U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

                 ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   For the Fiscal Year Ended January 31, 2007

                        Commission File Number 333-124304


                             MILK BOTTLE CARDS INC.
             (Exact name of registrant as specified in its charter)

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<CAPTION>
<S>                                                <C>                     <C>
          Nevada                                   2771                    20-1904354
(State or other jurisdiction               (Primary Standard             (IRS Employer
of incorporation or organization)      Industrial Classification       Identification No.)
                                              Code Number)
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                          127 East 18th Ave., Vancouver
                        British Columbia, Canada, V5V 1E4
                             Telephone 604 733 6194
                                Fax 604 733 6195
    (Address, including zip code, and telephone number, including area code,
                  of registrant's principal executive offices)

Check whether the issuer is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act. [ ]

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). [X]

As of January 31, 2007, the registrant had 3,000,000 shares of common stock,
$0.001 par value, issued and outstanding. No market value has been computed
based upon the fact that no active trading market had been established as of
January 31, 2007.

DOCUMENTS INCORPORATED BY REFERENCE
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                               TABLE OF CONTENTS

PART I
Item 1.  Description of Business                                               3
Item 2.  Description of Property                                              12
Item 3.  Legal Proceedings                                                    12
Item 4.  Submission of Matters to a Vote of Securities Holders                12

PART II
Item 5.  Market for Common Equity, Related Stockholder Matters and
          Small Business Issuer Purchases of Equity Securities                12
Item 6.  Management's Discussion of Analysis or Plan of Operation             13
Item 7.  Financial Statements                                                 19
Item 8.  Changes in and Disagreements With Accountants on
          Accounting and Financial Disclosure                                 28
Item 8A. Controls and Procedures                                              28

PART III
Item 9.  Directors, Executive Officers, Promoters and Control Persons         28
Item 10. Executive Compensation                                               29
Item 11. Security Ownership of Certain Beneficial Owners and
          Management and Related Stockholder Matters                          30
Item 12. Certain Relationships and Related Transactions                       31
Item 13. Exhibits                                                             31
Item 14. Principal Accountant Fees and Services                               31

Signatures                                                                    31

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                                     PART I

ITEM 1 - DESCRIPTION OF BUSINESS

PRINCIPAL PRODUCTS OR SERVICES AND MARKETS

GENERAL INFORMATION

Milk Bottle Cards Inc. was incorporated under the laws of the State of Nevada on
November 19, 2004 for the purpose of producing, distributing and marketing a
collection of greeting cards. We have commenced operations and the development
of our greeting card business. We maintain our business office at 127 East 18th
Ave., Vancouver, British Columbia, V5V 1E4 Canada, in the home of Nicole
Milkovich, our President, which we use on a rent-free basis.

As of January 31, 2007 we had generated $476 in revenues. We have been issued an
opinion by our auditor that raises substantial doubt about our ability to
continue as a going concern based on our current financial position.

We have a total of 100,000,000 authorized common shares with a par value of
$0.001 per share and 3,000,000 common shares issued and outstanding as of
January 31, 2007.

We have completed a form SB-2 Registration Statement under the Securities Act of
1933 with the U.S. Securities and Exchange Commission registering 1,000,000
shares of our common stock in connection with an offering of the 1,000,000
shares at a price of $0.025 per share. As of September 20, 2005, we completed
the offering and raised a total of $25,000 on the issuance of the 1,000,000
shares.

On January 5, 2006 our common stock shares were approved for trading on the
Over-the-Counter Bulletin Board under the symbol MBTL.

INDUSTRY BACKGROUND

The custom of sending greeting cards can be traced back to the ancient Chinese,
who exchanged messages of good will to celebrate the New Year, and to the early
Egyptians, who conveyed their greetings on papyrus scrolls. Handmade paper
greeting cards were being exchanged in Europe sometime in the 13th Century. The
Germans are known to have printed New Year's greetings from woodcuts as early as
1400, and handmade paper Valentines were being exchanged in various parts of
Europe in the early to mid-1400s. By the 1850s, the greeting card had been
transformed from a relatively expensive, handmade and hand-delivered gift to a
popular and affordable means of personal communication, due largely to advances
in printing and mechanization, as well as the introduction of the postage stamp.

Louis Prang, a German immigrant who started a small lithographic business near
Boston in 1856, is generally credited with the start of the greeting card
industry in America. In 1875, he introduced the first complete line of Christmas
cards to the American public but by the 1890s, cheap imitative import cards
entered the American market, eventually forcing Prang to abandon his greeting
card publishing business.

In the early 1900s, the domestic business climate for greeting cards increased
and a number of today's leading publishers were founded. Following World War I,
new publishers continued to enter the field and increased competition produced

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important innovations in printing processes, art techniques and decorative
treatments for greeting cards. During World War II, the greeting card industry
flourished during the war effort, helping the government sell war bonds and
providing cards for the soldiers overseas.

Since the 1980s, alternative cards - cards not made for a particular holiday or
event - gained in popularity. Explosive growth in electronic technology, and the
adoption of the Internet, gave birth to the electronic greeting card or "E-card"
in the late 1990s. The development of this entirely new medium for card-sending
served to further expand the industry, producing new E-card publishers as well
as E-greeting card offerings by traditional greeting card publishers.

PRINCIPAL PRODUCTS AND THEIR MARKETS

We intend to operate our business in a two-pronged manner. We produce quality
handmade greeting cards and then sell those products through a variety of
distribution channels, both wholesale and retail.

We retail our greeting card line through an online store on our website at
www.milkbottlecards.com, at craft shows and home parties. We also wholesale our
greeting cards to small gift and card stores and flower stores, either by
selling direct or by consigning cards to them. We launched our website on May
15, 2005 and currently have an online store.

INITIAL GREETING CARD LINE

Our greeting card collection falls into two categories: (1) everyday greeting
cards, including Birthday, Anniversary and Get Well; and (2) seasonal cards,
including Christmas, Valentine's Day, Mother's Day and Father's Day. In
addition, we produce hand painted blank greeting cards so the purchaser is able
to customize the card to any occasion. We are continually working on new card
designs to keep our offering fresh.

We believe that our printed greeting cards are unique and appealing, because we
use different types of paper stock in the manufacturing of the cards than are
currently seen in the marketplace. In addition, we cut and paste together the
different types of paper stock, as well as use other design features: bows,
ribbons, buttons and other decorative trinkets that we feel gives the cards an
appealing and unique appearance. Each of our hand painted cards is individually
painted and is unique with the use of different paper stock, color and tonal
selection, as well as design.

We currently manufacture our cards in two ways -- Printed and Hand Painted. The
printed cards are printed in our office using an ink-jet printer and sprayed
with a sealer to protect the surface. The hand painted cards is painted on
high-quality watercolor paper. The approximate cost of producing an average card
will be $1.00 to $1.40, depending on which technique is used. This cost is
expected to drop once we start to purchase supplies in larger quantities. We
currently sell our cards to retailers for $2.50 to $3.50, resulting in a retail
price to the end consumer of $4.95 to $6.95 each, which is competitively priced
within the industry. We will maintain this retail price range of $4.95 to $6.95
per card when selling direct to the consumer through our website, craft shows
and through home parties. The cards are stamped on the back with our company
logo and website address to ensure a unique feel of the product and a brand
awareness, which we hope will eventually lead customers to our website for
repeat sales. The cards are individually wrapped in cellophane sleeves with
coordinating envelopes.

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Printed Cards are limited edition printed greeting cards. The technique for
these cards is for the design to be collaged, scanned and then printed in small
batches for a series of cards based on the trends of the seasons; utilizing
different colors, patterns, textures and themes.

Hand Painted Cards are one-of-a-kind designed cards painted on high quality
watercolor paper, with matching envelopes.

We will continue to experiment with different card-making techniques and
materials, varying the themes, patterns and colors that we feel the public will
want to purchase. As new designs are developed, new cards will be added to our
collection, while poor selling cards will be eliminated.

MARKET ANALYSIS

Initially, we are endeavoring to sell our greeting cards regionally throughout
the Vancouver area of British Columbia, Canada. We wholesale and/or consign our
line to gift stores, card stores and flower stores.

We will continue to identify distinct establishments that cater to higher income
individuals who are interested in buying greeting cards that are hand made,
unique in design and that are not mass produced. In addition to extensively
marketing and establishing a presence in the Vancouver area, we also sell our
greeting cards over the Internet, thereby increasing the possibility of
expanding our geographic markets throughout North America.

