements, we are required to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities.  We evaluate these estimates on an on-going basis.  We base these estimates on historical experiences and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities.  Actual results may differ from these estimates under different assumptions or conditions.  At this point in our operations, subjective judgments do not have a material impact on our financial statements except as discussed in the next paragraph.  Going Concern  The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  The attainment of sustainable profitability and positive cash flow from operations is dependent on certain future events.  Use of Estimates  In preparing financial statements in conformity with generally accepted accounting principles, Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period.  Actual results could differ from those estimates.  Fair Value of Financial Instruments  The Companys financial instruments consist of cash, marketable securities, security deposits, amounts due to shareholders, accounts payables, and a convertible debenture.  Except as discussed in Note 6, the carrying values of these financial instruments approximate the fair value due to their short term maturities.  Revenue Recognition  The Company recognizes revenue when persuasive evidence of a customer or distributor arrangement exists, shipment of goods to the customer occurs, the price is fixed or determinable and collection is reasonably assured.  For future sales of ODIN and THOR, it is expected customer acceptance, which may include testing, will also be required for revenue recognition.    25     Recent Accounting Pronouncements  The Company does not believe that recent accounting pronouncementswill have a material effecton the content or presentation of its financial statements.  The Company does not believe that any other recently issued, but not yet effective accounting standards will have a material effect on the Companys consolidated financial position, results of operations or cash flows.  Off-Balance Sheet Arrangements  The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Companys financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.  Contractual Obligations  As a smaller reporting company as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.  Item 3. Quantitative And Qualitative Disclosures About Market Risk  As a smaller reporting company as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.  Item 4T. Controls And Procedures  Disclosure Controls and Procedures  Under the supervision and with the participation of our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Exchange Act, as of September 30, 2010 (the "Evaluation Date"). Based on this evaluation, our principal executive officer and principal financial officer concluded as of the Evaluation Date that our disclosure controls and procedures were effective such that the information relating to the Company, including our consolidated subsidiaries, required to be disclosed in our SEC reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) is accumulated and communicated to management, including our principal executive officer/principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.  Our management, including our chief executive officer and chief financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurancethat all control issues and instances of fraud, if any, within the Company have been detected.  Management's Report on Internal Control over Financial Reporting  Our management is responsible for establishing and maintaining adequate control over financial reporting (as defined in Rule 13a-15(f) promulgated under the Exchange Act. Our management assessed the effectiveness of our internal control over financial reporting as of September 30, 2010. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of  26    the Treadway Commission ("COSO") in Internal Control-Integrated Framework. Our management has concluded that, as of September 30, 2010, our internal control over financial reporting is effective based on these criteria.  Changes in Internal Control over Financial Reporting  Our management has also evaluated our internal control over financial reporting, and there have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date of our last evaluation.  The Company is not required by current SEC rules to include, and does not include, an auditor's attestation report. The Company's registered public accounting firm has not attested to Management's reports on the Company's internal control over financial reporting.  PART II  OTHER INFORMATION  Item 1. Legal Proceedings  William A. Rothstein vs. Valley Forge Composite Technologies, Inc., a Florida corporation, and Louis J. Brothers, Civil Action No. 09-0918071 Toomey (UT 3d Jud. Dist.)  On October 30, 2009, the Company and its president and director Louis J. Brothers were both named as defendants in a civil complaint filed on that date in the Third Judicial District Court in and for Salt Lake County, Utah by shareholder William A. Rothstein. The complaint has been served on Mr. Brothers and the Company. The five-count complaint alleges that the defendants committed fraud, violated the Utah Uniform Securities Act (Ut. Code Ann. §61-1-1, et seq.), made negligent misrepresentations, breached a fiduciary duty to shareholders, and breached a settlement agreement and seeks unspecified compensatory and punitive damages and attorneys fees.  