Registration No. 333-139667

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM SB-2/A

Amendment #3

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

VALLEY FORGE COMPOSITE TECHNOLOGIES, INC.

(Name of small business issuer in its charter)
 

Florida	3812	20-3061892
(State of jurisdiction of	(Primary Standard Industrial	(I.R.S. Employer
incorporation or organization)	Classification Code Number)	Identification No.)

Louis J. Brothers, President

50 East River Center Boulevard, Suite 820

Covington, Kentucky 41011

(859) 581-5111

(Address, including zip code and telephone number of principal executive offices and principal

place of business and name, address and telephone number of agent for service)

COPY TO:

Russell C. Weigel, III, Esq.

Russell C. Weigel, III, P.A.
5775 Blue Lagoon Drive, Suite 100

Miami, FL 33126

(786) 888-4567

Approximate date of proposed sale to the public:

As soon as practicable from time to time after this registration statement becomes effective.

CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered	Amount to be registered		Proposed maximum offering price per share (1)			Proposed maximum aggregate offering price		Amount of registration fee
$0.001 Common Stock		5,000,000	$	2.00 (2	)		10,000,000	$	1,070.00 (5	)
Class A Warrants to purchase $0.001 Common Stock(6)		3,000,000	$	2.00 (3	)	$	6,000,000		642.00
$0.001 Common Stock issuable upon exercise of warrants		3,000,000	$	2.00 (3	)	$	6,000,000		642.00 (5	)
Units consisting of one share of $0.001 common stock and one warrant to purchase one share of $0.001 common stock(4)		1,296,500	$	1.00		$	1,296,500		129.00 (5	)
$0.001 Common Stock Contained in Units		1,296,500	$	1.50 (3	)	$	1,944,250		208.03
Class B Warrants to purchase $0.001 Common Stock(7)		1,296,500	$	1.50 (3	)	$	1,944,250		208.03
$0.001 Common Stock issuable Upon exercise of Class B Warrants		1,296,500	$	1.50 (3	)	$	1,944,250		208.03
							Fees Total = $3,107.22 Now Due = $0

-1-

(1)This registration statement registers for resale certain of our securities owned by shareholders and unit holders. The offering price has been estimated solely for the purpose of computing the amount of the registration fee in accordance with Rule 457(a) and (g). Our common stock is neither traded on any national exchange nor the NASDAQ.  There currently is no market for our securities.

(2)The proposed maximum offering price for the purposes of the calculation of the registration fee for these shares is based upon the maximum strike price of warrants registered hereby to be sold by the same beneficial owners.

(3)The proposed maximum offering price for the purposes of the calculation of the registration fee is based upon the maximum strike price of warrants registered in this class.

(4)Represents units of the registrant’s securities that have been issued to selling unit holders named in this registration statement.  Each unit consists of one share of $0.001 common stock and one Class B warrant to purchase one share of $0.001 common stock.

(5)Previously Paid.

(6)Represents Warrants issued to a selling shareholder.

(7)Represents Warrants contained in a unit.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

-2-

The Offering:

Public Price of Common Stock: $1.50 to $2.00

Public Price of Class A and Class B Warrants: $1.50 to $2.00

Public Price of Units: $1.00

$27,186,000 estimated proceeds

This prospectus  registers for resale certain of our securities owned by shareholders, warrant holders, and unit holders. The offering price has been estimated solely for the purpose of computing the amount of the registration fee in accordance with Rule 457(a) and (g). Our securities are neither traded on any national exchange nor the NASDAQ.  There currently is no market for our securities.

The securities covered by this prospectus include: (a) 5,000,000 shares of common stock offered by Selling Shareholders, (b) 3,000,000 Class A warrants and 3,000,000 shares of common stock underlying the warrants offered by a Selling Warrant Holder, and (c) 1,296,500 units offered by Selling Unit Holders (each unit being comprised of one share of common stock and one Class B warrant to purchase one share of common stock) including for registration the 1,296,500 shares of common stock and 1,296,500 Class B warrants contained within the units,  and 1,296,500 shares of common stock issuable upon exercise of Class B warrants. All of the securities being registered are owned by existing shareholders, warrant holders, and/or unit holders. No cash will be received by Valley Forge Composite Technologies, Inc. (“Valley Forge” or the “Company”) from sales of shares of common stock by the Selling Shareholders nor sales of units by the Selling Unit Holders, estimated at $27,186,000, but the Company may receive proceeds if warrant holders exercise their warrants and pay cash.

The Company will pay the expenses of the resale registration, including legal, accounting, printing, and related costs incurred in making this offering, which we estimate to be $30,000.  There is no arrangement to place the proceeds from this offering in an escrow, trust or similar account.

This offering involves a high degree of risk, and the securities offered by this prospectus are highly speculative. You should only buy these securities if you can afford to lose your entire investment. SEE "RISK FACTORS" (BEGINNING ON PAGE 9) TO READ ABOUT RISKS YOU SHOULD CAREFULLY CONSIDER BEFORE BUYING THIS STOCK.

We will not receive any proceeds from the sale of common stock or units by the Selling Shareholders, Selling Unit Holders, or Selling Warrant Holders.  No underwriter or person has been engaged to facilitate the sale of securities in this offering. However, the Company will receive proceeds directly from warrant holders who from time to time pay cash upon the exercise of a warrant. The special rights pertaining to the warrants and the units registered for sale are disclosed in greater detail in page 20.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined whether the information in this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

This prospectus shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall the Selling Shareholders, Selling Unit Holders, or Selling Warrant Holders, sell any of these securities, in any state where such offer, solicitation or sale would be unlawful before registration or qualification under such state's securities laws

PROSPECTUS

May 3, 2007

-3-

TABLE OF CONTENTS

	Page
PART I: INFORMATION REQUIRED IN PROSPECTUS
About This Prospectus	5
Summary	5
Summary of Selected Financial Data	7
Risk Factors	8
Risks Related to the Company’s Business	9
Risks Related to Investment	10
Selling Shareholders and Selling Unit Holders	14
Use of Proceeds	16
Determination of Offering Price	17
Market for Common Equity and Related Stockholder Matters	17
Plan of Distribution	17
Legal Proceedings	18
Directors, Executive Officers, Promoters & Control Persons	18
Security Ownership of Certain Beneficial Owners and Management	20
Description of Securities	21
Interest of Named Experts and Counsel	22
Certain Relationships and Related Transactions	23
Description of Business	24
Management's Discussion and Analysis or Plan of Operation	28
Employees	32
Description of Property	32
Reports to Security Holders	32
Executive Compensation	33
Index to Financial Statements	F-1
Report of Independent Registered Public Accounting Firm, Sherb & Co., LLP	F-2
Report of Independent Registered Public Accounting Firm, Morison Cogen LLP	F-3
Balance Sheet as of December 31, 2006	F-4
Statements of Operations for the year ended December 31, 2006 and 2005	F-5
Statements of Stockholders' Deficit for the year ended December 31, 2006 and 2005	F-6
Statements of Cash Flows for the year ended December 31, 2006 and 2005	F-7
Notes to Financial Statements (December 31, 2006 and 2005)	F-8
Other Expenses of Issuance and Distribution	35
Recent Sales of Unregistered Securities	36
PART II: INFORMATION NOT REQUIRED IN PROSPECTUS
Indemnification of Directors and Officers	36
Undertakings	37
Index of Exhibits	38
Signatures	39

-4-

ABOUT THIS PROSPECTUS

In this prospectus, references to "Valley Forge," the "Company," "we," "us" and "our" refer Valley Forge Composite Technologies, Inc., a Florida corporation. We have not authorized anyone to provide information different from that contained in this prospectus. This prospectus is not an offer to sell nor is it seeking an offer to buy these securities in any jurisdiction where such offer or sale is not permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of the Common Stock.

PART I: INFORMATION REQUIRED IN PROSPECTUS

SUMMARY

The following summary highlights the more detailed information and financial statements appearing elsewhere in this prospectus. It is only a summary, it is not complete and does not convey all of the information you should consider prior to investing in the common stock. We urge you to read the entire prospectus carefully, especially the risks of investing in our common stock as discussed in the "Risk Factors" section beginning on page 9. 

Our common stock is deemed to be “penny stock” as that term is defined in Rule 3a51-1 promulgated under the Securities Exchange Act of 1934, as amended. Broker-Dealers dealing in penny stock are required to provide potential investors with a document disclosing the risks of penny stock. Broker-dealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor.

This is a resale registration of common stock, units (comprised of one share of common stock and one warrant to purchase one share of common stock), a registration of two classes of warrants, and a registration of shares issuable upon exercise of warrants. All of the securities being registered are owned by existing shareholders and/or unit holders. No cash will be received by Valley Forge Composite Technologies, Inc. (“Valley Forge” or the “Company”) from sales of shares of common stock by the Selling Shareholders nor sales of units by the Selling Unit Holders, estimated at $27,186,000, but the Company may receive proceeds if warrant holders exercise their warrants and pay cash.

The Company will pay the expenses of the resale registration, including legal, accounting, printing, and related costs incurred in making this offering, which we estimate to be $30,000.

There is no arrangement to place the proceeds from this offering in an escrow, trust or similar account.

Valley Forge is a holding company incorporated in the State of Florida. Valley Forge through its subsidiary is engaged in the business of security technology development and manufacturing. Our primary focus is the manufacture and development of an advanced materials detection system, the THOR LVX photonuclear detection system (“THOR”), of which we own the worldwide rights (except for Russia). Valley Forge has been working with the U.S. Department of Energy (DOE), the Lawrence Livermore National Laboratory, and the P.N. Lebedev Physical Institute of the Russian Academy of Sciences ("Lebedev") for continued research, design, and production of the first THOR unit. The technology used to manufacture the THOR units is made possible through an exclusive rights agreement with Lebedev.

We plan to manufacture this system for sale to government and private entities as a means to detect the presence of explosive fissile and other contraband materials in various concealed environments.

Recent Developments: Restatement of Prior Unaudited Financial Results

On March 12, 2007, the Company, after review and discussion by its Board of Directors and its President and Principal Financial and Accounting Officer, concluded that the previously issued interim financial statements for the nine months ended September 30, 2006 included in the Company's Registration Statement on Form SB-2, as amended through January 26, 2007, and Report on Form 10-QSB for the period ended September 30, 2006 should not be relied upon. In particular the Company has determined, based upon discussions with the U.S. Securities and Exchange Commission (“SEC”), that it had improperly reported and overstated sales revenue and receivable amounts totaling $921,919 in connection with a sale of electronic parts in early 2006. The restatement of affected accounts included material restatements to our cost of sales, inventories, and selling and administrative expenses, and amounts due to shareholders. As a result, we restated our Form 10-QSB for the period ended September 30, 2006 to reflect the appropriate revenue recognition. We filed the amended Form 10-QSB on April 9, 2007.

A more detailed discussion of the quantitative restatements to our financial statements as of September 30, 2006 is set forth in the footnotes to our financial statements filed with amended Form 10-QSB on April 9, 2007 and in Management’s Plan of Operation beginning on page 29 of this prospectus.

-5-

            Our corporate structure is as set forth in the following chart:

VALLEY FORGE COMPOSITE TECHNOLOGIES, INC.

a Florida corporation

VALLEY FORGE COMPOSITE TECHNOLOGIES, INC.

a Pennsylvania corporation

(100% Owned Subsidiary)

            Our headquarters is located at River Center I, 50 East River Center Boulevard, Suite 820, Covington, Kentucky 41011.  Our telephone number is (859) 581-5111.

OUR BUSINESS

For the last four years, the Company has focused primarily on the acquisition of the rights to manufacture and distribute the THOR detection system and to develop THOR. The THOR system is a security technology expected to be useful in the detection of explosives, drugs, micro organisms and nuclear materials such as plutonium and weapons grade uranium. THOR has many potential civilian applications including its use as a screening device of air cargo and passenger baggage, shipping containers, and tractor trailers. Valley Forge has been working with the DOE for continued research, design, and production of the first THOR unit. The technology used to manufacture the THOR units is made possible through an exclusive rights agreement with Lebedev. During the past year, THOR has undergone proving trials conducted by various federal executive branch departments. We are currently preparing to manufacture THOR units in anticipation of receiving the necessary government approvals.