COMPETITION

Competition for our greeting card collection comes from two distinct groups of
producers of greeting cards. The first group is the large multinational
corporations who have traditionally mass produced greeting cards for the
consumer market and are the leaders in the industry. The second group contains
smaller companies focusing on different niche segments within the greeting card
market, as well as individuals or small organizations producing small volumes of
hand made greeting cards.

Our major competitors are the large multinational greeting card companies, which
include Hallmark Cards Inc., American Greetings Corporation, Taylor Corporation,
123greetings.com Inc. and CSS Industries, Inc. These companies tend to mass
produce greeting cards for the consumer market and have been quite successful in
doing so. In addition to traditional paper based greeting cards, many of these
companies have developed divisions that provide online greeting cards, wedding
invitations, birth announcements, etc., as well as different seasonal offerings
that might include gift wrap, ribbons and bows. These companies have extensive
resources for development, manufacturing, marketing, distribution and sales of
their greeting card collections and associated product offerings. While these
multinationals mass produce and distribute their cards throughout North America,
we believe that there is still room in the industry to target market those
consumers who do not want mass produced greeting cards, but would rather have a
more unique and hand made greeting card.

There are also a large number of individuals and small organizations producing
small volumes of hand made greeting cards for distribution and sale to specialty
shops, including card and gift shops, flower shops as well as through the
Internet. There are no significant barriers to entry into the greeting card
industry, virtually any motivated individual could commence a business and start
designing, manufacturing and selling greeting cards immediately. We feel that we

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can successfully compete in this small, handmade segment of the industry quite
effectively with our unique, handmade card designs and verses.

We believe that the key factors for our success will be to design a unique and
appealing collection of greeting cards, utilize quality paper and competitive
pricing. We also focus on selling our greeting cards to markets we target that
specialize in carrying handmade and specialty greeting cards. Establishing the
"Milk Bottle Cards" brand name will be essential to the success of our company.
We will need to continually reinforce to the consumer that our greeting cards
are unique, high quality, of good value and are readily available for purchase.
We believe that consumers will develop into repeat customers if we can continue
to deliver on these key factors. By aggressively focusing on several different
sales channels, we feel that we will be able to build up our brand name, which
will assist us in competing in the very competitive greeting card industry.

SALES AND DISTRIBUTION METHODS

We market our products both to wholesale and retail distributors in a number of
different ways. We have focused initially on targeting and wholesaling, or
consigning, when necessary to familiarize customers with our brand name, to
small gift shops, card stores and flower stores. We will continue to market via
the online Internet store on our website at www.milkbottlecards.com.

Using direct marketing and sales, we sell our product to small gift shops, card
stores and flower stores. As the market for greeting cards is quite competitive,
we feel that we may initially have to offer consignment terms to potential
customers. Once we start to establish our brand name, however, and begin
generating revenues, we will be in a stronger position and will no longer need
to offer consignment terms for our cards.


We intend to use our website as not only an online store, but a marketing tool
as well. The website contains pictures and information about all of our greeting
cards. We will attempt to strategically place the website on many different and
popular search engines. We will attempt to drive traffic to our website using
direct email marketing campaigns, starting with friends, family and business
associates. Our greeting cards will be wrapped in clear plastic covers and
stickers with Milk Bottle Cards used to seal them. This will continue to
reinforce the Milk Bottle Cards brand name and be consistent with the website.

SOURCES AND AVAILABILITY OF PRODUCTS

We currently purchase our supplies from two primary sources: CardBlanks.com, of
Victoria, British Columbia, and Opus Framing of Vancouver, British Columbia. We
do not have any written contracts with these suppliers and are on a cash
purchase basis at this time. Once our business is better established and our
inventory increases, we intend to shop for better prices based on larger lot
purchases of paper and inks used in our card making process. All of the
materials and supplies used in our card making process are readily available
from many different suppliers and, if and when necessary, we will be able to
substitute our current suppliers if certain supplies we need are unavailable or
if we are able to obtain better quality and better prices for the supplies we
use.

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EQUIPMENT

Ms. Nicole Milkovich, an officer and director, currently provides the usage of
computer and technical equipment for the development and manufacturing of the
greeting card collection, on a rent-free basis. This equipment consists of an
Apple Macintosh PowerBook G4 computer, an Epson Ink Jet printer and an Agfa
scanner. We are responsible for purchasing all the assorted inks, paper and
supplies associated with the development of the greeting cards and reimburse Ms.
Milkovich for such costs and expenses incurred on our behalf.

PATENTS AND TRADEMARKS

We do not currently have any patent or trademark protection. If we determine it
is feasible to file for such trademark protection, we still have no assurance
that doing so will prevent competitors from using the same or similar names,
marks, concepts or appearance.

GOVERNMENT AND INDUSTRY REGULATION

Regulation of Internet - Websites are not currently subject to direct federal
laws or regulations applicable to access, content or commerce on the Internet.
However, due to the increasing popularity and use of the Internet, it is
possible that a number of laws and regulations may be adopted with respect to
the Internet covering issues such as:

     *   user privacy
     *   freedom of expression
     *   pricing
     *   content and quality of products and services
     *   taxation
     *   advertising
     *   intellectual property rights
     *   information security

The adoption of any such laws or regulations might decrease the rate of growth
of Internet use, which in turn could decrease the demand for our services,
increase the cost of doing business or in some other manner have a negative
impact on our business, financial condition and operating results. In addition,
applicability to the Internet of existing laws governing issues such as property
ownership, copyrights and other intellectual property issues, taxation, libel,
obscenity and personal privacy is uncertain. The vast majority of the laws were
adopted prior to the advent of the Internet and related technologies and, as a
result, do not contemplate or address the unique issues of the Internet and
related technologies.

We will abide by all copyright laws and will ensure that any copyrighted
information that is provided on our website or included in any or our greeting
card offerings has received approval from the source of the copyright
information. When using the information provided or refurbished from other
sources and to protect us from any potential intellectual property claims, we
will endeavor to obtain all necessary consents prior to the use of the sources
and will reference the sources to give full credit where it is due.

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EMPLOYEES AND EMPLOYMENT AGREEMENTS

At present, we have no employees, other than, Nicole Milkovich and Carlos
Bolbrugge, our officers and director, who will not be compensated for their
services until such time as we become profitable. At such time, our Board of
Directors will determine the amount of compensation that will be paid to our
officers and directors, if any. Ms. Milkovich devotes approximately 20 hours per
week of her time to our operations and Mr. Bolbrugge devotes approximately 5
hours per week. Nicole's duties will be to handle our day-to-day operations and
Carlos assists Nicole on an as-needed basis. Ms. Milkovich and Mr. Bolbrugge do
not have employment agreements with us. We presently do not have pension,
health, annuity, insurance, stock options, profit sharing or similar benefit
plans; however, we may adopt plans in the future. There are presently no
personal benefits available.

REPORTS TO SECURITY HOLDERS

We provide an annual report that includes our audited financial information to
our shareholders upon written request. We make our financial information equally
available to any interested parties or investors through compliance with the
disclosure rules of the Securities Exchange Act of 1934. We are subject to
disclosure filing requirements including filing a Form 10-KSB annually and Form
10-QSB quarterly. In addition, we will file Form 8-K and other proxy and
information statements from time to time as required. We do not intend to
voluntarily file the above reports in the event our obligation to file such
reports is suspended under the Exchange Act.

The public may read and copy any materials that we file with the Securities and
Exchange Commission, ("SEC"), at the SEC's Public Reference Room at 100 F
Street, N.E., Washington, DC 20549. The public may obtain information on the
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The
SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy
and information statements, and other information regarding issuers that file
electronically with the SEC.

RISK FACTORS

SINCE WE ARE A DEVELOPMENT STAGE COMPANY, HAVE GENERATED LIMITED REVENUES AND
LACK AN OPERATING HISTORY, AN INVESTMENT IN OUR SHARES IS HIGHLY RISKY AND COULD
RESULT IN A COMPLETE LOSS OF YOUR INVESTMENT IF WE ARE UNSUCCESSFUL IN OUR
BUSINESS PLANS.