The complaint alleges that Mr. Brothers misrepresented the timetable in which the Companys THOR LVX technology would receive government approvals and the number of Department of Energy employees working on the THOR project and thereby induced plaintiffs to invest in the Companys securities in 2006.  The Company and Mr. Brothers filed a motion to dismiss the complaint based upon the Utah courts lack of personal jurisdiction over the Company and Brothers.  Plaintiff has replied to the motion to dismiss.  The Honorable Judge Kate Toomey has scheduled an evidentiary hearing on the motion to dismiss for December 6, 2010.  The Company cannot provide any assurances on the outcome of the hearing or the matter in general.  Coast To Coast Equity Group, Inc. vs. Valley Forge Composite Technologies, Inc., a Florida corporation, and Lou Brothers, Civil Action No. 090A-11229 (Fla. 12 th Jud. Cir.) On November 11, 2009, the Company and its president and director Louis J. Brothers were served with a civil complaint naming both of them as defendants. The complaint was filed on or about October 28, 2009 in circuit court in Manatee County, Florida by shareholder and creditor Coast To Coast Equity Group, Inc.  ("CTCEG") The complaint alleges that the defendants breached a consulting services agreement by not reimbursing plaintiff for $44,495.18 in expenses, committed fraud, pleaded for the rescission of a standby equity agreement in the amount of $500,000, violated the Florida Securities and Investor Protection Act (Fla. Stat. §517.301), made negligent misrepresentations, and breached a fiduciary duty to shareholders and seeks damages in excess of $15,000 and attorney's fees.  As it pertains to non-contract claims, the complaint alleges that Mr. Brothers misrepresented the distribution rights that the Company had to its ODIN product and misused plaintiff's proceeds which were to be allocated towards the purchase of an ODIN unit  A Motion to Dismiss was filed in response to the Complaint.  A Consent Order was entered on Jan. 14, 2010, allowing CTCEG to file an Amended Complaint.  A Motion to Dismiss was filed in response to the Amended Complaint.  On May 20, 2010, the Court granted CTCEG leave to file a third amended complaint, which abandons the claims in the original complaint except for breach of contract based on allegations of failure to pay expenses under the above referenced consulting agreement.  The First Amended Complaint ("Complaint") alleges failure to pay a $42,000 promissory note payable to CTCEG.  27    The Complaint also contains a claim for, breach of the 2006 Warrant Agreement in that the Company failed to issue stock for warrants which the Company contends expired in May, 2009.  The Complaint contains a claim for promissory estoppel, alleging that Mr. Brothers orally, and in SEC filings, agreed to extend the Warrant Agreement and is estopped to deny such promises.  A claim for non-dilution damages is also included, based on allegations that the 2006 Registration Rights Agreement was also extended to May 2010 and CTCEG is therefore entitled to have additional shares issued because the Company sold additional stock in 2008 and 2009.  The Complaint contains a claim for promissory estoppel, alleging that Mr. Brothers orally, and in SEC filings, agreed to extend the Registration Right Agreement and is estopped to deny such promises.  The last claim is for tortious interference with a contractual relationship, alleging Mr. Brothers, presumably in his individual capacity, interfered with CTCEG's contractual rights under the Warrant Agreement, Registration Rights Agreement and Consulting Agreement.  The Company and Mr. Brothers deny all allegations and have filed an Answer and Affirmative Defenses; raising numerous defenses to the claims.   They also intend to file applicable counterclaims and possible third party claims, but they cannot provide assurances as to the outcome of the matter.  George Frudakis vs. Valley Forge Composite Technologies, Inc., a Florida corporation, and Lou Brothers, Civil Action No. 2010 CA-04230  (Fla. 12 th Jud. Cir.)  On or about May 7, 2010, George Frudakis commenced the above titled action against the Company and Lou Brothers.  The Compliant sets forth the exact same causes of action as in the Coast to Coast Equity Group, Inc. vs. Valley Forge Composite Technologies, Inc. and Lou Brothers, described above, with the exception that the Frudakis matter does not include a claim for breach of contract based upon the Consulting Agreement.  The Company and Brothers deny all allegations and have filed a motion to dismiss the complaint and a motion to consolidate the Frudakis and Coast to Coast cases into a single proceeding.  The Court has granted a motion to consolidate the cases for discovery purposes and has reserved as to consolidation for trial.   The Company and Lou Brothers intend to file appropriate Affirmative Defenses and Counterclaims, and possible third-party claims, in the event the Court denies the Motion to Dismiss.  However, the Company cannot provide assurances as to the outcome of the matter.  Arbitration Claim filed by Advanced Technology Development, Inc.  