THE OFFERING

Securities Offered:	Five million (5,000,000) shares held by Selling Shareholder.
	Three million (3,000,000) Class A warrants held by a Selling Shareholder.
	Three million (3,000,000) shares issuable upon exercise of Class A warrants by a Selling Shareholder.

One million two hundred ninety-six thousand five hundred (1,296,500) units (comprised of one share of $0.001 par value common stock and one warrant exercisable at $1.50 to purchase one share of $0.001 par value common stock) held by Selling Unit Holders.

One million two hundred ninety-six thousand (1,296,500) shares of $0.001 par value common stock contained in Units held by Selling Unit Holders.

One million two hundred ninety-six thousand (1,296,500) Class B warrants to purchase shares of $0.001 par value common stock contained in Units held by Selling Unit Holders.

One million two hundred ninety-six thousand (1,296,500) shares of $0.001 par value common stock issuable upon exercise of Class B warrants contained in Units held by Selling Unit Holders.

-6-

Selling Shareholders and Unit Holders:	Unit holders, warrant holders, and shareholders may sell their common stock or assign or exercise their warrants from time to time. The persons whose securities are registered in this offering are identified in the section starting on page 14.
Shares of Common Stock Outstanding:	Before Private Placement 45,000,000
	Before Public Offering 46,296,500†
	After Public Offering 50,593,000*†
† Does not include shares or warrants that may be issued  at a later date as required by certain price protection or dilution protection agreements.
* If all Class A and Class B warrants are exercised.

Valley Forge will not receive any proceeds from the sale of the common stock by the Selling Shareholders, from the sale of units by Selling Unit Holders, or from sales of warrants by warrant holders. We will receive the cash exercise proceeds from any warrants exercised from time to time.

This is a resale registration statement of registered securities to be sold by persons other than the Company.

This registration statement registers for resale units and common stock previously purchased by certain investors. This registration statement also registers for sale warrants and common stock reserved for the exercise of warrants.

This prospectus covers the registration and resale of units, warrants, and shares of common stock by the Selling Shareholders, Selling Unit Holders, and warrant holders either in the open market or to other investors through negotiated transactions. The units registered hereby may be sold as units in the entirety or as separate warrants and common stock.

Use of Proceeds:	We will use any proceeds received from cash exercise of warrants to provide operating capital. However, we shall be allowed to use up to twenty (20) percent of the net proceeds for payment of officers’, directors’, and employees’ compensation.
Risk Factors:	The securities offered by this prospectus are speculative and involve a high degree of risk. Investors should not buy these securities unless they can afford to lose their entire investment.
Securities Trading Symbol(s):	To be determined. We anticipate NASD authorization for our securities to be quoted on the Over-The Counter Bulletin Board.

SUMMARY OF SELECTED FINANCIAL DATA

The information below should be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements and notes to financial statements included elsewhere in this prospectus.

-7-

	Year ended 12/31/2006			Year ended 12/31/2005
Revenue	$	417,592		$	0
Loss from operations		(1,171,976	)		(567,276	)
Net Income (loss)		(1,179,758	)		(567,144	)
Income (loss) per common share		(0.03	)		(0.01	)
Weighted average number of common shares
Outstanding		45,212,098			45,000,000
Balance Sheet Data
Working capital (deficit)	$	767,288		$	(31,701	)
Total assets		1,229,636			25,265
Total liabilities		393,409			48,229
Shareholders' equity (deficiency)		836,227			(22,964	)

RISK FACTORS

An investment in the securities the Selling Shareholders and the Selling Unit Holders are offering to resell is risky. The securities offered in this prospectus inherently involve a high degree of risk, and you should carefully consider the possibility that you may lose your entire investment. Given this possibility, we encourage you to evaluate the following risk factors and all other information contained in this prospectus before buying the securities of Valley Forge. Any of the following risks, alone or together, could adversely affect our business, our financial condition, or the results of our operations, and therefore the value of your Valley Forge common stock.

Investment in our securities involves a high degree of risk. Prospective investors should carefully consider the following risk factors in addition to other publicly available information in our reports filed with the U.S. Securities and Exchange Commission in deciding whether to purchase the Company’s securities.

· Because the Company had a net loss from operations of $1,171,976 and $567,276 for the years ended December 31, 2006 and December 31, 2005, respectively, we face a risk of insolvency.

· The Company has never earned substantial operating revenue. We have been dependent on equity financing to pay operating costs and to cover operating losses.

· Because we have no significant sales history and are substantially dependent on a major contractor to generate future sales, our future is uncertain if our relationship with that major contractor fails.

· The auditor's report for our operating subsidiary’s December 31, 2006 and December 31, 2005 financial statements includes an additional paragraph that identifies conditions which raise substantial doubt about its ability to continue as a going concern, which means that we may not be able to continue operations unless we obtain additional funding. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

· The Company had no sales revenues in 2005.

-8-

Risks Related to the Company’s Business

There Is Substantial Doubt About the Company’s Ability to Continue as a Going Concern Due to Insufficient Revenues to Cover our Operating Costs.

Our independent auditors added a going concern qualification to their reports issued in connection with their audits of our December 31, 2006 and 2005 financial statements. The auditors noted in their report that the Company generated significant losses from operations, had accumulated deficits of $2,407,723 and $1,227,966 as of December 31, 2006 and 2005, respectively. The Company had positive working capital at December 31, 2006 in the amount of $767,288 largely due to proceeds received from a private offering of its securities. The Company had a working capital deficit of $31,701 at December 31, 2005. These factors raised substantial doubt about our ability to continue as a going concern for our auditors. 

Management anticipates that the Company will incur net losses for the year end results for December 31, 2007. To the extent that we do not generate revenue from the sale of THOR units, then the Company may not have the ability to continue as a going concern. The financial statements which accompany this report do not include any adjustments that might result from the outcome of this uncertainty.

We Expect to Experience Significant Growth in the Future and May Not Be Able to Adapt our Management and Operational Systems to Adequately Handle the Potential Demand for the THOR System Without Unanticipated Significant Disruption or Expense.

Valley Forge anticipates a very positive reception from potential customers to the introduction of our THOR units into the security marketplace. It is possible that the demand for our product will outpace our ability to meet timely the market demand. Since we currently have a few full time employees, our management and labor capacity could experience a disruption in our ability to service our customer demands, and we may not be able to resolve this situation without significant disruption or expense. This in turn could negatively impact our image and the value of our common stock.

We Are Dependent on Key Personnel, Specifically Louis J. Brothers and Larry K. Wilhide, and Have No Employment Agreements With Them.

We are a small company with a few employees and are dependent on the services of Louis J. Brothers, our president, and Larry K. Wilhide, our vice-president. Messrs. Brothers and Wilhide are equal shareholders and their combined voting rights are equal to 76% of the our outstanding common stock. We do not have employment agreements with them, and losing either of their services would likely have an adverse effect on our ability to conduct business. Messrs. Brothers and Wilhide serve as Officers and Directors of Valley Forge. Messrs. Brothers and Wilhide are our founders. Both men have contributed to the survival and growth of the Company for ten years. Mr. Brothers’ government and scientific contacts are essential to the Company’s ability to diversify its product line, including our ability to license, develop, and market future additional products unrelated to the THOR technology. Mr. Wilhide’s engineering and drafting capabilities are essential to our ability to manufacture the technology that we license. Therefore, there is a risk that if either Mr. Brothers or Mr. Wilhide left the Company, there is no guarantee that we could survive.

We Cannot Predict our Future Capital Needs and May Not Be Able to Secure Additional Funding.

We may need to raise additional funds within the next twelve months in order to fund our installation of manufacturing facilities and dealer network. We expect that the majority of these funds will come from the sale of our common shares to public or private investors, which could result in a significant dilution of ownership interests by the holders of our common stock. Also, we cannot assure you that we will be able to obtain the funding we deem necessary to sustain our operations.

-9-

Failure on our Part to Anticipate, Identify, and Respond Effectively to Changing Marketplace Demands for the THOR Technology May Open Doors for Competitors to Manufacture a Similar Technology or to Manufacture Peripheral Items Used to Implement the THOR in Various Situations.

If we are unable to obtain raw materials, or find manufacturing facilities, or respond to our customers’ intended uses for their THOR units, our financial condition may be harmed. Presently, we do not own any manufacturing facilities and are searching for suitable sites. The materials used to build THOR units could become scarce as supply issues may develop from time to time. We do not have long term contracts with any suppliers, and even if we did, there is no guarantee that any particular supplier would not have its own supply or financial difficulties making it hard for them to perform their contracts. Similarly, our customers’ intended applications for their THOR units may require the manufacture and delivery of peripheral items that we are unable to produce or deliver timely. Any of these situations could be detrimental to our overall business and could encourage competitors to attempt to service our customer base and reduce our market share. Any of these situations could negatively impact our stock price.

Our Success Depends on our Ability to Attract and Retain Key Employees in Order to Support our Existing Business and Future Expansion.

We are actively recruiting qualified candidates to fill key executive positions within the Company. There is substantial competition for experienced personnel, which we expect to continue. We will compete for experienced personnel with companies who have substantially greater financial resources than we do. If we fail to attract, motivate and retain qualified personnel, it could harm our business and limit our ability to be successful.

If We Are Not Able to Successfully Protect our Intellectual Property, our Ability to Capitalize on the Value of the THOR Technology May Be Impaired.

Even though we believe that there is no competitor currently close to being able to introduce a security technology with the portability and accuracy of the THOR technology, it is certain that imitators will appear who may create adaptive technologies that achieve similar results to THOR. We have tried to minimize the deconstruction and adaptation of the THOR technology by potential competitors by deliberately not patenting the core technology because we do not want to make a public record available that will allow anyone to easily see our methods. However, it is certain that new technologies will appear in the marketplace eventually, and we cannot know for certain how long our lead time will be over potential competition. If we are not successful at protecting our intellectual property, our ability to capitalize on the value of the THOR technology may be impaired.

Risks Related to Investment

We Expect the Price of our Common Stock to Be Volatile. As a Result, Investors Could Suffer Greater Market Losses in a Down Market than They Might Experience with a More Stable Stock. Volatility in our Stock May also Increase the Risk of Having to Defend a Securities Class Action Suit, which Could Be Expensive and Divert Management’s Attention from Managing our Business.

The stock markets generally, and the OTC Bulletin Board in particular, have experienced extreme price and volume fluctuations that are often unrelated and disproportionate to the operating performance of a particular company. These market fluctuations, as well as general economic, political and market conditions such as recessions or interest rate or international currency fluctuations, may adversely affect the market for the common stock of the company. In the past, class action litigation has often been brought against companies after periods of volatility in the market price of their securities. If such a class action suit is brought against the Company it could result in substantial costs and a diversion of management’s attention and resources, which would hurt business operations.

-10-

Our Stock Value Is Dependent on our Ability to Generate Net Cash Flows.

A large portion of any potential return on our common stock will be dependent on our ability to generate net cash flows. If we can not operate our business at a net profit, there will be no return on shareholders’ equity, and this could result in a loss of share value. No assurance can be given that we will be able to operate at a net profit now or in the future.

Our Common Stock Value May Decline after the Registered Offering.

Sales of our common stock in the public market following our registered offering could lower the market price of our common stock. The sales may also make it more difficult for the Company or its investors to sell current securities in the future at a time and price that the Company or its current investors deem acceptable or even to sell such securities at all. The risk factors discussed in this “Risk Factors” section may significantly affect the market price of our stock. The low price of our stock may result in many brokerage firms declining to deal in our stock. Even if a buyer finds a broker willing to effect a transaction in our common stock, the combination of brokerage commissions, state transfer taxes, if any, and other selling costs may exceed the selling price. Further, many lending institutions will not permit the use of this stock as collateral for loans. Thus, investors may be unable to sell or otherwise realize the value of their investments in our securities.

The number of shares that could be issued for our immediate capital requirements could lead to a large number of shares being placed on the market which could exert a downward trend on the price per share. If the supply created by these events exceeds the demand for purchase of the shares the market price for the shares of common stock will decline.

The Number of Shares to Be Made Available in the Registered Offering Could Encourage Short Sales by Third Parties, which Could Contribute to a Future Decline in the Price of our Stock.