Our company was incorporated in November 2004; we have developed our greeting
card collection; we have realized $476 in revenues; and have an accumulated
deficit of $30,192 since inception. We have no operating history upon which an
evaluation of our future prospects can be made. Such prospects must be
considered in light of the substantial risks, expenses and difficulties
encountered by new entrants into the highly competitive greeting card industry.
Our ability to achieve and maintain profitability and positive cash flow is
highly dependent upon a number of factors, including our ability to attract and
retain customers for our greeting cards, while keeping costs to a minimum. Based
upon current plans, we expect to incur operating losses in future periods as we
incur expenses associated with the operation of our business. Further, we cannot
guarantee that we will be successful in realizing revenues or in achieving or
sustaining positive cash flow at any time in the future. Any such failure could
result in the possible closure of our operations or force us to seek additional
capital through loans or additional sales of our equity securities to continue
business operations, which would dilute the value of any shares you purchase.

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WE ARE TOTALLY DEPENDENT ON THE PROCEEDS FROM OUR OFFERING TO IMPLEMENT OUR
BUSINESS PLANS UNTIL WE GENERATE REVENUES. WE DO NOT HAVE ANY OTHER SOURCES OF
FUNDING AND MAY BE UNABLE TO FIND ANY SUCH FUNDING, IF AND WHEN NEEDED, WHICH
COULD SEVERELY LIMIT ANY POSSIBLE REVENUES AND RESULT IN A FAILURE OF OUR
BUSINESS.

We have used the proceeds of our offering to complete the design and production
of our initial greeting card line. Other than the shares sold in our initial
public offering which closed on September 20, 2005, no other source of capital
has been identified or sought. We received the total proceeds of $25,000. This
initial greeting card collection consists of both printed and hand painted
cards. There can be no assurance that we will generate revenues or that revenues
will be sufficient to maintain our business. There can be no assurance that we
will be able to raise additional funding, if we do not generate sufficient
revenues, to later develop and sell a more expansive collection of greeting
cards. Our auditors have expressed substantial doubt as to our ability to
continue as a going concern.

SINCE OUR SUCCESS DEPENDS UPON THE EFFORTS OF NICOLE MILKOVICH, THE KEY MEMBER
OF OUR MANAGEMENT, OUR FAILURE TO RETAIN NICOLE MILKOVICH WILL NEGATIVELY AFFECT
OUR BUSINESS, OPERATING RESULTS AND FINANCIAL RESULTS. IN ADDITION, WE MAY NEED
TO HIRE ADDITIONAL EMPLOYEES IN ORDER TO EXPAND AND SELL ADDITIONAL CARDS. IF
THESE EMPLOYEES ARE NOT AVAILABLE TO US, WE MAY BE UNABLE TO EXPAND OUR BUSINESS
WHEN WE ARE READY TO DO SO, WHICH COULD RESULT IN POSSIBLE REVENUE LOSSES.

Our business is greatly dependent on the efforts of our President, Nicole
Milkovich. We have no full time employees and only two part-time employees,
Nicole Milkovich, an officer and director and Carlos Bolbrugge, an officer,
neither of whom are compensated for their services. Our success will also depend
in large part upon our ability to attract, develop, motivate and retain highly
skilled artistic and technical employees in order to expand our card collection
from the initial line. Competition for qualified personnel in this industry is
intense and we may not be able to hire or retain qualified personnel, if and
when needed. We have not yet had any difficulties in hiring, as we don't expect
to seek employees until we have established our initial card collection and seek
to expand. As such, we are unaware of any characteristics of our company that
may not be attractive to potential recruits. We have not entered into a
management agreement with Nicole Milkovich and the loss of her services could
have a negative impact on our business operations, operating results and
possible revenues.

OUR OFFICERS AND DIRECTOR HAVE CONFLICTS OF INTEREST IN THAT THEY HAVE OTHER
ACTIVITIES THAT WILL PREVENT THEM FROM DEVOTING FULL-TIME TO OUR OPERATIONS,
WHICH MAY SLOW OUR OPERATIONS AND AS A RESULT MAY REDUCE OUR FINANCIAL RESULTS.

Our officers and director have conflicts of interest in that they have other
activities that will prevent them from devoting full-time to our operations.
Nicole Milkovich, our President, Secretary, Chief Financial Officer and sole
Director is a full-time graphic designer for Nick Milkovich Architects and takes
on various graphic design independent contracts, as well. Ms. Milkovich devotes
approximately 20 hours per week to our operations. Carlos Bolbrugge, our Vice
President of Design, is a full-time independent graphic designer in the film
industry and devotes approximately 5 hours per week to our operations. These
other activities performed by our officers and sole director will not directly
compete with our proposed operations; however, the limited number of hours Ms.
Milkovich and Mr. Bolbrugge have to devote to our business activities may
negatively affect our operations and reduce or limit our potential revenues and
financial results.

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THE GREETING CARD INDUSTRY IS HIGHLY COMPETITIVE AND IF OUR COLLECTION OF CARDS
IS NOT WELL RECEIVED AND/OR SUCCESSFUL, WE MAY BE UNABLE TO GENERATE REVENUE.

The greeting card industry is highly competitive with respect to price and
quality of the cards, as well as the accessibility of the cards for consumers
and, as a result, there is a high failure rate in the industry. There are
numerous well-established competitors, including large international card
companies, regional and local card companies possessing substantially greater
financial, marketing, personnel and other resources than our company. There can
be no assurance that we will be able to respond to all of the competitive
factors affecting the card industry and successfully develop a greeting card
line that will be well received and profitable. The greeting card industry is
generally affected by changes in consumer preferences and national, regional and
local economic conditions, as well as demographic trends. If we are unable to
successfully produce and market our greeting card line and generate revenues,
you could lose any investment you make in our securities.

BECAUSE WE DO NOT CURRENTLY HAVE ANY PATENT OR TRADEMARK PROTECTION FOR OUR
GREETING CARD LINE, THERE IS NO GUARANTEE THAT SOMEONE ELSE WILL NOT DUPLICATE
OUR IDEAS AND BRING THEM TO MARKET BEFORE WE DO OR MAKE A BETTER PRODUCT, EITHER
OF WHICH COULD SEVERELY LIMIT OUR PROPOSED SALES AND REVENUES.

We believe our greeting card line is unique; however, we currently have no
patents or trademarks for our designs or brand name. As business is established
and operations expand, we may seek such protection; however, we currently have
no plans to do so. Despite efforts to protect our proprietary rights, such as
our designs and brand name, since we have no patent or trademark rights,
unauthorized persons may attempt to copy aspects of our business, including our
designs, greeting cards and other proprietary information. We currently keep all
of our proprietary information in locked computer databases and file cabinets
and plan to enter into non-disclosure agreements with any outside printing firms
and/or other companies we may engage to develop our card collections. These
simple procedures, however, are no assurance our proprietary information and/or
brand name will not fall into the hands of a third party who may choose to copy
or use similar techniques and/or our brand name. Any encroachment upon our
proprietary information, including the unauthorized use of our brand name, the
use of a similar name by a competing company or a lawsuit initiated against us
for infringement upon another company's proprietary information or improper use
of their trademark, may affect our ability to create brand name recognition,
cause customer confusion and/or have a detrimental effect on our business.
Litigation or proceedings before the U.S. or International Patent and Trademark
Offices may be necessary in the future to enforce our intellectual property
rights, to protect our trade secrets and domain name and/or to determine the
validity and scope of the proprietary rights of others. Any such infringement,
litigation or adverse proceeding could result in substantial costs and diversion
of resources and could seriously harm our business operations and/or results of
operations. We are unaware of any infringement upon our proprietary rights
and/or brand name and have not been notified by any third party that we are
infringing upon any proprietary rights.

BUYING LOW-PRICED PENNY STOCK IS VERY RISKY AND SPECULATIVE.

Our shares are defined as a penny stock under the Securities and Exchange Act of
1934, and rules of the Commission. The Exchange Act and such penny stock rules
generally impose additional sales practice and disclosure requirements on
broker-dealers who sell our securities to persons other than certain accredited
investors who are, generally, institutions with assets in excess of $5,000,000
or individuals with net worth in excess of $1,000,000 or annual income exceeding
$200,000, or $300,000 jointly with spouse), or in transactions not recommended
by the broker-dealer. For transactions covered by the penny stock rules, a

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broker-dealer must make a suitability determination for each purchaser and
receive the purchaser's written agreement prior to the sale. In addition, the
broker-dealer must make certain mandated disclosures in penny stock
transactions, including the actual sale or purchase price and actual bid and
offer quotations, the compensation to be received by the broker-dealer and
certain associated persons, and deliver certain disclosures required by the
Commission. Consequently, the penny stock rules may affect the ability of
broker-dealers to make a market in or trade our common stock and may also affect
your ability to resell any shares you may purchase in this offering in the
public markets.