During the period between July 9th and 13th, the Company, Louis J. Brothers and Larry K. Wilhide were served by mail courier with a Statement of Claim (Statement) filed with the American Arbitration Association by Advanced Technology Development, Inc. (ATD).  Summarizing in general terms, ATDs arbitration claims one through four are based upon allegations the Company failed to perform or pay ATD for goods pursuant to two separate supply contracts. Claims five through eight are based upon the Companys activities in the promotion and sale of the ODIN imaging device.  Claims nine through thirteen are based upon the Companys alleged misuse of ATDs ULDRIS mark.  The final claim seeks injunctive relief.  The nature of the claims is discussed in greater detail in the Subsequent Events discussion of the Companys Form 10-Q filed for the second quarter of 2010.  The parties agreed to the appointment of Phillip D. ONeil, Jr. as the Sole Arbitrator and are presently conducting limited discovery in accordance with arbitration rules.  The arbitration hearing is scheduled for February 28, 2011.  28     Item 2. Unregistered Sales Of Equity Securities And Use Of Proceeds  During the first three quarters of 2010, the Company issued shares of common stock, as listed below, pursuant to various exercises of outstanding warrants and conversion of outstanding convertible notes:  · On January 29, 2010, the Company issued 534,624 shares of common stock pursuant to the cashless exercise of 600,000 Class F warrants.  · On February 16, 2010, the Company issued 271,249 shares of common stock pursuant to the exercise of 271,249 Class D Warrants.  · On March 22, 2010, the Company issued 2,857,144 shares of common stock pursuant to the conversion of $1,000,000 principal amount of convertible notes at a conversion price of $0.35 per share.  · On March 29, 2010, the Company issued 800,000 shares of common stock pursuant to the exercise of 800,000 Class G Warrants.  · On June 30, 2010, the Company issued 1,951,515 shares of common stock pursuant to the cashless exercise of 2,146,667 Class C warrants.  · On August 23, 2010, the Company issued 157,143 shares of common stock pursuant to the exercise of 157,143 Class D warrants.  Item 3. Defaults Upon Senior Securities  None.  Item 4. [REMOVED AND RESERVED]  Item 5. Other Information  In July 2010, Lawrence Livermore National Laboratory (LLNL) issued its final report (Report) pursuant to the Cooperative Research and Development Agreement (CRADA) between LLNL and the Company.  The CRADA involves the development of an accelerator-detector complex which is the basis for the Companys THOR LVX product.  LLNL did not publically release the Report, but authorized the Company to issue a July 12, 2010 press release concerning the systems performance, which states, in part:  Technical objectives of the project included the development and automation of the accelerator-detector complex for high efficiency detection of hidden explosives. Data acquisition and a photonuclear signature database were created. The system was operated and tested albeit on a limited sample size. A technique for the time analysis of signals from latent targets was developed and tested. This resulted in the positive identification of carbon and/or nitrogen. These techniques detected measurable decay from the radioisotopes formed upon irradiation.  The CRADA terms require LLNL to negotiate the terms of a technology license to the Company following the issuance of the Report.  LLNL is preparing patent applications, a necessary action before license terms can be negotiated.  29     Item 6. Exhibits  The following exhibits are filed herewith:  (a) Exhibits


|            |                                                      
|----------- | -----------------------------------------------------
|            |                                                      
|Exhibit No. | Description                                          
|31.1**      | 13a-14(a)-15d-14(a) Certification - Louis J. Brothers
|31.2**      | 13a-14(a)-15d-14(a) Certification - Louis J. Brothers
|32.1**      | 18 U.S.C. § 1350 Certification - Louis J. Brothers   
|32.2**      | 18 U.S.C. § 1350 Certification - Louis J. Brothers   

**  Filed herewith  30     SIGNATURES  Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


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|                        |                                           |                                                                                         | 
|                        | VALLEY FORGE COMPOSITE TECHNOLOGIES, INC. |                                                                                        
|                        |                                           |                                                                                         | 
|Date: November 15, 2010 | By:                                       | /s/ Louis J. Brothers                                                                   | 
|                        |                                           | Louis J. Brothers                                                                       | 
|                        |                                           | President, Secretary and Treasurer (Principal Accounting Officer and Authorized Officer | 

31