In our circumstances, the provision of a large number of common shares to be issued upon the exercise of warrants or sold outright by existing shareholders has the potential to cause a significant downward pressure on the price of common stock, such as ours, when a market develops for our common stock. This would be especially true if the shares being placed into the market exceeds the market’s ability to take up the increased number of shares or if the Company has not performed in such a manner to encourage additional investment in the market place. Such events could place further downward pressure on the price of the common stock. As a result of the number of shares that could be made available on the market, an opportunity exists for short sellers and others to contribute to the future decline of our stock price. Persons engaged in short-sales first sell shares that they do not own and, thereafter, purchase shares to cover their previous sales. To the extent the stock price declines between the time the person sells the shares and subsequently purchases the shares, the person engaging in short-sales will profit from the transaction, and the greater the decline in the stock price the greater the profit to the person engaging in such short-sales. If there are significant short-sales of our stock, the price decline that would result from this activity will cause our share price to decline even further, which could cause any existing shareholders of our stock to sell their shares creating additional downward pressure on the price of the shares. It is not possible to predict how much the share price may decline should a short sale occur. In the case of some companies that have been subjected to short-sales the stock price has dropped to near zero. This could happen to our securities.

-11-

Our Shareholders May Face Significant Restrictions on the Resale of our Stock Due to State “Blue Sky” Laws.

Each state has its own securities laws, often called “blue sky” laws, which (1) limit sales of stock to a state’s residents unless the stock is registered in that state or qualifies for an exemption from registration and (2) govern the reporting requirements for broker-dealers and stock brokers doing business directly or indirectly in the state. Before a security is sold in a state, there must be a registration in place to cover the transaction, or it must be exempt from registration. Also, the broker must be registered in that state. We do not know whether our stock will be registered, or exempt, under the laws of any states. A determination regarding registration will be made by the broker-dealers, if any, who agree to serve as the market-makers for our stock. There may be significant state blue sky law restrictions on the ability of investors to sell, and on purchasers to buy, our stock.

Investors should consider the resale market for our securities to be limited. Shareholders may be unable to resell their stock, or they may be unable to resell it without the significant expense of state registration or qualification.

Our Stock May Be Subject to Significant Restrictions on Resale Due to Federal Penny Stock Regulations.

Our common stock differs from many stocks because it is a “penny stock.” The Securities and Exchange Commission (“SEC”) has adopted a number of rules to regulate penny stocks. These rules require that a broker or dealer, prior to entering into a transaction with a customer, must furnish certain information related to the penny stock. The information that must be disclosed includes quotes on the bid and offer, any form of compensation to be received by the broker in connection with the transaction and information related to any cash compensation paid to any person associated with the broker or dealer.

These rules may affect your ability to sell our shares in any market that may develop for our stock. Should a market for our stock develop among dealers, it may be inactive. Investors in penny stocks are often unable to sell stock back to the dealer that sold it to them. The mark-ups or commissions charged by broker-dealers may be greater than any profit a seller can make. Because of large dealer spreads, investors may be unable to sell the stock immediately back to the dealer at the same price the dealer sold it to them. In some cases, the stock value may fall quickly. Investors may be unable to gain any profit from any sale of the stock, if they can sell it at all.

Potential investors should be aware that, according to the SEC Release No. 34-29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. These patterns include:

 ·control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer;

 ·manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;

 ·"boiler room" practices involving high pressure sales tactics and unrealistic price projections by inexperienced sales persons;

 ·excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and

 ·the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the inevitable collapse of those prices with consequent investor losses.

-12-

Investors Must Contact a Broker-Dealer to Trade Over-the-Counter Bulletin Board or Pink Sheet Securities. As a result, Investors May Not Be Able to Buy or Sell our Securities at the Times They May Wish.

Even though we anticipate that our securities will be quoted on the Over-The-Counter (“OTC”) Bulletin Board or the Pink Sheets (www.pinksheets.com), they may not permit our investors to sell securities when and in the manner that they wish. Because there are no automated systems for negotiating trades on the OTC Bulletin Board or the Pink Sheets, they are often conducted via telephone. In times of heavy market volume, the limitations of this process may result in a significant increase in the time it takes to execute investor orders. When investors place market orders to buy or sell a specific number of shares at the current market price it is possible for the price of a stock to go up or down significantly during the lapse of time between placing a market order and its execution.

Our Warrants May Not Develop a Trading Market Before Their Time of Expiration.

Purchasers of our Class A and Class B warrants may not be able to resell the warrant before it expires. Class B warrants have a lifetime of only six (6) months, and Class A warrants have a lifetime of two (2) years, from the date that the Form SB-2 registration statement in which they are registered is declared effective. In the event a warrant is acquired by a new purchaser, that purchaser may not be able to resell the warrant, and, if the purchaser does not exercise the warrant, the purchaser will suffer a complete capital loss of his or her entire investment in the warrant.

If We Fail to Remain Current on the Reporting Requirements that Apply to Us, We Could Be Removed from the NASDAQ or the OTC Bulletin Board, if our Common Stock Is Quoted in those Forums, which Would Limit the Ability of Broker-Dealers to Sell our Securities and the Ability of Stockholders to Sell their Securities.

Companies trading on the OTC Bulletin Board or the NASDAQ must be reporting issuers under Section 12 of the Exchange Act, and must be current in their reports under Section 13, in order to maintain price quotation privileges on the OTC Bulletin Board or the NASDAQ. Regardless of which of those two quotation services our common stock may one day be quoted, if we fail to remain current on our reporting requirements, shares of our common stock could be removed from whichever quotation service we then were on. As a result of that removal, the market liquidity for our securities could be severely adversely affected by limiting the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market.

If Price Protection And/Or Anti-Dilution Mechanisms Pertaining To Selling Shareholders, Selling Unit Holders And/Or Selling Warrant Holders’ Interests Are Triggered, The Effect Could Require A Restructuring Of The Company’s Securities.

Selling Shareholders are selling 5,000,000 shares or 10.8% of the issued and outstanding common stock of the Company. Selling Shareholders are also selling 3,000,000 Class A warrants to purchase 3,000,000 shares of Company stock. The Selling Shareholders have anti-dilution rights for a period of two years from the effective date of this registration statement. The anti-dilution mechanism enables the Selling Shareholders and their assignees to have the same percentage of ownership and the same percentage of voting rights in their class of common stock regardless whether the Company or its successors or its assigns may thereafter increase or decrease the authorized number of shares of Company common stock or increase or decrease the number of shares issued and outstanding. The details of the anti-dilution protection are set forth in the Registration Rights Agreement, dated July 6, 2006 (incorporated by reference to the Company’s Form 8-K filed July 11, 2006, Exhibit 10.1).

-13-

The Selling Unit Holders are selling 1,296,500 shares of common stock and 1,296,500 Class B warrants to purchase an additional 1,296,500 shares of the Company’s common stock. For a period of one year from the effective date of this registration statement for the common stock component of the unit, and for a period of six months from the effective date of this registration statement for the Class B warrant component of the unit, Selling Unit Holders are protected from any sale by the Company of its common stock at a price less than the Selling Unit Holders' $1.00 per unit purchase price or from any sale by the Company of warrants at a price less than the $1.50 exercise price of the Selling Unit Holders’ Class B warrants. A formula dictates the amount of stock and/or warrants to be issued as compensation. The price protection mechanism enables the Selling Unit Holders to receive compensation in the form of additional stock and/or warrants. The details of the price protection mechanism are set forth in the Form of Investment Letter attached to this registration statement as Exhibit 10.4.

Potential investors are warned that the effects on the Company’s corporate structure and on an investor’s investment could be drastic and severely damaging if the price protection or anti-dilution mechanisms were triggered, and even more so if both compensatory mechanisms were triggered. The result could be that the value of an investor’s investment could effectively be extinguished due to the dilutive effects of a large increase in the number of shares issued.

SELLING SHAREHOLDERS AND SELLING UNIT HOLDERS

The following tables present information regarding the Selling Shareholders and the Selling Unit Holders.

None of the Selling Shareholders or Selling Unit Holders presently holds a position or office with Valley Forge. However, the Selling Shareholders, have present or former relationships with us.  For example, Charles J. Scimeca, Tony N. Frudakis, and George Frudakis, former shareholders of the now dissolved Quetzal Capital Funding 1, Inc., a former controlling shareholder of the Company, each own one third of Quetzal Capital Funding 1, Inc.'s 5,000,000 Company shares, or 1,666,667 shares each of the Company's common stock  Also, Coast To Coast Equity Group, Inc. is currently engaged as a consultant to the Company. Messrs. Charles J. Scimeca, Dr. Tony N. Frudakis, and George Frudakis are co-equal shareholders of Coast To Coast Equity Group, Inc.

The Selling Unit Holders are all purchasers of restricted units of the Company’s securities whose purchase transactions were made in reliance from the exemption from Registration provided by Regulation D Rule 506 promulgated under the Securities Act of 1933, as amended.

Selling Security Holder	Shares held		Percentage of shares			Shares sold			Percentage of
	Before  offering		before offering (1)			in offering			shares after offering
Quetzal Capital		5,000,000		10.0	%		5,000,000			0	%
Funding 1, Inc. (now Charles J. Scimeca, Tony N. Frudakis, and George Frudakis, individually)
Coast To Coast Equity		0		0.0	%		3,000,000(2	)		0	%
Group, Inc.

-14-

Selling Unit Holder	Units held		Percentage of shares		Shares sold		Percentage of
	before offering		before offering (3)		in offering (4)		shares after offering
Bank of Commerce FBO
Nathan A. Long IRA #1		40,500		-		81,000		0	%
Nathan Long		60,500		-		121,000		0
Debra Elenson		130,000		0.20		260,000		0
David C. Marchese		90,000		0.19		180,000		0
Lawrence A. Doyle, Jr.		50,000		-		100,000		0
Scott Heiken		50,000		-		100,000		0
Brad M. King		50,000		-		100,000		0
Doug Broadright		46,000		-		92,000		0
Ann Fink		40,000		-		80,000		0
Thomas P. Connor		30,000		-		60,000		0
Joseph & Priscilla Gratton		30,000		-		60,000		0
Bradley A. Sacks		30,000		-		60,000		0
William A. Rothstein		150,000		0.32		300,000		0
George G. Broadright		25,000		-		50,000		0
David A. Casinelli		25,000		-		50,000		0
Steven M. & Marti B. Wymer		25,000		-		50,000		0
William Ros		20,000		-		40,000		0
Bank of Commerce FBO
John C. Long IRA #1		10,000		-		20,000		0

Lisa Baron	10,000	-	20,000	0
James L. Black	10,000	-	20,000	0
Penny C. Brown	10,000	-	20,000	0
Richard Capasso	10,000	-	20,000	0
Marlene J. Clairmont	10,000	-	20,000	0
Joseph J. Domsic	10,000	-	20,000	0
R. Scott Dotson	10,000	-	20,000	0
Sanford D. & Robin Goldfine	10,000	-	20,000	0
Boyd A. Isley, Jr.	10,000	-	20,000	0
Bradford T. Meek	10,000	-	20,000	0
Howard V. Mills	100,000	0.20	200,000	0
Natalie D. Mills	10,000	-	20,000	0
John A. Paciello	10,000	-	20,000	0
Robin Peacock	10,000	-	20,000	0
John H. Piccin	20,000	-	40,000	0

-15-

Selling Unit Holder (continued)	Units held	Percentage of shares	Shares sold	Percentage of
	Before offering	before offering (3)	in offering (4)	shares  after offering

George D. Poole, II	10,000	-		20,000	0
Richard Puckhaber, Jr.	10,000	-		20,000	0
Randy & Vanessa A. Stull	10,000	-		20,000	0
Robert Stull	10,000	-		20,000	0
Darlene A. Walton	10,000	-		20,000	0
Charles Wilensky	12,000	-		24,000	0
Leonard Wilensky	10,000	-		20,000	0
Andrew & Elayne Britt	7,500	-		15,000	0
Longterm Holdings, LLC	6,000	-		12,000	0
Mitra Mansoory Savar	6,000	-		12,000	0
Beadros Asare	5,000	-		10,000	0
Bertina M. Brothers	5,000	-		10,000	0
Evelyn Colletti	5,000	-		10,000	0
Alan Goldberg	5,000	-		10,000	0
Ross Grossman	5,000	-		10,000	0
Dennis J. LaSota	5,000	-		10,000	0
Richard S. Relac	5,000	-		10,000	0
Ann C. Runyon	5,000	-		10,000	0
Russell C. & Luz M. Weigel, III	5,000	-		10,000	0
Stephen & Tracy Cunningham	2,500	-		5,000	0
Miles L. & Florence A. Lemley	2,500	-		5,000	0
Gregory T. Sullivan	2,000	-		4,000	0
Philip DePasquale	1,000	-		2,000	0
All Selling Unit holders as a group		2.8	%

(1)Based upon 45,000,000 shares outstanding.