OUR SOLE DIRECTOR HAS VOTING CONTROL OF OUR COMMON STOCK, WHICH COULD RESULT IN
SHAREHOLDER DECISIONS BEING MADE ON MATTERS YOU MAY NOT AGREE WITH OR THAT MAY
NOT NECESSARILY BE OF BENEFIT TO YOU AS A SHAREHOLDER.

Because our sole officer and director controls a large percentage of our common
stock, she has the power to control our management and its decisions. Our sole
director owns a total of 2,000,000 shares, which is approximately 67% of our
issued and outstanding common stock. As such, in accordance with provisions in
our articles of incorporation and bylaws, she will be able to control who is
elected to our board of directors and thus could act, or could have the power to
act, as our management. The interests of our officers and sole director may not
be, at all times, the same as that of our other shareholders. Where those
conflicts exist, our shareholders will be dependent upon our officers and sole
director exercising, in a manner fair to all of our shareholders, their
fiduciary duties as officers and directors. Also, these officers and directors
will have the ability to significantly influence the outcome of most corporate
actions requiring shareholder approval, including any possible change in
business plans, merger of our company with or into another company, the sale of
all or substantially all of our assets and/or amendments to our articles of
incorporation, even though none of such events is planned or proposed.

ANY FUTURE SALE OF STOCK HELD BY OUR EXISTING STOCKHOLDER, WHO HOLDS 67% OF OUR
TOTAL ISSUED AND OUTSTANDING SHARES, COULD SEVERELY IMPACT THE MARKET PRICE OF
OUR STOCK.

A total of 2,000,000 shares were issued to Nicole Milkovich, our sole director
and existing stockholder, on November 29, 2004, and are restricted securities,
as that term is defined in Rule 144 of the Rules and Regulations of the SEC
promulgated under the Act. Under Rule 144, such shares can be publicly sold,
subject to volume restrictions and certain restrictions on the manner of sale,
commencing one year after their acquisition. Any sale of these shares held by
Ms. Milkovich after the applicable restrictions expire on November 29, 2005 may
have a depressive effect on the price of our common stock in any market that may
develop, of which there can be no assurance.

WE ARE A SMALL, DEVELOPMENT STAGE START-UP COMPANY WITH ONLY ONE DIRECTOR ON OUR
BOARD, WHICH COULD RESULT IN A LACK OF INDEPENDENCE NEEDED ON CERTAIN ISSUES AND
DECISIONS WHICH IMPACTING OUR SHAREHOLDERS.

We are a small start-up company with only one director, Nicole Milkovich, who is
also our President, CEO, Secretary, Treasurer, CFO and Principal Accounting
Officer. As a result, we lack independent directors, independent board
committees and an independent audit committee financial expert. In addition, Ms.
Milkovich owns 67% of our issued and outstanding Common Stock, giving her
control of any decisions regarding the company and/or our Common Stock. There
can be no assurance that Ms. Milkovich will be completely independent in the
decisions she makes as our sole director and/or principal stockholder, that will
ensure protection of the rights of other stockholders.

                                       11
<PAGE>
ITEM 2 - DESCRIPTION OF PROPERTY

We do not currently own any property. We operate our business from the home of
our President, Nicole Milkovich, on a rent-free basis. It is anticipated this
arrangement will remain until we begin generating revenues and our operations
expand, at which time we will seek to lease shared office facilities at
competitive market rates, on a month-to-month basis. It is our opinion that our
current office space will meet our needs for the foreseeable future.

INVESTMENT POLICIES

Our management does not currently have policies regarding the acquisition or
sale of real estate assets primarily for possible capital gain or primarily for
income. We do not presently hold any investments or interests in real estate,
investments in real estate mortgages or securities of or interests in persons
primarily engaged in real estate activities.

ITEM 3 - LEGAL PROCEEDINGS

We are not currently involved in any legal proceedings nor do we have any
knowledge of any threatened litigation.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

No matters were submitted to a vote of security holders during the year ended
January 31, 2007.

                                     PART II

ITEM 5 - MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Since January 5, 2006 our common stock has been listed for quotation on the
Over-the-Counter Bulletin Board under the symbol MBTL. There has been no active
trading market and thus no high and low sales prices to report.

SHARES AVAILABLE UNDER RULE 144

There are currently 2,000,000 shares of common stock that are considered
restricted securities under Rule 144 of the Securities Act of 1933. All
2,000,000 shares are held by our affiliates, as that term is defined in Rule
144(a)(1). In general, under Rule 144 as amended, a person who has beneficially
owned and held restricted securities for at least one year, including
affiliates, may sell publicly without registration under the Securities Act,
within any three-month period, assuming compliance with other provisions of the
Rule, a number of shares that do not exceed the greater of(i) one percent of the
common stock then outstanding or, (ii) the average weekly trading volume in the
common stock during the four calendar weeks preceding such sale. A person who is
not deemed an "affiliate" of our Company and who has beneficially owned shares
for at least two years would be entitled to unlimited re-sales of such
restricted securities under Rule 144 without regard to the volume and other
limitations described above.

                                       12
<PAGE>
Our officer and director, possessing 66.6% of our voting common stock, controls
significantly all of our activities and thus, may affect the determination of
whether dividends are paid on to our stockholders.

HOLDERS

As of January 31, 2007, we have 3,000,000 Shares of $0.001 par value common
stock issued and outstanding held by 28 shareholders of record.

The stock transfer agent for our securities is Holladay Stock Transfer, 2939 N.
67th Place, Scottsdale, Arizona 85251, telephone (480)481-3940.

DIVIDENDS

We have never declared or paid any cash dividends on our common stock. For the
foreseeable future, we intend to retain any earnings to finance the development
and expansion of our business, and we do not anticipate paying any cash
dividends on its common stock. Any future determination to pay dividends will be
at the discretion of the Board of Directors and will be dependent upon then
existing conditions, including our financial condition and results of
operations, capital requirements, contractual restrictions, business prospects,
and other factors that the board of directors considers relevant.

ITEM 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR RESULTS
         OF OPERATIONS

RESULTS OF OPERATIONS

We have generated $476 in revenue since inception and have incurred $18,807 in
expenses through January 31, 2007.

The following table provides selected financial data about our company for the
year ended January 31, 2007.

           Balance Sheet Data:                 1/31/07
           -------------------                 -------
           Cash                                $ 7,256
           Total assets                        $ 7,493
           Total liabilities                   $ 2,685
           Shareholders' equity                $ 7,493

There was no cash provided by financing activities for the year ended January
31, 2007.

PLAN OF OPERATION

GOING CONCERN

We were issued an opinion by our auditors that raised substantial doubt about
our ability to continue as a going concern based on our current financial
position.

                                       13
<PAGE>
We only expect to be able to satisfy our cash requirements for the next 3 months
with our cash in the bank of $7,256 at January 31, 2007 without having to raise
additional funds or seek bank loans. After that 3 month period, if we have not
yet generated revenues sufficient to sustain business operations, we may have to
raise additional monies through sales of our equity securities or through loans
from banks or third parties to continue our business plans. No assurances can be
given that we will be able to raise additional financing to satisfy our
financial requirements.

As resources remain available, we will continue to produce and market our
greeting card collections. However, we may decide that we can not continue with
our business operations as detailed in our original business plan because of a
lack of financial resources. We may look for other potential business
opportunities that might be available to the Company. There can be no
certainties that there will be any other business opportunities available; nor
the nature of the business opportunity; nor any indication of the financial
resources required of any possible business opportunity.

LIMITED OPERATING HISTORY; NEED FOR ADDITIONAL CAPITAL

Milk Bottle Cards Inc is a development stage company and has not generated
significant revenues from operations. We cannot guarantee it will be successful
our business operations. Our business is subject to risks inherent in the
establishment of a new business enterprise, including limited capital resources,
possible delays in the development of its services, and possible cost overruns
due to price and cost increases in services. We will require further equity
financing to provide for some of the capital required to implement future
development of our operations.