(2)Expressed as common shares issued upon exercise of Class A warrants,

(3)Based upon 46,296,500 shares outstanding

(4)Expressed as common shares plus shares issuable upon exercise of Class B warrants.

USE OF PROCEEDS

Valley Forge will not receive any proceeds from the sale of the shares by any of the Selling Shareholders, unless a shareholder pays cash to exercise a warrant. The Company expects to use the majority of the proceeds derived from warrant exercises for development and manufacture of the THOR LVX photonuclear detection system. However, the Company shall be allowed to use up to twenty (20) percent of the net proceeds for payment of officers’, directors’, and employees’ compensation. The balance will be used for general working capital, including but not limited to raw materials, market development and sales.

-16-

DETERMINATION OF OFFERING PRICE

The shares of Valley Forge common stock are being offered for resale by the Selling Shareholders and Unit Holders at estimated prices ranging between $1.50 and $2.00 per share. Since there is no market price for our securities, the estimated prices are based upon the maximum strike price per warrant held by that Selling Shareholder or Selling Unit Holder. Nevertheless, the market price for our securities will be the price paid by a purchaser.

During the effective period of this Form SB-2 registration statement, our common stock that is issued upon exercise of warrants could trade above or below the strike price of the warrant. The warrant strike prices and the amount of shares issuable are as follows: $1.00 per share (one million Class A warrants eligible); $1.50 per share (one million Class A and one million two-hundred ninety-six thousand five hundred Class B warrants eligible), and $2.00 per share (one million Class A warrants eligible). Therefore, it is possible that the market price per share of these common stock issues presumably would be at least above the strike price upon exercise but may fall below the exercise price because of the dilutive effect of additional outstanding shares in the float. Accordingly, the actual offering price of any Selling Shareholder’s or Selling Unit Holder’s common stock could vary in a range below $1.00 per share to above $2.00 per share, with the likely near term trading range expected to be approximately $1.00 per share or higher depending on the fluctuating demand for the common stock.

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Potential investors in our securities should know that at the present time there is no established public trading market for any of our securities. A public trading market may develop over time if there is enough public interest in our securities.

Our shareholder base is small. We currently have 71 shareholders, of which 56 shareholders are the Selling Unit Holders in this prospectus and registration statement, and three are the former shareholders of Quetzal Capital Funding 1, Inc., which was the former controlling shareholder of Quetzal Capital 1, Inc. Quetzal Capital Funding 1, Inc.'s former shareholders are collectively registering hereby five million (5,000,000) shares. The twelve other shareholders of the Company were the shareholders of Valley Forge Composite Technologies, Inc., a Pennsylvania corporation. Of our 45,000,000 shares issued and outstanding, as of July 6, 2006, Messrs Brothers, Wilhide, and officer Randy Broadright beneficially own 76%, or 38,160,000 shares. The other nine former shareholders of Valley Forge Composite Technologies, Inc., a Pennsylvania corporation, will be eligible to sell their collective 1,840,000 shares without restriction after July 5, 2008 pursuant to Rule 144. Three million Class A warrants and three million shares issuable upon the exercise of Class A warrants are being registered hereby. An additional 1,296,500 units are registered hereby, which contain 1,296,500 shares and 1,296,500 Class B warrant rights to purchase an additional 1,296,500 shares.  These Class B warrants expire six (6) months from the effective date of this registration statement.

We may seek additional equity investors from time to time as our capital needs require.

PLAN OF DISTRIBUTION

The Selling Shareholders, Selling Unit Holders, and Selling Warrant Holders may sell their securities covered by this prospectus from time to time in any market where our securities are quoted. There is no market for our securities at the present time. The Selling Shareholders, Selling Unit Holders, and Selling Warrant Holders will sell their securities through broker dealers of their own choosing or in private transactions. Selling Shareholders, the former shareholders of Quetzal Capital Funding 1, Inc. and/or Coast To Coast Equity Group, Inc., or brokers, dealers or agents that participate in the distribution of the common stock, may be deemed to be underwriters, and any discounts on the sale of common stock by them and any discounts, concessions, or commissions they receive may be deemed to be underwriter discounts and commissions under the Securities Act.

-17-

Under the securities laws of some states, securities may be sold in such states only through registered or licensed brokers or dealers. We will inform the Selling Shareholders, Selling Unit Holders, and Selling Warrant Holders that any underwriters, brokers, dealers or agents effecting transactions on behalf of them must be registered to sell securities in all 50 states. In addition, in some states the securities may not be sold unless the securities have been registered or qualified for sale in such state or an exemption from registration or qualification is available and there is compliance with those exemptions.

Valley Forge will pay all the expenses of the registration, offering, and sale of the securities offered to the public under this prospectus other than commissions, fees, and discounts of underwriters, brokers, dealers or agents. We estimate the expenses of the offering, to be borne by Valley Forge, will be approximately $30,000. We will not receive any proceeds from the sale of the shares of common stock by the Selling Shareholders or Selling Unit Holders. We will, however, receive proceeds from the cash exercise of Class A or Class B warrants.

The Selling Shareholders, Selling Unit Holders, and Selling Warrant Holders should be aware that the anti-manipulation provisions of Regulation M under the Exchange Act will affect purchases and sales of securities by the Selling Shareholders, Selling Unit Holders, and Selling Warrant Holders  that there are restrictions on market-making activities by persons engaged in the distribution of the securities. Under Regulation M, the Selling Shareholders, Selling Unit Holders, and Selling Warrant Holders, or their agents may not bid for or purchase, or attempt to induce any person to bid for or purchase, shares of our securities while they are distributing securities covered by this prospectus. Accordingly, except as noted below, the Selling Shareholders, Selling Unit Holders, and Selling Warrant Holders are not permitted to cover short sales or purchase shares while the distribution is taking place. We will advise the Selling Shareholders, Selling Unit Holders, and Selling Warrant Holders that if a particular offer of securities is to be made on terms materially different from the information set forth in the above Plan of Distribution, that a post-effective amendment to the accompanying registration statement must be filed with the Securities and Exchange Commission.

We are not registering in this registration statement certain hypothetical securities that could be issued as compensation to original Unit Holders in the event a price protection mechanism is triggered. Hypothetical securities contractually required to be issued upon the occurrence of certain events will be registered at the time of, and if, the triggering event occurs. Prospective purchasers of a Unit and the Class B warrant and common stock contained in a Unit offered for resale in this registration statement are not eligible to receive the benefits of the price protection mechanism. The details of the price protection mechanism are set forth in the Form of Investment Letter attached to this registration statement as Exhibit 10.4.

LEGAL PROCEEDINGS

The Company is not a party to any actual or threatened legal proceedings.

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS & CONTROL PERSONS

The following persons are officers and directors of Valley Forge as of the date of this prospectus:

Name	Age	Position
Louis J. Brothers	54	Chairman of the Board of
		Directors, Chief Executive Officer,
		and President
Larry K. Wilhide	58	Vice-President, Engineering, and Director

-18-

Louis J. Brothers

A founding shareholder of VFCT, since 1997 Louis J. Brothers has been the president and chairman of the board of directors of VFCT, and he became Chairman of the Board of Directors upon execution of the July 6, 2006 Share Exchange Agreement. Mr. Brothers has more than 20 years of experience in marketing, marketing support, product management and logistics in industrial products. Mr. Brothers has extensive international business experience having worked in Europe, Russia, China and Japan. In China, he was part of the management team that supervised the construction of three large industrial plants. Mr. Brothers was responsible for increasing his products’ market share in the bearing industry from 2% to 95%, in the process making valuable contacts, building business relationships with private manufacturers and the research communities and gaining important knowledge in the manufacturing and technology market segments.

            From 1995 to 1999, Mr. Brothers was in charge of mid-Atlantic sales for Novamax. From 1994 to 1995, Mr. Brothers was the national sales manager of Process Research, located in Ewing, New Jersey. From 1978 to 1994 Mr. Brothers was an assistant product manager and then the product manager of two to four product lines at Quaker Chemical, located in Conshohosken, Pennsylvania. Mr. Brothers holds a Bachelor of Science Degree in Interdisciplinary Sciences from the University of Cincinnati.

            Mr. Brothers, as a controlling shareholder, will most likely choose to remain a director of the Company for the foreseeable future.

Larry K. Wilhide

            Larry K. Wilhide is a founder of VFCT, and since its inception in 1997 has been a director and the vice-president of engineering. On July 6, 2006, Mr. Wilhide became a director of the Company upon the execution of the Share Exchange Agreement. Mr. Wilhide is a part-time employee of VFCT and since 2000 continues to work for SKF Bearing, Inc. in Hanover, Pennsylvania as a sub-contractor where he performs general engineering and design services.

            Mr. Wilhide has worked as a design engineer on projects for aerospace bearings for over 25 years including cage, retainer design and spherical bearing refurbishing. He has supported general machining and grinding operations. He was team leader for CAD and CNC programming. Additionally, Mr. Wilhide served in the U.S. Army in Korea where he held primary responsibility for arming nuclear warheads. Mr. Wilhide holds a Bachelors Degree in Mechanical Engineering.

            Mr.Wilhide, as a controlling shareholder, will most likely choose to remain a director of the Company for the foreseeable future.

Randy Broadright

Randy Broadright, age 40, is the Company's director of aerospace development. He has over fourteen years of military experience in operations and logistics of cargo transport and security. Mr. Broadright served as Squadron Chief Test Pilot in charge of flight test and development of several avionics, guidance, and countermeasures systems. He contributes a unique perspective to baggage and cargo screening through his participation in annual anti-terrorism training as well as his experiences as a pilot for a major airline. Mr. Broadright holds a Bachelor of Arts degree from Miami University. Mr. Broadright is an officer of the Company and is not a member of the board of directors.

-19-

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The Company has 46,296,500 shares of common stock issued and outstanding. The table below assumes and projects the exercise of 3,000,000 Class A warrants by Coast To Coast Equity Group, Inc., which raises the issued and outstanding shares to 49,296,500. Beneficial owners and management will have the following holdings of the Company following the exercise of the Class A warrants:

TITLE OF CLASS	NAME AND ADDRESS OF BENEFICIAL OWNER	AMOUNT & NATURE OF BENEFICIAL OWNERSHIP	PERCENT OF CLASS
Common Stock ($0.001 par value)	Louis & Roe Brothers, TEN ENT 50 E. River Center Boulevard, Suite 820, Covington, KY 41011	18,880,000	38.3%
Common Stock ($0.001 par value)	Larry & Pat Wilhide, TEN ENT 50 E. River Center Boulevard, Suite 820, Covington, KY 41011	18,880,000	38.3%
Common Stock ($0.001 par value)	Coast To Coast Equity Group, Inc. (1) 9040 Town Center Parkway Bradenton, FL 34202	3,000,000	6.1%
Common Stock ($0.001 par value)	Charles J. Scimeca (1) 9040 Town Center Parkway Bradenton, FL 34202	1,666,666.6	3.4%
Common Stock ($0.001 par value)	Tony N. Frudakis (1) 1621 West University Parkway Sarasota, FL 34243	1,666,666.6	3.4%
Common Stock ($0.001 par value)	George Frudakis (1) 7935 213th St E Bradenton, FL 34202-6301	1,666,666.6	3.4%
Common Stock ($0.001) par Value	Directors and Executive Officers as a Group	37,760,000	76.5%

(1) The shareholders of Coast To Coast Equity Group, Inc. are Tony N. Frudakis, George Frudakis, and Charles J. Scimeca. Each of these individuals also directly owns 1,666,666.6 shares of the Company’s common stock. Coast To Coast Equity Group, Inc. is a party to a consulting agreement and warrant agreement with the Company which could enable its shareholders as a group, as beneficial owners, to acquire a total of 16.3% of the Company’s issued and outstanding common stock on a non-diluted basis.   Coast To Coast Equity Group, Inc. also holds a debenture convertible into common stock, but the conversion, if exercised, would not materially change its percentage equity ownership of the Company.