We have no assurance that future financing will be available to us on acceptable
terms. If financing is not available on satisfactory terms, we may be unable to
continue, develop or expand our operations. However, if equity financing is
available to us on acceptable terms, it could result in additional dilution to
existing shareholders.

BUSINESS PLAN OF OPERATIONS OVERVIEW

In furtherance of our business we have the following plans:

     *    Our website at www.milkbottlecards.com currently displays several
          different cards for sale; including hand painted cards, holiday,
          birthday and thank you cards. We have completed design work for a new
          series of cards for birthdays, weddings, baby showers, and blank
          cards. We expect to have the new cards available for sale in Spring
          2007.

     *    We continue to contact more corporate entities and introduce them to
          Milk Bottle Cards and our custom card opportunities.

     *    We currently have a card inventory of 300 cards; inclusive of cards of
          all categories, with an increased emphasis on birthday cards and hand
          painted cards in Spring colors. The production of hand painted cards
          by our president will continue.

                                       14
<PAGE>
     *    We are looking into selling the hand painted cards and collaged cards
          at an increased price as `original pieces of art', and then scanning
          them and selling the prints of these `originals' in limited edition
          series as they do with art prints.

     *    We recently made contact with a gift store in Vancouver that
          specializes in paper products. We have been asked to contact them in
          Spring/Summer 2007.

     *    We will continue to market the collection to other retail stores in
          throughout Spring 2007. In addition, we anticipate participating in
          upcoming local gift and home living trade shows in Spring 2007.

     *    We are going to research new printing techniques in order to reduce
          the problem with wasted materials we have encountered in our
          production of the printed cards due to the overuse of our printer.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

These financial statements are presented in United States dollars and have been
prepared in accordance with United States generally accepted accounting
principles.

DEVELOPMENT STAGE ENTERPRISE

The Company is a development stage enterprise, as defined in Financial
Accounting Standards Board Statement ("SFAS") No. 7 "Accounting and Reporting by
Development Stage Enterprises". The Company is devoting all of its present
efforts to securing and establishing a new business. Its planned principal
operations have commenced; however, the Company has yet to derive a significant
amount of revenue from operations.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure on
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

The Company considers all liquid investments, with an original maturity of three
months or less when purchased, to be cash equivalents.

                                       15
<PAGE>
REVENUE RECOGNITION

The Company recognizes revenue when products have been shipped, the amounts are
fixed or determinable and collection is reasonably assured. The Company
recognizes revenue from sales of consignment goods when cash is received from
the consignor.

FINANCIAL INSTRUMENTS

In accordance with the requirements of SFAS No. 107, "Disclosures about Fair
Value of Financial Instruments," the Company has determined the estimated fair
value of financial instruments using available market information and
appropriate valuation methodologies. The carrying values of cash and accounts
payable and accrued liabilities approximate fair values due to the short-term
maturity of the instruments.

INCOME TAXES

The Company has adopted SFAS No. 109 "Accounting for Income Taxes" as of its
inception. Pursuant to SFAS No. 109, the Company is required to compute tax
asset benefits for net operating losses carried forward. Potential benefit of
net operating losses have not been recognized in these financial statements
because the Company cannot be assured it is more likely than not it will utilize
the net operating losses carried forward in future years.

LOSS PER COMMON SHARE

The Company computes net loss per share in accordance with SFAS No. 128,
"Earnings per Share". SFAS No. 128 requires presentation of both basic and
diluted earnings per share (EPS) on the face of the statement of operations.
Basic EPS is computed by dividing net income (loss) available to common
shareholders (numerator) by the weighted average number of shares outstanding
(denominator) during the period. Diluted EPS gives effect to all potentially
dilutive common shares outstanding during the period using the treasury stock
method and convertible preferred stock using the "if converted" method. In
computing diluted EPS, the average stock price for the period is used in
determining the number of shares assumed to be purchased from the exercise of
stock options or warrants. Diluted EPS excludes all potentially dilutive shares
if their effect is anti dilutive. The Company has not issued any potentially
dilutive instruments since inception and accordingly basic loss per share is
equal to diluted loss per share.

FOREIGN CURRENCY TRANSLATION

The Company's functional currency and reporting currency is the U.S. dollar. In
accordance with SFAS No. 52, "Foreign Currency Translation", foreign denominated
monetary assets and liabilities are translated to their U.S. dollar equivalents
using foreign exchange rates which prevailed at the balance sheet date. Revenue
and expenses are translated at average rates of exchange during the year.
Related translation adjustments are reported as a separate component of
stockholders' equity, whereas gains or losses resulting from foreign currency
transactions are included in results of operations. To date the Company has not
reported any translation adjustments or transaction gains or losses.

                                       16
<PAGE>
STOCK-BASED COMPENSATION

The Company has not granted any stock options since inception and has not
recorded any stock-based compensation.

RECENT ACCOUNTING PRONOUNCEMENTS

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measures". This
Statement defines fair value, establishes a framework for measuring fair value
in generally accepted accounting principles, expands disclosures about fair
value measurements, and applies under other accounting pronouncements that
require or permit fair value measurements. SFAS No. 157 does not require any new
fair value measurements. However, the FASB anticipates that for some entities,
the application of SFAS No. 157 will change current practice. SFAS No. 157 is
effective for financial statements issued for fiscal years beginning after
November 15, 2007, which for the Company would be its fiscal year beginning
January 1, 2008. The Company is currently evaluating the impact of SFAS No. 157
but does not expect that it will have a material impact on its financial
statements.

In September 2006, the FASB issued SFAS No. 158, "Employers' Accounting for
Defined Benefit Pension and Other Postretirement Plans." This Statement requires
an employer to recognize the over funded or under funded status of a defined
benefit post retirement plan (other than a multiemployer plan) as an asset or
liability in its statement of financial position, and to recognize changes in
that funded status in the year in which the changes occur through comprehensive
income. SFAS No. 158 is effective for fiscal years ending after December 15,
2006. The Company does not expect that the implementation of SFAS No. 158 will
have any impact on its financial position and results of operations.

In September 2006, the SEC issued Staff Accounting Bulletin ("SAB") No. 108,
"Considering the Effects of Prior Year Misstatements when Quantifying
Misstatements in Current Year Financial Statements." SAB No. 108 addresses how
the effects of prior year uncorrected misstatements should be considered when
quantifying misstatements in current year financial statements. SAB No. 108
requires companies to quantify misstatements using a balance sheet and income
statement approach and to evaluate whether either approach results in
quantifying an error that is material in light of relevant quantitative and
qualitative factors. SAB No. 108 is effective for periods ending after November
15, 2006. The Company does not expect that the implementation of SAB No. 108
will have any impact on its financial statements.

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities". This Statement permits entities to
choose to measure many financial assets and financial liabilities at fair value.
Unrealized gains and losses on items for which the fair value option has been
elected are reported in earnings. SFAS No. 159 is effective for fiscal years
beginning after November 15, 2007. The Company is currently assessing the impact
of SFAS No. 159 on its financial position and results of operations.

FORWARD LOOKING STATEMENTS

Some of the statements contained in this Form 10-KSB that are not historical
facts are "forward-looking statements" which can be identified by the use of
terminology such as "estimates," "projects," "plans," "believes," "expects,"
"anticipates," "intends," or the negative or other variations, or by discussions
of strategy that involve risks and uncertainties. We urge you to be cautious of
the forward-looking statements, that such statements, which are contained in

                                       17
<PAGE>
this Form 10-KSB, reflect our current beliefs with respect to future events and
involve known and unknown risks, uncertainties and other factors affecting our
operations, market growth, services, products and licenses. No assurances can be
given regarding the achievement of future results, as actual results may differ
materially as a result of the risks we face, and actual events may differ from
the assumptions underlying the statements that have been made regarding
anticipated events.

All written forward-looking statements made in connection with this Form 10-KSB
that are attributable to us or persons acting on our behalf are expressly
qualified in their entirety by these cautionary statements. Given the
uncertainties that surround such statements, you are cautioned not to place
undue reliance on such forward-looking statements.

                                       18
<PAGE>
ITEM 7 - FINANCIAL STATEMENTS

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of Milk Bottle Cards Inc.