There are no arrangements or agreements providing for the right to acquire additional beneficial ownership by the Company’s management. There are no preconceived arrangements providing for a specific change of control of management of the Company upon the happening of certain future events.

-20-

Coast To Coast Equity Group, Inc., Charles J. Scimeca, George Frudakis, and Tony N. Frudakis are 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 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, will continue in effect for a period two years from the effective date of this registration statement and are assignable in private transactions, provided that the shares are not sold in market transactions.

DESCRIPTION OF SECURITIES

Common Stock

As of November 10, 2006, the number of issued and outstanding shares of the Company's common stock was 46,296,500. The number of common stock shares authorized is 100,000,000 of $0.001 par value common stock. The common stock holds voting rights of one vote per share, is entitled to dividends when and if declared out of funds legally available therefor, but has no preemptive rights.

Shareholders: As of November 10, 2006, there were 69 shareholders of record. The March 14, 2007 dissolution of corporate shareholder Quetzal Capital Funding 1, Inc. resulted in the Company gaining two additional shareholders for a total of 71 due to the splitting of Quetzal Capital Funding 1, Inc.'s shares of Company common stock between three individual owners of Quetzal Capital Funding 1, Inc.

Dividends: The Company has not declared a cash dividend during the fiscal years ending December 31, 2004 , 2005, and 2006.

Warrants and Units

As of November 10, 2006, the number of issued and outstanding Class A and Class B warrants is 4,296,500. Of these, 3,000,000 are Class A warrants issued to a consultant to the Company, Coast To Coast Equity Group, Inc. (“CTCEG”) in exchange for services pursuant to a Consulting Agreement and a Warrant Agreement.  These two agreements are dated July 6, 2006 and are filed as exhibits to the Company’s Form 8-K filed with the SEC on July 11, 2006.  Because CTCEG has performed part of its obligation in the Consulting Agreement, the Class A warrants are deemed to have been earned by CTCEG and are being expensed by the Company accordingly.   These Class A warrants have certain rights identified in the Warrant Agreement  In general, CTCEG is entitled to exercise its warrants at strike prices between $1.00 per share and $2.00 per share. In particular, upon exercise of a Class A warrant, CTCEG is not required to pay cash to the Company if the strike price of the warrant it exercises is lower than the market price of a share of the Company’s common stock. This cashless exercise feature is designed to incentivize CTCEG's efforts at marketing the Company and enhancing shareholder value.  The warrants issued to CTCEG are effective for a period of two years from the effective date of this Form SB-2 registration statement and prospectus. The warrants have no market at the present time.

The Company issued the remaining 1,296,500 Class B warrants as part of a unit offering. A unit contains one share of restricted common stock and one restricted Class B warrant. These Class B warrants are exercisable at $1.50 per share and do not contain the cashless exercise rights provided to CTCEG. The Class B warrants, if not exercised, expire six (6) months after this Form SB-2 registration statement and prospectus are declared effective. The full text of the Securities Purchase Agreement that describes the Class B warrants in detail is attached hereto as an Exhibit. The units also have price protection rights for a period of time. The Class B warrants have price protection rights for a period of six (6) months, while the common stock contained in the units have price protection rights for one (1) year. The price protection mechanism enables the holder of the common stock and/or warrant to receive additional shares and/or warrants if during the operative time period the price at which future common stock or warrants are sold is less than the price per unit paid for his or her unit.

-21-

The Class A and Class B warrants  are freely assignable.

The Company at this time is not registering securities issuable as a price protection mechanism for unit holders. The Company does not foresee issuing securities at a price that would trigger the price protection mechanism afforded to these Regulation D offering investors. Nevertheless, if the price protection mechanism is triggered, the Company would register the price protection securities at the time of issuance.

Convertible Debenture

On August 11, 2006, the Company issued a convertible debenture to 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 VFCT and Quetzal Capital 1, Inc. (n/k/a the Company), which occurred on July 6, 2006, or upon the date of an “event of default” which would include any proceedings by VFCT to seek protection due to insolvency. The interest rate is of 4% per annum and runs from August 11, 2006. The amounts due may be paid in cash or, upon mutual agreement of the parties, cash equivalents including but not limited to payment in the form of the Company’s common stock valued at $1.00 per share; or upon mutual agreement of the parties, CTCEG may apply amounts due toward the cash exercise of the 3,000,000 Class A warrants granted to CTCEG as stated in detail within the Consulting agreement as Share Based Payments which is described in Note 1 of the financial statements.

INTEREST OF NAMED EXPERTS AND COUNSEL

No ″Expert″ or ″Counsel″ (as defined by Item 509 of Regulation S-B promulgated pursuant to the Securities Act of 1933) whose services were used in the preparation of this Form SB-2 registration statement and prospectus was hired on a contingent basis. The Company’s securities counsel, Russell C. Weigel, III, and his wife, are purchasers of 5,000 shares of the Company’s common stock and are among the Selling Shareholders whose common stock will be registered pursuant to this Form SB-2 registration statement and prospectus.

Legal Matters

The validity of the shares of common stock offered hereby have been passed upon for Valley Forge by Mr. Russell C. Weigel, III, an attorney admitted in the District of Columbia, and the States of Florida and New York.

Experts

The financial statements of Valley Forge as of December 31, 2006 and 2005 and the years then ended, were audited by Sherb & Co., LLP and by Morison Cogen LLP, respectively, Independent Registered Public Accounting Firms, as stated in their reports appearing herein dated March 30, 2007 and May 2, 2006, respectively.

Following the share exchange transaction dated July 6, 2006 between Quetzal Capital 1, Inc., a Florida corporation, and Valley Forge Composite Technologies, Inc., a Pennsylvania corporation, the resulting Company elected to engage the auditors of Quetzal Capital 1, Inc. as their current audit firm. There were no disagreements between Morison & Cogen, LLP and Valley Forge Composite Technologies, Inc. leading to its decision to change auditors.

-22-

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company entered into a Consulting Services Agreement with Coast To Coast Equity Group, Inc. (“CTCEG”) on July 6, 2006. CTCEG is owned by the same three shareholders that own Quetzal Capital Funding 1, Inc., the former controlling shareholder of Quetzal Capital 1, Inc. Quetzal Capital 1, Inc. is the former shell company now renamed as Valley Forge Composite Technologies, Inc., a Florida corporation, and is the parent corporation of Valley Forge Composite Technologies, Inc., a Florida corporation. While CTCEG is neither an affiliate of the Company nor of Quetzal Capital Funding 1, Inc., CTCEG is controlled by Quetzal Capital Funding 1, Inc.’s former shareholders, Charles J. Scimeca, George Frudakis, and Tony N. Frudakis.

The Consulting Services Agreement provides for CTCEG to be compensated pursuant to a Warrant Agreement wherein CTCEG will receive 3,000,000 warrants to purchase the Company’s $0.001 par value common stock at prices ranging between $1.00 per warrant and $2.00 per warrant. The common stock issuable upon exercise of the 3,000,000 warrants is registered hereby in this prospectus and registration statement.

The Consulting Services Agreement in general provides for the following services to be provided to the Company:

· Organize and disseminate the Company’s information to potential investors and to the investment community as part of the Company’s responsibilities to disseminate material information pursuant to the Securities Exchange Act of 1934, as amended, and in compliance with other applicable laws;

· Appoint and pay for a legal counsel in connection with the preparation of corporate authorizations, board minutes, agreements, and proxy agreements on behalf of the Company in order for the Company to fulfill its prerequisites to execution of the Share Exchange Agreement dated July 6, 2006; and

· Maintain a branch office and all expenses thereof for the benefit of the Company for the two (2) year period from July 6, 2006.

CTCEG has performed the second bullet point above and is performing the first and third bullet points above. The Consulting Services Agreement and the Warrant Agreement are filed as exhibits to the Company’s Form 8-K filed with the U.S. Securities and Exchange Commission on July 11, 2006.

CTCEG, Charles J. Scimeca, George Frudakis, and Tony N. Frudakis are protected from dilution of their percentage ownership of the Company. Non-dilution rights, as defined by the Registration Rights Agreement attached as an exhibit to the Company’s Form 8-K filed with the SEC on July 11, 2006, 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 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, will continue in effect for a period two years from the effective date of this registration statement, for all shares of the Company’s common stock then owned by either entity or by their assigns. The non-dilution rights will not attach to any shares sold by either entity in open market transactions.

On August 11, 2006, the Company issued a convertible debenture to CTCEG in the amount of $42,000 in exchange for cash received. The interest rate is of 4% per annum and runs from August 11, 2006. The amounts due may be paid in cash or cash equivalents, including but not limited to payment in the form of the Company’s common stock valued at $1.00 per share, or CTCEG may apply amounts due toward the cash exercise of CTCEG’s Warrant Agreement.

During the year ended December 31, 2006, Louis Brothers advanced the Company $55,386.

-23-

DESCRIPTION OF BUSINESS

This prospectus contains forward-looking statements which involve risks and uncertainties. Actual results could differ materially from those discussed in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in "Risk Factors".

Share Exchange Agreement

During fiscal year 2006, the Company executed a share exchange transaction with Valley Forge Composite Technologies, Inc., a Pennsylvania corporation (“VFCT”), whereby the Company became the 100% owner of VFCT. The share exchange transaction occurred on July 6, 2006. Prior to that date, the Company was a shell corporation known as Quetzal Capital 1, Inc., a Florida corporation (Quetzal). Quetzal was incorporated in Florida on June 27, 2005 and became a voluntary reporting company pursuant to section 12(g) of the Exchange Act, on or about August 1, 2005.

As a result of the share exchange, Quetzal’s status as a shell corporation ceased, and the entire business of the parent company became identical with its subsidiary, VFCT. Simultaneously with the share exchange, the sole director of Quetzal resigned, and VFCT’s management assumed control of Quetzal. Also on July 6, 2006, Quetzal changed its name to Valley Forge Composite Technologies, Inc., a Florida corporation. (Hereafter, in this prospectus, the consolidated operations of the parent and subsidiary will be referred to as the “Company”). The Company has not materially reclassified, merged, consolidated, purchased or sold any significant amount of assets other than in the ordinary course of business, and the Company has not been the subject of any bankruptcy, receivership or similar proceedings.

General Lines of Business

Since its inception in November 1996, VFCT has positioned itself to develop and acquire advanced technologies. Between 1996 and approximately 2003, the Company won numerous contracts to produce various 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”).

VFCT is also actively engaged in the electronic components business. The Company has been engaged in this business in excess of six years. This activity consists of the sale to its customers of electronic components, primarily transistors, which are classified as uncontrolled. Uncontrolled parts are parts which are not subject to special licensing and regulation by the U.S. Department of Commerce Bureau of Export Administration prior to export from the United States. The Company generally obtains the components from third party manufacturers and ships the products to customers primarily located in Japan. All of VFCT’s revenues generated in 2006 are from the sale of such components to one of its Japanese customers. Although this is an established business segment, the Company’s primary focus remains with the development of counter-terrorism products.

At present, and for the last four years, the Company has focused on the acquisition of the rights to manufacture and distribute THOR in the United States and to certain other countries and to develop THOR. THOR is based on a high energy miniature particle accelerator. THOR creates photo nuclear reactions in carbon and nitrogen isotopes present in modern explosive devices as well as in oxygen present in narcotics. The reactions follow a predictable determined pattern or chemical signature that can be used to identify the substance. THOR can also be enhanced with a fast neutron detector in order to detect fissile material.

-24-

To the best of the Company’s knowledge, no existing device can effectively screen for explosives, drugs, micro organisms and nuclear materials, such as plutonium and weapons grade uranium. The Company’s partners for the development of next generation Explosives Detection Systems (“EDS”) are the Lawrence Livermore National Lab, which has recently been designated the “Center of Excellence” for EDS technologies, and the P. N. Lebedev Physical Institute (LPI), the premiere physics laboratory in the Russian Federation, which has developed THOR, a device that clearly exceeds current requirements for screening of explosives and is the only system of its kind.

Because of its small size and demonstrated effectiveness at detecting explosive, narcotic and bio weapon substances concealed in attempted concealment barriers, the THOR technology can be applied in many security contexts including the external scanning of an entire cargo container or truck container, and can be outfitted to scan airport bags, land mines, and for protection of high value targets. The data produced can be instantly transmitted to the U.S. Department of Homeland Security and other agencies for accurate threat detection, assessment, and knowledge dissemination.