We have  audited the  accompanying  balance  sheets of Milk Bottle Cards Inc. (a
development  stage  company)  as of January  31,  2007 and 2006 and the  related
statements  of  operations,  stockholders'  deficit and cash flows for the years
ended  January  31,  2007  and  2006  and the  period  from  November  19,  2004
(inception)  through  January  31,  2007.  These  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  an audit to obtain  reasonable  assurance  whether  the  financial
statements  are free of material  misstatement.  The Company is not  required to
have,  nor were we engaged to perform,  an audit of its  internal  control  over
financial reporting.  Our audits included consideration of internal control over
financial  reporting  as  a  basis  for  designing  audit  procedures  that  are
appropriate  in the  circumstances,  but not for the  purpose of  expressing  an
opinion on the  effectiveness  of the Company's  internal control over financial
reporting.  Accordingly,  we express  no such  opinion.  An audit also  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements,  and assessing the  accounting  principles  used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  these  financial  statements  present  fairly,  in all material
respects,  the  financial  position of Milk Bottle  Cards Inc. as of January 31,
2007 and 2006 and the results of its operations and its cash flows for the years
ended  January  31,  2007  and  2006  and the  period  from  November  19,  2004
(inception)  through January 31, 2007 in conformity  with accounting  principles
generally accepted in the United States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 1 to the
financial  statements,  the Company has not generated  revenues since inception,
has  incurred  losses  in  developing  its  business,  and  further  losses  are
anticipated.  The Company requires  additional funds to meet its obligations and
the costs of its  operations.  These factors raise  substantial  doubt about the
Company's  ability to continue as a going  concern.  Management's  plans in this
regard are  described  in Note 1. The  financial  statements  do not include any
adjustments that might result from the outcome of this uncertainty.


                                       /s/ Dale Matheson Carr-Hilton Labonte LLP
                                       -----------------------------------------
                                           Dale Matheson Carr-Hilton Labonte LLP
                                                           CHARTERED ACCOUNTANTS
Vancouver, Canada
February 13, 2007

                                       19
<PAGE>
                             MILK BOTTLE CARDS INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                       January 31,       January 31,
                                                                          2007              2006
                                                                        --------          --------
<S>                                                                   <C>               <C>
                                     ASSETS

CURRENT ASSETS
  Cash                                                                  $  7,256          $ 19,230
  Prepaid expenses                                                           237                --
                                                                        --------          --------

                                                                        $  7,493          $ 19,230
                                                                        ========          ========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable and accrued liabilities                              $  2,685          $  2,771
                                                                        --------          --------

COMMITMENTS AND CONTINGENCIES (NOTE 1)

STOCKHOLDERS' EQUITY
  Capital stock (Note 3)
    100,000,000 authorized common shares, $0.001 par value,
    3,000,000 common shares issued and outstanding                         3,000             3,000
     (January 31, 2006 - 3,000,000)
  Additional paid in capital                                              32,000            32,000
  Deficit accumulated during the development stage                       (30,192)          (18,541)
                                                                        --------          --------

                                                                           4,808            16,459
                                                                        --------          --------

                                                                        $  7,493          $ 19,230
                                                                        ========          ========
</TABLE>

    The accompanying notes are an integral part of these financial statements

                                       20
<PAGE>
                             MILK BOTTLE CARDS INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                             Cumulative from
                                                                                             November 19, 2004
                                                         Year ended         Year ended        (inception) to
                                                         January 31,        January 31,         January 31,
                                                            2007               2006                2007
                                                        -----------        -----------         -----------
<S>                                                     <C>                <C>                 <C>
REVENUE                                                 $        --        $       476         $       476

COST OF GOOD SOLD                                                --                210                 210
                                                        -----------        -----------         -----------

GROSS PROFIT                                                     --                266                 266
                                                        -----------        -----------         -----------
GENERAL AND ADMINISTRATIVE EXPENSES
  Office and general                                          1,796              1,971              15,669
  Professional fees                                           8,300              6,532              10,017
  Regulatory and filing fees                                  1,555              4,270               4,772
                                                        -----------        -----------         -----------

                                                             11,651             12,773              30,458
                                                        -----------        -----------         -----------

NET LOSS                                                $   (11,651)       $   (12,507)        $   (30,192)
                                                        ===========        ===========         ===========

BASIC AND DILUTED NET LOSS PER COMMON SHARE             $     (0.00)       $     (0.00)
                                                        ===========        ===========

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING      3,000,000          2,364,384
                                                        ===========        ===========
</TABLE>

    The accompanying notes are an integral part of these financial statements

                                       21
<PAGE>
                             MILK BOTTLE CARDS INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                        STATEMENT OF STOCKHOLDERS' EQUITY
      FOR THE PERIOD FROM NOVEMBER 19, 2004 (INCEPTION) TO JANUARY 31, 2007

<TABLE>
<CAPTION>
                                                                                        Deficit
                                                                                      Accumulated
                                                                       Additional     During the
                                                   Common Shares         Paid in      Development
                                              Number         Amount      Capital         Stage         Total
                                              ------         ------      -------         -----         -----
<S>                                         <C>           <C>          <C>           <C>            <C>
Balance, November 19, 2004                          --     $      --    $      --     $      --      $      --

Issued for cash at $0.005 per share -
 November 29, 2004                           2,000,000         2,000        8,000            --         10,000

Net loss                                            --            --           --        (6,034)        (6,034)
                                             ---------     ---------    ---------     ---------      ---------
Balance, January 31, 2005 (audited)          2,000,000         2,000        8,000        (6,034)         3,966

Issued for cash at $0.025 per share -
 September 20, 2005                          1,000,000         1,000       24,000            --         25,000

Net loss                                            --            --           --       (12,507)       (12,507)
                                             ---------     ---------    ---------     ---------      ---------
Balance, January 31, 2006                    3,000,000         3,000       32,000       (18,541)        16,459

Net loss                                            --            --           --       (11,651)       (11,651)
                                             ---------     ---------    ---------     ---------      ---------

Balance, January 31, 2007                    3,000,000     $   3,000    $  32,000     $ (30,192)     $   4,808
                                             =========     =========    =========     =========      =========
</TABLE>

    The accompanying notes are an integral part of these financial statements

                                       22
<PAGE>
                             MILK BOTTLE CARDS INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                           Cumulative from
                                                                                           November 19, 2004
                                                        Year ended         Year ended       (inception) to
                                                        January 31,        January 31,        January 31,
                                                           2007               2006               2007
                                                         --------           --------           --------
<S>                                                     <C>                <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss                                               $(11,651)          $(12,507)          $(30,192)
  Adjustments to reconcile net loss to net cash
   used in operating activities:
    Prepaid expenses                                         (237)                --               (237)
    Accounts payable and accrued liabilities                  (86)            (3,104)             2,685
                                                         --------           --------           --------

NET CASH USED IN OPERATING ACTIVITIES                     (11,974)           (15,611)           (27,744)
                                                         --------           --------           --------

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds on sale of common stock                             --             25,000             35,000
                                                                            --------           --------

NET CASH PROVICED BY FINANCING ACTIVITIES                      --             25,000             35,000
                                                         --------           --------           --------

INCREASE (DECREASE) IN CASH                               (11,974)             9,389              7,256

CASH, BEGINNING                                            19,230              7,256                 --
                                                         --------           --------           --------

CASH, ENDING                                             $  7,256           $ 19,230           $  7,256
                                                         ========           ========           ========

Supplemental disclosures:
  Cash paid for:
    Interest                                             $     --           $     --           $     --
                                                         ========           ========           ========
    Taxes                                                $     --           $     --           $     --
                                                         ========           ========           ========
</TABLE>

    The accompanying notes are an integral part of these financial statements

                                       23
<PAGE>
                             MILK BOTTLE CARDS INC.
                        (A Development Stage Enterprise)
                                JANUARY 31, 2007
                          NOTES TO FINANCIAL STATEMENTS


NOTE 1 - NATURE AND CONTINUANCE OF OPERATIONS

ORGANIZATION

Milk Bottle Cards Inc. (the  "Company") was  incorporated  under the laws of the
State of Nevada on November 19, 2004 for the purpose of producing,  distributing
and marketing a collection of greeting cards.