Technology Protection

Valley Forge succeeded in obtaining the exclusive worldwide rights to THOR until 2014, but not the rights to manufacture or sell the unit in the former Soviet Union. Valley Forge has an option to indefinitely extend its rights to THOR.Valley Forge estimates that is has at least five year’s advantage over any competition who may attempt to build and bring to market a particle accelerator of similar size and function. This is because THOR has ten years of research and development behind its prototype. Each THOR unit is estimated to have an operational life of ten years. Thus, once THOR is introduced to the market and implemented in the field, Valley Forge believes that THOR owners are more likely than not for several years to not purchase a competitive product. In the meantime, Valley Forge will be taking steps to improve THOR and to customize it for new applications.

Research and Development

            On July 14, 2003, a Cooperative Research and Development Agreement (“CRADA”) was executed between the Company and the Regents of the University of California’s Lawrence Livermore National Laboratory (“LLNL”), a laboratory funded by the U.S. Department of Energy (“DOE”). The New Independent State of the former Soviet Union, by the P.N. Lebedev Physical Institute of the Russian Academy of Sciences, is also participating in the CRADA.  The $1.8 million grant from DOE is for continued research, design, and production of the first THOR unit. The grant funds are allocated to LLNL and are not part of the Company’s financial statements. The Company has contributed research and development expenses to facilitate the commercialization of THOR. These expenses are set forth in the Company’s financial statements in this prospectus.

The technology used to manufacture the THOR units is made possible through an exclusive rights agreement with the P.N. Lebedev Physical Institute of the Russian Academy of Sciences. Production equipment for initial accelerator detector complex (ADC) units, the heart of our detection systems, is in place and operational, and a prototype unit has been designed.

The THOR technology continues to be tested by the DOE, and Valley Forge will need final DOE approval and possibly Transportation Safety Administration approval before THOR can be commercially developed for use at airports in the United States of America. However, such approvals are not required for Valley Forge to build and sell THOR units to other U.S. customers or foreign buyers, but U.S. State Department approval will be required to sell a unit to a foreign buyer.

-25-

Raw Material Sources and Availability

THOR materials and parts are available on an as needed basis from a variety of sources in the United States of America. Accordingly, Valley Forge does not expect to encounter problems in acquiring the commercial quantities of components required to build THOR.

Homeland Security

The Company expects that design and manufacture of homeland security and anti-terrorism systems will grow to become the major component of Valley Forge’s business over the next five years as the United States Department of Homeland Security and the United States Military launches and ramps up its efforts to protect ports, rail, truck, and airline cargo, high value assets, and ships from terrorists. The THOR technology is designed to detect all typical chemical, nuclear, and bio weapon threats to the strategic interests.

The THOR Market

Each year more than 16 million cargo containers arrive in the United States by ship, truck, and rail with no effective EDS machines currently available to inspect them. Demand for accurate inspection units is increasing monthly. Ensuring the security of the maritime trade system is essential, given that approximately 90 percent of the world's cargo moves by container. The United States Government will increase technology spending 8.5% through FY08. That is $68.2 billion in five years, up from $45.5 billion. Most important, the Administration's funding priorities dovetail well with the critical mission areas established in the national homeland security strategy.

The likely market for THOR includes:

· Ports, cargo hubs, and rail yards

· World-wide express cargo facilities

· United States postal facilities

· United States border crossings

· United States military field applications

· World-wide markets; and

· Technology licensing opportunities.

Major Customer Dependency and Competition

Valley Forge believes that it will have a competitive advantage over every known product available on the market today. Valley Forge’s THOR is more powerful than any known competitor’s products, is portable, and is less expensive to operate. There is no way to estimate customer dependency at this time.

Traditional detection systems are based on X-rays of various energy levels, including Nuclear Magnetic Resonance (NMR) and Quadropole Magnetic Resonance (QMR). However, it has been determined that X-rays lack sufficient strength to penetrate all barriers and are often absorbed or deflected before they can properly penetrate a container. Utilizing high-energy gamma rays overcomes this problem and as a result Valley Forge’s device can penetrate any container. To generate these high-energy gamma rays, a particle accelerator is required.

-26-

Typical high energy particle accelerators are generally the size of a warehouse. Russian scientists, through decades of dedicated research, have developed a miniature particle accelerator the size of a small table top. The special performance of this machine cannot be stressed enough. It takes focused energy to penetrate 8 feet through a cargo container and to return a discernable signal. Only Valley Forge’s EDS system can generate the necessary power levels and generate the necessary return signals to accurately determine the amount and composition of explosives, drugs or other illicit material. Rather than using weak X-ray sources or low level gamma energies created by radioactive isotopes, Valley Forge utilizes its miniature particle acceleratorto create high energy gamma rays capable of penetrating any barrier and detecting explosives, unlike any other available device. As a comparison, typical EDS machines operate at 0.5 to 1.5 MeV. Valley Forge’s THOR generates 55 MeV.

Equally important, Valley Forge’s device, via photo-nuclear reactions, can also determine the exact chemical nature and quantity of any explosives within the sealed container. The system accurately penetrates concealment media and performs to 99.6% accuracy.

THOR can be fully automated including the scanning and analysis of the nature and volume of explosive materials, devices or their components, meaning that no human operator is required, and it can be operated from a remote location. This reduces the operation costs of THOR compared to any other product. Also, THOR’s energy consumption is approximately 30 kilowatts vs. 50 kilowatts consumed by other detection systems.

Distribution of THOR

Valley Forge intends to sell THOR through direct sales means in the United States, Canada, and Europe. Valley Forge anticipates that it will sell THOR units through unaffiliated dealers in the Middle East and Far East.

Effect of Existing or Probable Government Regulations

There is no effect on the Company's potential sales arising from government regulations, and Valley Forge does not anticipate any change to this in the future.

Costs and Effects of Compliance with Environmental Laws

Valley Forge has incurred no costs nor suffered any effects to maintain compliance with any environmental laws.

Environmental Impact

Food and other objects scanned with the THOR prototype have returned to below background radiation levels within approximately fifteen minutes. No long term effects were evidenced.

Dependence on One or a Few Major Customers

Valley Forge’s successful production and sales of THOR will initially depend to a great extent on the United States Government’s interest in THOR. Valley Forge will seek other buyers worldwide both to increase market share and to reduce its dependence on the United States Government and of any branch or agency of the United States Government.

-27-

MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the Financial Statements and accompanying notes and the other financial information appearing elsewhere in this prospectus. Our fiscal year end is December 31.

General

The Company’s plan of operation for the next twelve months is to continue, and to facilitate if possible, the process of obtaining final U.S. government approvals for the THOR technology and to begin assembly of the THOR beta model. The Company is not expected to have any material income until the THOR units are in production, but the Company is likely to incur marketing and research and development expenses and is certain to incur payroll expenses in the interim.

The Company obtained private investor financing following the approval by its shareholders of the share exchange competed in July 2006. The Company expects to use any proceeds raised from private capital raising efforts to meet general operational and payroll expenses, which may also include the payment of additional research and development and marketing expenses.

In the last three years, the Company’s cash flow needs have been met through capital investments from its founders. The Company’s day-to-day operations are not expected to change until such time as delivery of commercial THOR devices are completed. Private capital investments in the Company and cash exercises of warrants are expected to substitute for and expand the ongoing capital contributions previously contributed by the Company’s founders.

In the coming months, the Company will sharpen its estimates of its capital requirements based on the quantities of THOR units ordered. Initial market demand for THOR will determine the Company’s labor and physical plant requirements.

Overview

On July 6, 2006, Quetzal Capital 1, Inc., which was a shell corporation incorporated in Florida in 2005, completed a share exchange with the shareholders of Valley Forge Composite Technologies, Inc., a Pennsylvania corporation (“VFCT”). As a result of the share exchange, there was a change in control of the shell corporation, and its status as a shell corporation ceased. VFCT became a wholly owned subsidiary of Quetzal Capital 1, Inc., and the management of VFCT became the management and controlling shareholders of Quetzal Capital 1, Inc. Simultaneously, the new controlling shareholders changed the name of Quetzal Capital 1, Inc. to Valley Forge Composite Technologies, Inc., a Florida corporation. Today, the entire operating business of the Company consists of the operations of its subsidiary, VFCT. VFCT was formed as a Pennsylvania corporation in November 1996.

At present, and for the last four years, VFCT has focused on the acquisition of the rights to manufacture and distribute the THOR photonuclear detection system in the United States and to certain other countries and to develop THOR. To the best of VFCT’s knowledge, other than THOR, no existing device can effectively screen for explosives, drugs, micro organisms and nuclear materials, such as plutonium and weapons grade uranium. VFCT’s partners for next generation Explosives Detection Systems (“EDS”) are the Lawrence Livermore National Lab, which has recently been designated the “Center of Excellence” for EDS technologies, and the Lebedev, the premiere physics laboratory in the Russian Federation, which has developed THOR, a device that clearly exceeds current requirements for screening of explosives and is the only system of its kind.

-28-

Several related agreements were also made with parties associated or affiliated with the Company in connection with the approval of the share exchange. These agreements involve 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 own Quetzal Capital 1, Inc.’s corporate shareholder, Quetzal Capital Funding I, Inc. (“QCF1”), and a registration rights agreement for QCF1, CTCEG and others. The details of the share exchange and the related agreements are set forth in detail and are attached as exhibits to a Form 8-K, filed on July 11, 2006, as supplemental information.

Because the Company has not had revenues in both of the last two consecutive fiscal years, Regulation SB requires the Company to disclose only its plan of operation and off-balance sheet arrangements.

Plan of Operation

We had revenue of $417,592 in fiscal year 2006, but we had no revenues in fiscal year 2005. The revenue earned in fiscal year 2006 pertained to sales of electronic parts and not to our core focus of production and sale of the THOR technology. For the fiscal years ended December 31, 2006 and December 31, 2005, VFCT had a net loss of $1,179,758 and $567,144, respectively.

The Company’s plan of operation for the next twelve months is to continue, and to facilitate if possible, the process of obtaining final U.S. government approvals for the THOR technology and to begin assembly of the THOR beta model. The Company is not expected to have any material income until the THOR units are in production, but the Company is likely to incur marketing and research and development expenses and is certain to incur payroll expenses in the interim.

In the three years preceding July 2006, the month when we engaged in the Share Exchange Agreement, the Company’s cash flow needs had been met through capital investments from its founders. Between August 2006 and November 2006, we raised $1,296,500 from an offering of units, and we received a loan in the amount of $42,000 from Coast To Coast Equity Group, Inc. We have applied $15,735 to obtaining a new headquarters office in Covington, Kentucky, and expended an additional $178,921 on selling and administrative expenses during the fourth quarter of 2006. Our average monthly cost of operations from September 2006 through December 2006 was $ 128,695.

Initial market demand for THOR will determine the Company’s labor and physical plant requirements. We anticipate needing at least $ 3,000,000 to acquire a suitable manufacturing facility, obtain the necessary parts, and pay for the labor to build our first commercial production unit. At this rate, and barring any material changes to our capital requirements, we anticipate being able to sustain our operations for 12 months, at which time we will have to obtain additional capital funding. Thus, our ability to sustain ourselves on our current cash position depends almost entirely on how long the government approval process may take and how high the initial market demand is for the THOR system. While the receipt of purchase orders will dictate our initial production needs, the timing of the government approval process is largely out of our control.

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 until such time as we obtain the necessary government approvals to commence production and then the delivery of the first commercial THOR devices. We do not anticipate having 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.

In the coming months, the Company will sharpen its estimates of its capital requirements based on the quantities of THOR units ordered and based on reliable information enabling us to better predict when government approvals might be obtained.