GOING CONCERN

These financial  statements  have been prepared on a going concern basis,  which
implies that the Company will  continue to realize its assets and  discharge its
liabilities in the normal course of business.  The Company's ability to continue
as a going  concern is  dependent on raising  additional  capital to fund future
operations and ultimately to attain profitable operations.  The Company has been
in the initial  organization  stage since  inception and as at January 31, 2007,
the Company has accumulated losses of $30,192 since inception.  Since inception,
the  Company  has funded  operations  through  the  issuance  of capital  stock.
Management's plan is to continue raising  additional funds through future equity
or debt  financings  until it achieves  profitable  operations from sales of its
greeting cards.  There is no certainty that additional funding will be available
when  needed.  Accordingly,  these  factors  raise  substantial  doubt as to the
Company's ability to continue as a going concern.  These financial statements do
not include any adjustments to the recoverability and classification of recorded
asset amounts and  classification  of liabilities that might be necessary should
the Company be unable to continue as a going concern.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

These financial  statements are presented in United States dollars and have been
prepared  in  accordance  with  United  States  generally  accepted   accounting
principles.

DEVELOPMENT STAGE ENTERPRISE

The  Company  is  a  development  stage  enterprise,  as  defined  in  Financial
Accounting Standards Board Statement ("SFAS") No. 7 "Accounting and Reporting by
Development  Stage  Enterprises".  The  Company is  devoting  all of its present
efforts to securing  and  establishing  a new  business.  Its planned  principal
operations have commenced;  however, the Company has yet to derive a significant
amount of revenue from operations.

USE OF ESTIMATES

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  on
contingent assets and liabilities at the date of the financial  statements,  and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

The Company considers all liquid investments, with an original maturity of three
months or less when purchased, to be cash equivalents.

                                       24
<PAGE>
                             MILK BOTTLE CARDS INC.
                        (A Development Stage Enterprise)
                                JANUARY 31, 2007
                          NOTES TO FINANCIAL STATEMENTS


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

REVENUE RECOGNITION

The Company recognizes revenue when products have been shipped,  the amounts are
fixed  or  determinable  and  collection  is  reasonably  assured.  The  Company
recognizes  revenue from sales of  consignment  goods when cash is received from
the consignor.

FINANCIAL INSTRUMENTS

In accordance  with the  requirements of SFAS No. 107,  "Disclosures  about Fair
Value of Financial  Instruments,"  the Company has determined the estimated fair
value  of  financial   instruments   using  available  market   information  and
appropriate  valuation  methodologies.  The carrying values of cash and accounts
payable and accrued  liabilities  approximate  fair values due to the short-term
maturity of the instruments.

INCOME TAXES

The Company has adopted  SFAS No. 109  "Accounting  for Income  Taxes" as of its
inception.  Pursuant  to SFAS No.  109,  the  Company is required to compute tax
asset benefits for net operating  losses carried forward.  Potential  benefit of
net  operating  losses have not been  recognized in these  financial  statements
because the Company cannot be assured it is more likely than not it will utilize
the net operating losses carried forward in future years.

LOSS PER COMMON SHARE

The  Company  computes  net loss per  share in  accordance  with  SFAS No.  128,
"Earnings  per  Share".  SFAS No. 128  requires  presentation  of both basic and
diluted  earnings per share (EPS) on the face of the  statement  of  operations.
Basic  EPS is  computed  by  dividing  net  income  (loss)  available  to common
shareholders  (numerator) by the weighted  average number of shares  outstanding
(denominator)  during the period.  Diluted EPS gives  effect to all  potentially
dilutive  common shares  outstanding  during the period using the treasury stock
method and  convertible  preferred  stock using the "if  converted"  method.  In
computing  diluted  EPS,  the  average  stock  price  for the  period is used in
determining  the number of shares  assumed to be purchased  from the exercise of
stock options or warrants.  Diluted EPS excludes all potentially dilutive shares
if their  effect is anti  dilutive.  The Company has not issued any  potentially
dilutive  instruments  since inception and  accordingly  basic loss per share is
equal to dilited loss per share.

FOREIGN CURRENCY TRANSLATION

The Company's  functional currency and reporting currency is the U.S. dollar. In
accordance with SFAS No. 52, "Foreign Currency Translation", foreign denominated
monetary assets and liabilities are translated to their U.S. dollar  equivalents
using foreign exchange rates which prevailed at the balance sheet date.  Revenue
and  expenses  are  translated  at average  rates of  exchange  during the year.
Related  translation  adjustments  are  reported  as  a  separate  component  of
stockholders'  equity,  whereas gains or losses  resulting from foreign currency
transactions are included in results of operations.  To date the Company has not
reported any translation adjustments or transaction gains or losses.

STOCK-BASED COMPENSATION

The  Company  has not  granted any stock  options  since  inception  and has not
recorded any stock-based compensation.

                                       25
<PAGE>
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

RECENT ACCOUNTING PRONOUNCEMENTS

In September  2006,  the FASB issued SFAS No. 157, "Fair Value  Measures".  This
Statement  defines fair value,  establishes a framework for measuring fair value
in generally  accepted  accounting  principles,  expands  disclosures about fair
value  measurements,  and applies  under other  accounting  pronouncements  that
require or permit fair value measurements. SFAS No. 157 does not require any new
fair value measurements.  However,  the FASB anticipates that for some entities,
the  application of SFAS No. 157 will change current  practice.  SFAS No. 157 is
effective  for  financial  statements  issued for fiscal years  beginning  after
November  15,  2007,  which for the Company  would be its fiscal year  beginning
January 1, 2008. The Company is currently  evaluating the impact of SFAS No. 157
but does  not  expect  that it will  have a  material  impact  on its  financial
statements.

In September  2006,  the FASB issued SFAS No. 158,  "Employers'  Accounting  for
Defined Benefit Pension and Other Postretirement Plans." This Statement requires
an employer to  recognize  the over funded or under  funded  status of a defined
benefit post retirement  plan (other than a  multiemployer  plan) as an asset or
liability in its statement of financial  position,  and to recognize  changes in
that funded status in the year in which the changes occur through  comprehensive
income.  SFAS No. 158 is effective  for fiscal  years ending after  December 15,
2006. The Company does not expect that the  implementation  of SFAS No. 158 will
have any impact on its financial position and results of operations.

In September  2006, the SEC issued Staff  Accounting  Bulletin  ("SAB") No. 108,
"Considering   the  Effects  of  Prior  Year   Misstatements   when  Quantifying
Misstatements  in Current Year Financial  Statements." SAB No. 108 addresses how
the effects of prior year  uncorrected  misstatements  should be considered when
quantifying  misstatements  in current year  financial  statements.  SAB No. 108
requires  companies to quantify  misstatements  using a balance sheet and income
statement   approach  and  to  evaluate   whether  either  approach  results  in
quantifying  an error that is  material in light of  relevant  quantitative  and
qualitative  factors. SAB No. 108 is effective for periods ending after November
15,  2006.  The Company does not expect that the  implementation  of SAB No. 108
will have any impact on its financial statements.

In February  2007,  the FASB issued  SFAS No.  159,  "The Fair Value  Option for
Financial Assets and Financial Liabilities".  This Statement permits entities to
choose to measure many financial assets and financial liabilities at fair value.
Unrealized  gains and losses on items for which the fair  value  option has been
elected are  reported in earnings.  SFAS No. 159 is  effective  for fiscal years
beginning after November 15, 2007. The Company is currently assessing the impact
of SFAS No. 159 on its financial position and results of operations.

NOTE 3 - COMMON STOCK

The Company's authorized  capitalization is 100,000,000 common shares with a par
value of $0.001 per share.

Effective November 29, 2004, a total of 2,000,000 shares of the Company's common
stock were issued to the founding and sole director of the Company pursuant to a
stock subscription agreement at $0.005 per share for total proceeds of $10,000.

Effective  September  20,  2005, a total of  1,000,000  shares of the  Company's
common stock were issued pursuant to stock subscription agreements at $0.025 per
share for total proceeds of $25,000.

Since  inception,  the Company  has not  granted  any stock  options and has not
recorded any stock-based compensation.

                                       26
<PAGE>
NOTE 4  -  RELATED PARTY TRANSACTIONS

The Company has had no significant  related party  transactions with any related
individuals or entities.

The Company  currently uses office space provided by the director of the Company
on a rent-free  basis not subject to any formal rental or lease  agreement.  The
Company has  determined  that the fair value of the office space provided is not
significant  and  accordingly no related rent expense has been recorded in these
financial statements.

The  President  currently  donates  card design and  production  services to the
Company. The Company has determined that the fair value of these services is not
significant  and  accordingly  no related  expense  has been  recorded  in these
financial statements.