Restatement of September 30, 2006 Financial Statements

On March 12, 2007, the Company, after review and discussion by its Board of Directors and its President and Principal Financial and Accounting Officer, concluded that the previously issued interim financial statements for the nine months ended September 30, 2006 included in the Company's Registration Statement on Form SB-2, as amended through January 26, 2007, and Report on Form 10-QSB for the period ended September 30, 2006 should not be relied upon. In particular the Company has determined, based upon discussions with the SEC, that it had improperly reported and overstated sales revenue and receivable amounts for the period ending September 30, 2006 totaling $921,919 each. The Company also overstated cost of sales by $435,585, and understated inventories by $435,585. The Company overstated selling and administrative expenses by $436,609 and overstated amounts due to shareholders by $436,609 relating to commission expense of the sale. The Company has also reclassified $98,000 from its Due To Shareholder account to its Accounts Payable and Accrued Expenses account relating to the deferral of the sale. Also, the Company has revised certain footnotes as they relate to the foregoing and other matters as a result of its discussions with the SEC. All of the preceding changes directly relate to the Company’s change in revenue recognition after discussions with the SEC.

This restatement reflects the decision of Management that a parts order sold to a Japanese buyer should not have been recorded as revenue in 2006 and should be recorded as inventory because payment has been delayed and collectability is the subject of debate. Revenue will be recognized when payment is received.

The effect of the Company’s restated September 30, 2006 interim financial statements is an increase in net loss of $49,725 for the nine months ended September 30, 2006 to $771,639. Net loss per share (basic and diluted) for the nine months ended September 30, 2006 remains at $0.02.

Another effect was a decrease in the net loss of $6,452 for the three months ended September 30, 2006 to $343,763. Net loss per share (basic and diluted) for the three months ended September 30, 2006 remains at $0.01. Total assets decreased by $486,334, current liabilities decreased by $436,609 and shareholders’ equity decreased by $49,725 as a result of the restatement.

The Company does not have an audit committee. The Company discussed the matters set forth herein with the Company's independent registered public accounting firm, Sherb & Co., LLP. The restated financial information is contained in the Company’s financial statements for December 31, 2006, which are contained in this registration statement and prospectus and in the Company’s Form 10-KSB filed on April 2, 2007.

-29-

Critical Accounting Policies and Estimates

The accompanying audited consolidated financial statements have been prepared by Valley Forge Composite Technologies, Inc., a Florida corporation (the “Company”). The Company’s audited financial statements are consolidated with the results of its subsidiary, Valley Forge Composite Technologies, Inc., a Pennsylvania corporation (“VFCT”). 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. Our Management has discussed these estimates and assumptions with our finance and audit committee. 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.

This section of our Form 10-KSB 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.

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.

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, security deposits, due to shareholders, accounts payables, accrued expenses and a convertible debenture. The carrying values of these financial instruments approximate the fair value due to their short term maturities.

-30-

Revenue Recognition

The Company only recognizes revenue when persuasive evidence of a customer or distributor arrangement exists, receipt of goods by the customer occurs, the price is fixed or determinable, collection is reasonably assured and upon the customer acceptance of the goods.

Persuasive evidence of a customer or distributor arrangement exists upon the Company’s receipt of a signed purchase order from the customer, the Company’s shipment of the goods as specified in the purchase order and the customer’s receipt of the goods ordered.

A sales agreement is initiated when the customer submits a signed purchase order which states the product(s) ordered, price, quantity and the terms and conditions of sale. Acceptance occurs upon the earlier of; (1) the Company’s receipt of a written acceptance of the goods from the customer; or (2) expiration of the time period stated in each purchase order for final payment which may vary with each order. The customer has a right of return from the date that the shipment occurs until the final payment date stated in the purchase order. Revenue is only recognized upon completion of product testing by the customer, but not later than 180 days after product shipment occurs.

Recent Accounting Pronouncements

The Company does not believe that recent accounting pronouncements will have a material affect on the content or presentation of its financial statements.

                In May 2006, the SEC announced that the compliance date for non-accelerated filers pursuant to Section 404 of the Sarbanes-Oxley Act had been extended. Under the latest extension, a company that is not required to file its annual and quarterly reports on an accelerated basis must begin to comply with the internal control over financial reporting requirements for its first fiscal year ending on or after July 15, 2008, which, for the Company, is effective for fiscal 2008 beginning January 1, 2008. This is a one-year extension from the previously established July 15, 2007 compliance date established in September 2005. The SEC similarly extended the compliance date for these companies relating to requirements regarding evaluation of internal control over financial reporting and management certification requirements. The Company is currently evaluating the impact of Section 404 of the Sarbanes-Oxley Act on its results of operations, cash flows or financial condition.

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 has not had any off-balance sheet arrangements.

-31-

Employees

The Company has four direct employees, of which two are executive management and two are administrative employees.

Description of Property

The Company does not own or lease a manufacturing facility for production of THOR. The Company intends to build at least one assembly facility in the United States. The Company is in the process of evaluating locations and obtaining estimates for the preparation of a suitable site.

The Company’s projection for the timing of production is dependent on receiving necessary government approvals to commence production, the Company’s ability to build or obtain at least one suitable production facility, and the ability to obtain additional capital if necessary to meet then current production goals. In the coming months, the Company will sharpen its estimates of its capital requirements based on the quantities of THOR units ordered and will then be able to better project the timing of production. Initial market demand for THOR will determine the Company’s labor and physical plant requirements.

The Company’s headquarters office operates from leased space. 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. The annual base rent increases every 12 months starting at approximately $40,484 and ending at approximately $53,730. Under the terms of the lease, additional rent for operating expenses of the building shall also be payable by the Company at a pro rata share deemed to be 0.928%, which will total approximately $19,402 for the first 12 months. These expenses are anticipated to increase at a rate of 3% per year. Minimum annual lease payments are: $43,387 for 2007; $49,680 for 2008; $51,163 for 2009; $52,695 for 2010; and $35,820 for 2011. Therefore, the Company’s minimum cumulative lease obligation is $232,745 for the full five year lease period.

Reports to Security Holders

We are not required to deliver an annual report to security holders and do not plan to send a copy of the annual report to them. If we choose to create an annual report, it will contain audited financial statements. We intend to file all required information with the SEC. We plan to file with the SEC our Forms 10KSB, 10QSB and all other forms that are or may become applicable to us.

The public may read and copy any materials filed with the SEC at the SEC=s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. We have filed all statements and forms with the SEC electronically, and they are available for viewing or copy on the SEC=s Internet site, that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The Internet address for this site is http://www.sec.gov.

-32-

EXECUTIVE COMPENSATION

The Company paid compensation to each of the directors and executive officers in the following amounts during fiscal year 2006.  The Company has no plans to change the compensation structure for executive officers and directors during fiscal year 2007, but we may change this position as our need to attract and hire qualified personnel during fiscal year 2007.

Name	Salary	Position
Louis J. Brothers	$ 0	Chairman of the Board, Director
	57,000	President
	194,843	Sales Commission
Larry K. Wilhide	30,000	Vice-President
	0	Director

Messrs. Brothers and Wilhide each have the use of a Company car and each are protected by the Company’s indemnification policy for directors and officers (set forth below). No other fringe benefits for either of them have been awarded in fiscal year 2006 or are contemplated at this time. No other form of compensation or incentive compensation was paid or awarded to either of them in fiscal year 2006.

SUMMARY COMPENSATION TABLE

			Annual Compensation										Long-Term Compensation
													Awards		Payouts
Name and Principal Position	Year		Salary			Bonus		Other Annual Compensation			Restricted Stock Award(s)		Securities Underlying Options/SARs		LTIP Payouts		All Other Compensation
Louis J. Brothers		2006		$	57,000		-		$	194,843		-		-		-		-
Chief Executive		2005		$	-		-			-		-		-		-		-
Officer, President and Director		2004			135,000		-			-		-		-		-		-
Larry K. Wilhide		2006		$	30,000		-			-		-		-		-		-
Vice-President and		2005		$	-		-			-		-		-		-		-
Director		2004			-		-			-				-		-		-

In the future, Mr. Brothers and all other employees will receive commissions from their individual efforts resulting in customer purchase orders for THOR units.

-33-

Indemnification of Directors and Officers

Our bylaws contain the broadest form of indemnification for our sole officer and director permitted under Florida law. Our bylaws generally provide as follows:

The Company shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by, or in the right of the Company) by reason of the fact that he or she is or was a director, officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, officer, employee or agent of any other corporation, partnership, joint venture, trust or other enterprise against expenses (including attorney's fees), judgments, fines, amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding, including any appeal thereof, if he or she acted in good faith in a manner he reasonably believed to be in, or not opposed to the best interests of the Company, and with respect to any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of no contenders or its equivalent shall not create, of itself, a presumption that the person did not act in good faith or in a manner which he or she reasonably believed to be in, or not opposed to, the best interests of the Company or, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful.

To the extent that a director, officer, employee or agent of the Company has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to above, or in any defense of any claim, issue or matter therein, he or she shall be indemnified against expenses, including attorneys fees, actually and reasonably incurred by him in connection therewith.

Any indemnification shall be made only if a determination is made that indemnification of the director, officer, employee or agent is proper in the circumstances because such person has met the applicable standard of conduct set forth above. Such determination shall be made either (1) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (2) by the shareholders who were not parties to such action, suit or proceeding. If neither of the above determinations can occur because the Board of Directors consists of a sole director or the Company is owned by a sole shareholder, which is controlled by the sole officer and director, then the sole officer and director or sole shareholder shall be allowed to make such determination.

Expenses incurred in defending any action, suit or proceeding may be paid in advance of the final disposition of such action, suit or proceeding as authorized in the manner provided above upon receipt of any undertaking by or on behalf of the director, officer, employee or agent to repay such amount, unless it shall ultimately be determined that she is entitled to be indemnified by the Company.

The indemnification provided shall be in addition to the indemnification rights provided pursuant to Chapter 607 of the Florida Statutes, and shall not be deemed exclusive of any other rights to which any person seeking indemnification may be entitled under any bylaw, agreement, vote of shareholders or disinterested directors or otherwise, both as to action in such person's official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent of the Company and shall inure to the benefit of the heirs, executors and administrators of such a person.

-34-

VALLEY FORGE COMPOSITE TECHNOLOGIES, INC.

FINANCIAL STATEMENTS

DECEMBER 31, 2006 AND 2005

VALLEY FORGE COMPOSITE TECHNOLOGIES, INC.

INDEX TO FINANCIAL STATEMENTS

	PAGE
Report of Independent Registered Public Accounting Firm, Sherb & Co., LLP	F-2
Report of Independent Registered Public Accounting Firm, Morison Cogen LLP	F-3
Balance Sheet as of December 31, 2006	F-4
Statements of Operations for the year ended December 31, 2006 and 2005	F-5
Statements of Stockholders' Deficit for the year ended December 31, 2006 and 2005	F-6
Statements of Cash Flows for the year ended December 31, 2006 and 2005	F-7
Notes to Financial Statements (December 31, 2006 and 2005)	F-8

F-1-

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders

Valley Forge Composite Technologies, Inc.

We have audited the accompanying consolidated balance sheet of Valley Forge Composite Technologies, Inc. as of December 31, 2006 and the related consolidated statements of operations, changes in shareholders’ equity (deficiency) and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Valley Forge Composite Technologies, Inc. as of December 31, 2006 and the results of their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations that raises substantial doubt about its ability to continue as a going concern. Management’s plan in regard to these matters is also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ SHERB & CO., LLP 

Certified Public Accountants

Boca Raton, Florida

March 30 , 2007

F-2-

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders

Valley Forge Composite Technologies, Inc.