NOTE 5 - INCOME TAXES

There were no temporary  differences  between the  Company's  tax and  financial
bases  that  result in  deferred  tax  assets  or  liabilities,  except  for the
Company's net operating loss carry-forwards  amounting to approximately  $30,200
at January 31, 2007,  (2006 - $18,500)  which may be available to reduce  future
year's  taxable  income.  These  carry-forwards  will expire,  if not  utilized,
commencing in 2025.  Management  believes that the  realization  of the benefits
from this deferred tax assets  appears  uncertain  due to the Company's  limited
operating history and continuing losses.  Accordingly a full, deferred tax asset
valuation  allowance  has been  provided  and no  deferred  tax  asset  has been
recorded.

The  components  of the net  deferred tax asset,  the  statutory  tax rate,  the
effective  tax  rate and the  elected  amount  of the  valuation  allowance  are
indicated below:

                                        January 31, 2007     January 31, 2006
                                                $                    $
                                        ----------------     ----------------
     Net Operating Loss                       11,651               12,507
     Statutory Tax Rate                           34%                  34%
     Effective Tax Rate                           --                   --

     Deferred Tax Asset                       10,265                6,304
     Valuation Allowance                     (10,265)              (6,304)
                                             -------              -------

     Net Deferred Tax Asset                       --                   --
                                             =======              =======

                                       27
<PAGE>
ITEM 8 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSURE

None.

ITEM 8A - EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management, including
our principal executive officer and the principal financial officer, we have
conducted an evaluation of the effectiveness of the design and operation of our
disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934, as of the end of the period covered
by this report. 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 material
information required to be included in our Securities and Exchange Commission
reports is recorded, processed, summarized and reported within the time periods
specified in SEC rules and forms relating to our company, including any
consolidating subsidiaries, and was made known to us by others within those
entities, particularly during the period when this report was being prepared.

Additionally, there were no significant changes in our internal controls or in
other factors that could significantly affect these controls subsequent to the
evaluation date. We have not identified any significant deficiencies or material
weaknesses in our internal controls, and therefore there were no corrective
actions taken.

                                    PART III

ITEM 9 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

Directors are elected by the stockholders to a term of one year and serve until
their successor is elected and qualified. Officers are elected by the Board of
Directors to a term of one year and serve until their successor is duly elected
and qualified, or until they are removed from office. The Board of Directors has
no nominating, auditing or compensation committees.

The name, address, age and position of our officers and director is set forth
below:

     Name and Address                 Age                Position(s)
     ----------------                 ---                -----------

     Nicole Milkovich                 34          President, CEO, Secretary,
     127 East 18th Ave.                           Treasurer, CFO, Principal
     Vancouver, British Columbia                  Accounting Officer and
     Canada, V5V 1E4                              Director

     Carlos Bolbrugge                 35          Vice President of Design
     1553 Woods Drive
     North Vancouver, BC
     V7R 1A8

                                       28
<PAGE>
DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES

The persons named above have held their offices/positions since inception of our
Company and are expected to hold said offices/positions until the next annual
meeting of our stockholders. The officers and directors are our only officers,
directors, promoters and control persons. There are no relationships between our
officers and directors.

BACKGROUND INFORMATION ABOUT OUR OFFICERS AND DIRECTORS

Nicole Milkovich has been our President, Chief Executive Officer, Secretary,
Treasurer, Chief Financial Officer, Principal Accounting Officer and a Director
since inception. Nicole graduated from Capilano College in North Vancouver,
British Columbia with a Diploma in Studio Art in 1997. In 2000, she obtained her
Bachelor of Fine Arts Degree in Visual Art from the Emily Carr Institute of Art
and Design. Nicole has worked in the graphic design field since graduation. From
November 2000 until the present, Nicole has been employed by Nick Milkovich
Architects as a full- time graphic designer, while taking on various graphic
design independent contracts outside of the office. In 2001, Nicole was hired by
the Architectural Institute of British Columbia to design all print materials
for their annual conference, she has held this contract for the past three
years. In the past five years, Nicole has had numerous design contracts with
companies such as: Eckford & Associates, Landscape Architects; Steelhead Society
of British Columbia; MAL Design; Equilibrium Nutrition; Online Canadian
Pharmacy; Dilemma Productions; Walk Music; Black Dog Productions; and most
recently, the Pacific Salmon Foundation. Nicole Milkovich devotes approximately
20 hours per week to our business.

Carlos Bolbrugge has been our Vice-President of Design since inception. Carlos
graduated from Capilano College in North Vancouver, British Columbia with a
Diploma in Graphic Design and Illustration in 1995. From June 1998 until the
present, Carlos has been employed in the film industry, as a full-time graphic
designer, while taking on various graphic design independent contracts outside
of the film industry. Over the past three years, Carlos has worked with Nicole
Milkovich on several design projects for various clients such as: Eckford &
Associates, Landscape Architects; Steelhead Society of British Columbia, Dilemma
Productions, and Black Dog Productions. Carlos devotes approximately 5 hours per
week to our business.

ITEM 10 - EXECUTIVE COMPENSATION

Currently, neither of our officers and directors is being compensated for their
services; however, they are reimbursed for any out-of-pocket expenses they incur
on our behalf. In the future, if and when we become profitable from revenues
generated, we may approve payment of salaries for our officers and directors,
but currently, no such plans have been approved. We also do not currently have
any benefits, such as health insurance, life insurance or any other benefits
available to our employees.

In addition, none of our officers, directors or employees is party to any
employment agreements.

                                       29
<PAGE>
                                    Annual Compensation          Long-Term Comp.
                                   --------------------------   ----------------
                                                       Other
   Name and                                            Annual
  Position(s)              Year    Salary    Bonus     Comp.    Awards   Payouts
  -----------              ----    ------    -----     -----    ------   -------
Nicole Milkovich           2006     None      None     None      None      None
President, CEO,
Secretary, Treasurer,
Chief Financial Officer,
Principal Accounting
Officer and Director

Carlos Bolbrugge           2006     None      None     None      None      None
Vice President of Design

ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
          RELATED STOCKHOLDER MATTERS

The following table sets forth, as of the date of this prospectus, the total
number of shares owned beneficially by each of our directors, officers and key
employees, individually and as a group, and the present owners of 5% or more of
our total outstanding shares. The table also reflects what such ownership will
be assuming completion of the sale of all shares in this offering, which we
can't guarantee. The stockholder listed below has direct ownership of his/her
shares and possesses sole voting and dispositive power with respect to the
shares.

Name and Address                      No. of            Percentage
Beneficial Owner                      Shares           of Ownership
----------------                      ------           ------------
Nicole Milkovich                    2,000,000               67%
127 East 18th Ave.
Vancouver, BC
Canada, V5V 1E4

Carlos Bolbrugge                         None                0%
1553 Woods Drive
North Vancouver, BC
Canada V7R 1A8

All Officers and
 Directors as a Group               2,000,000               67%

                                       30
<PAGE>
ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

We operate our business from the home of our President, Nicole Milkovich, and
currently use her computer equipment to produce our greeting cards, on a
rent-free basis.

On November 29, 2004, we issued 2,000,000 shares of our restricted common stock
to Nicole Milkovich, our President, CEO, Secretary, Treasurer, Chief Financial
Officer and sole director, as founders' shares, in exchange for $10,000, or
$.005 per share.

ITEM 13 - EXHIBITS

The following exhibits are included with this filing:

         Exhibit
         Number                        Description
         ------                        -----------

            3(i)  *            Articles of Incorporation
            3(ii) *            Bylaws
            31                 Sec. 302 Certification of CEO/CFO
            32                 Sec. 906 Certification of CEO/CFO

----------
*    Incorporated by reference to the Companys Registration Statement on Form
     SB-2 filed with the Commission on April 25, 2005, File No. 333-124304.

ITEM 14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES

The total fees charged to the company for audit services were $9,000 for
audit-related services were $Nil, for tax services were $Nil and for other
services were $Nil during the year ended January 31, 2007.

For the year ended January 31, 2006, the total fees charged to the company for
audit services were $6,500, for audit-related services were $Nil, for tax
services were $Nil and for other services were $Nil.

                                   SIGNATURES

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

February 19, 2007             Milk Bottle Cards, Inc., Registrant


                                  /s/ Nicole Milkovich
                                  ----------------------------------------------
                              By: Nicole Milkovich, President,
                                  CEO, Secretary, Treasurer, CFO,
                                  Principal Accounting Officer and Sole Director

                                       31