Covington, Kentucky

We have audited the statements of operations, stockholders’ equity (deficit) and cash flows of Valley Forge Composite Technologies, Inc. for the year ended December 31, 2005. 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 audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the results of its operations and its cash flows of Valley Forge Composite Technologies, Inc. for the year ended December 31, 2005 in conformity with accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, attainment of sustainable profitability and positive cash flow from operations is dependent on certain future events, all of which raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to this matter are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ MORISON COGEN LLP

Bala Cynwyd, Pennsylvania

May 3, 2006

F-3-

VALLEY FORGE COMPOSITE TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2006
ASSETS
Current assets:
Cash	$	683,997
Inventory		467,738
Prepaid expenses		8,962
Total current assets		1,160,697
Property and equipment, net		63,404
Other assets:
Security deposit		5,535
Total Assets	$	1,229,636
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	254,023
Convertible debenture		42,000
Due to shareholder		97,386
Total current liabilities		393,409
Shareholders' Equity:
Common stock, $.001 par value, 100,000,000
shares authorized; 46,296,500
issued and outstanding		46,296
Additional paid-in capital		3,197,654
Accumulated deficit		(2,407,723	)
Total shareholders' equity		836,227
Total Liabilities and Shareholders' Equity	$	1,229,636

The accompanying notes should be read in conjunction with the consolidated financial statements

F-4-

VALLEY FORGE COMPOSITE TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	For the year ended December 31,
	2006			2005
Sales	$	417,592		$	-
Costs and expenses
Cost of sales		152,615			-
Research and Development		600,000			500,000
Selling and administrative expenses		694,503			67,276
Stock based consulting		142,450			-
		1,589,568			567,276
Loss from operations		(1,171,976	)		(567,276	)
Other income
Interest Expense		(13,418	)		-
Investment income		5,636			132
		(7,782	)		132
Net loss	$	(1,179,758	)	$	(567,144	)
Loss per common share
Basic	$	(0.03	)	$	(0.01	)
Diluted	$	(0.03	)	$	(0.01	)
Weighted Average Common Shares Outstanding
Basic		45,212,098			45,000,000
Diluted		45,212,098			45,000,000

The accompanying notes should be read in conjunction with the consolidated financial statements

F-5-

VALLEY FORGE COMPOSITE TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIENCY)
YEARS ENDED DECEMBER 31, 2006 AND 2005
	Common		Number		Paid-in			Accumulated
	Stock		of Shares		Capital			Deficit			Total
BALANCE AT JANUARY 1, 2005	$	40,000		40,000,000	$	655,500		$	(660,820	)	$	44,180
Contributed capital related to research and
development agreement		-		-		500,000			-			500,000
Net loss for the year ended December 31, 2005		-		-		-			(567,145	)		(567,145	)
BALANCE AT DECEMBER 31, 2005		40,000		40,000,000		1,165,000			(1,227,965	)		(22,965	)
Effects of Recapitalization due to merger		5,000		5,000,000		(5,000	)		-			-
Stock based consulting		-		-		142,450			-			142,450
Proceeds from private offering of common stock		1,296		1,296,500		1,295,204			-			1,296,500
Contributed capital related to research and
development agreement		-		-		600,000			-			600,000
Net loss for the year ended December 31, 2006		-		-		-			(1,179,758	)		(1,179,758	)
BALANCE AT DECEMBER 31, 2006	$	46,296		46,296,500	$	3,197,654		$	(2,407,723	)	$	836,227

The accompanying notes should be read in conjunction with the consolidated financial statements

F-6-

VALLEY FORGE COMPOSITE TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the year ended December 31,
	2006			2005
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(1,179,758	)	$	(567,144	)
Adjustments to reconcile net loss
to net cash provided by (used in)
operating activities:
Depreciation expense		7,627			4,232
Contributed capital for services		600,000			500,000
Common stock issued for services		-			4,500
Fair value of warrants issued for consulting services		142,450			-
Change in operating assets and liabilities
(Increase) Decrease in:
Inventory		(467,738	)		-
Prepaid expenses		(8,962	)		-
Security deposit		(5,535	)		-
Increase (Decrease) in:
Accounts payable and accrued expenses		247,794			3,909
NET CASH USED IN
OPERATING ACTIVITIES		(664,122	)		(54,503	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of Equipment		(62,295	)		(403	)
NET CASH USED IN
INVESTING ACTIVITIES		(62,295	)		(403	)
CASH FLOWS FROM FINANCING ACTIVITIES
Gross proceeds from sale of common stock		1,296,500			-
Proceeds from convertible debenture payable		42,000			-
Due from shareholder		1,678			-
Repayments to shareholder		(439,833	)		-
Loan from shareholder		495,219			-
NET CASH PROVIDED BY
FINANCING ACTIVITIES		1,395,564			-
NET INCREASE (DECREASE) IN CASH		669,147			(54,906	)
CASH AT BEGINNING OF YEAR		14,850			69,756
CASH AT END OF YEAR	$	683,997		$	14,850
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the year for:
Income taxes	$	-		$	-
Interest	$	12,688		$	-

The accompanying notes should be read in conjunction with the consolidated financial statements

F-7-

VALLEY FORGE COMPOSITE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006

NOTE 1 -NATURE OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying consolidated financial statements have been prepared by Valley Forge Composite Technologies, Inc., a Florida corporation (the “Company”). The Company’s financial statements are consolidated with the results of its subsidiary, Valley Forge Composite Technologies, Inc., a Pennsylvania corporation (“VFCT”).

Nature of the Business

VFCT was incorporated in Pennsylvania on November 21, 1996. The Company has been continuously engaged in the development and sales of scientific technologies. VFCT is actively engaged in an established electronic components business. The Company has been engaged in this business in excess of six years. This activity consists of the sale of electronic components, primarily transistors, which are classified as uncontrolled parts. Uncontrolled parts are parts which are not subject to special licensing and regulation by the U.S. Department of Commerce Bureau of Export Administration prior to export from the United States.

Between 1996 and approximately 2003, the Company won numerous contracts to produce various 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”).

On July 6, 2006, Quetzal Capital 1, Inc., a Florida corporation ("QCI") entered into a share exchange agreement with Valley Forge Composite Technologies, Inc., a Pennsylvania corporation ("VFCT"). Under the share exchange agreement, QCI issued 40,000,000 shares of its common stock to VFCT shareholders for the acquisition of all of the outstanding capital stock of VFCT. For financial accounting purposes, the exchange of stock was treated as a recapitalization of VFCT with the former shareholders of QCI retaining 5,000,000 shares (or approximately 11%) of the public company. Prior to the merger, QCI was a reporting shell corporation with no operations. The share exchange was approved by QCI and its sole shareholder, Quetzal Capital Funding I, Inc. ("QCF1"), and by VFCT's board of directors and a majority of its shareholders.

Several related agreements were also made with parties associated or affiliated with QCI 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 QCI’s sole corporate shareholder, QCF1, and a registration rights agreement for QCF1, CTCEG and private placement unit holders.

Basis of Presentation

The consolidated financial statements are prepared in accordance with generally accepted accounting principals in the United States of America (“US GAAP”). The consolidated financial statements of the Company include the Company and its subsidiary, VFCT. All material inter-company balances and transactions have been eliminated.

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).

F-8-

VALLEY FORGE COMPOSITE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006

NOTE 1 -NATURE OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Summary of Significant Accounting Policies

Except as may otherwise be provided herein, these consolidated financial statements have been prepared consistently with the accounting policies described in Note 1 to VFCT's financial statements for the year ended December 31, 2006.

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 Statement of Financial Accounting Standards (“SFAS”) No. 130, “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. Since the Company has no items of other comprehensive income, comprehensive income (loss) is equal to net income (loss).

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash, security deposits, due to shareholders, accounts payables, accrued expenses and a convertible debenture. The carrying values of these financial instruments approximate the fair value due to their short term maturities.

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 December 31, 2006, the Company’s cash deposits exceeded the FDIC insured limits by $584,820.

Cash Equivalents

The Company considers all short-term securities purchased with a maturity of three months or less to be cash equivalents. At December 31, 2006, the Company held no cash equivalent securities.

Inventories

The Company’s inventory is valued at the lower of cost or market, on a first-in first-out (FIFO) basis. Inventories consist of the following at December 31, 2006:

Work in process	$	32,153
Finished goods		435,585
	$	467,738

At December 31, 2006, $435,585 of the Company’s finished goods inventory was being held by an outside third party. This third party is a Japanese customer with whom the Company has an established sales relationship. The Company believes that the finished goods inventory should remain on the Company’s books until such time that the customer remits payment for these goods and the sale is completed. In the event that the customer fails to remit payment for or return any of this inventory by June 30, 2007, the Company intends to remove said inventory from its books and adjust its financial statements accordingly.

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

F-9-

VALLEY FORGE COMPOSITE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006

NOTE 1 -NATURE OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Property and Equipment (continued)

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.

Revenue Recognition

The Company only recognizes revenue when persuasive evidence of a customer or distributor arrangement exists, receipt of goods by the customer occurs, the price is fixed or determinable, collection is reasonably assured and upon the customer acceptance of the goods.

Persuasive evidence of a customer or distributor arrangement exists upon the Company’s receipt of a signed purchase order from the customer, the Company’s shipment of the goods as specified in the purchase order and the customer’s receipt of the goods ordered.

A sales agreement is initiated when the customer submits a signed purchase order which states the product(s) ordered, price, quantity and the terms and conditions of sale. Acceptance occurs upon the earlier of; (1) the Company’s receipt of a written acceptance of the goods from the customer; or (2) expiration of the time period stated in each purchase order for final payment which may vary with each order. The customer has a right of return from the date that the shipment occurs until the final payment date stated in the purchase order. Revenue is only recognized upon completion of product testing by the customer, but not later than 180 days after product shipment occurs.

Income Taxes

Historically, the Pennsylvania Company has elected by unanimous consent of its stockholders to be taxed under the provisions of Subchapter S of the Internal Revenue Code and the Commonwealth of Pennsylvania. Under those provisions, VFCT did not pay federal and state corporate income taxes on its taxable income. Instead, the stockholders were liable for individual federal and state income taxes on their respective shares of VFCT’s taxable income.

Effective July 6, 2006 (date of the exchange agreement explained previously in Note 1), VFCT is no longer a Subchapter S corporation and is now subject to corporate level taxes on its earnings.

Under the asset and liability method of FASB Statement 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities, and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance, when in the Company's opinion it is likely that some portion or the entire deferred tax asset will not be realized.

Loss per common share

In accordance with SFAS No 128 “Earnings Per 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 from the loss per share calculations as their effect would have been anti-dilutive.

F-10-

VALLEY FORGE COMPOSITE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006

NOTE 1 -NATURE OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Loss per common share (continued)

The following sets forth the computation of earnings per share.

		For the Year Ended December 31,
		2006			2005
Net loss	$	( 1,179,758	)	$	( 567,144	)
Weighted average shares outstanding		45,212,098			45,000,000
Loss per share - basic & dilutive	$	(.03	)	$	(.01	)

Diluted loss per common share has not been presented separately for the year ended December 31, 2006 since the impact of the convertible warrants and convertible debenture would be antidilutive.

Share Based Payments

In December 2004, the FASB issued SFAS No. 123(R), "Share-Based Payment," which replaces SFAS No. 123 and supersedes APB Opinion No. 25. Under SFAS No. 123(R), companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees or independent contractors are required to provide services. Share-based compensation arrangements include stock options and warrants, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. In March 2005, the SEC issued Staff Accounting Bulletin No. 107, or “SAB 107”. SAB 107 expresses views of the staff regarding the interaction between SFAS No. 123(R) and certain SEC rules and regulations and provides the staff's views regarding the valuation of share-based payment arrangements for public companies. SFAS No. 123(R) permits public companies to adopt its requirements using one of two methods. On April 14, 2005, the SEC adopted a new rule amending the compliance dates for SFAS 123(R). Companies may elect to apply this statement either prospectively, or on a modified version of retrospective application under which financial statements for prior periods are adjusted on a basis consistent with the pro forma disclosures required for those periods under SFAS 123.

Effective January 1, 2006, the Company has fully adopted the provisions of SFAS No. 123(R) and related interpretations as provided by SAB 107. As such, compensation cost is measured on the date of grant as the fair value of the share-based payments. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant. The Company applies this statement prospectively. Prior to January 1, 2006, neither VFCT nor QC1 had any stock-based compensation plans.

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. A total of $569,800 was allocated to these warrants using the Black-Scholes pricing model with the following assumptions: share price of $1.00; Strike prices ranging from $1.00 to $2.00 per share; Time to expiration (days) of 638; Expected volatility of 52.86%; no dividends; and an annual interest rate based on 3-month U.S. Treasury Bill of 4.81%. Six months consulting expense in the amount of $142,450 was attributed to the grant of these warrants during the year ended December 31, 2006. A reconciliation of these related warrants issued and outstanding at December 31, 2006 is as follows:

F-11-

VALLEY FORGE COMPOSITE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006

NOTE 1 -NATURE OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Share Based Payments (continued)

Warrants outstanding at December 31, 2005	-
Granted	3,000,000
Exercised/forfeited	-
Warrants outstanding at December 31, 2006	3,000,000

Warranties

Some of the Company’s product lines will be covered by an annual renewable warranty effective only with the purchase of the Company’s annual maintenance contract agreement. The Company expects the annual maintenance contract agreement fees will total 15% to 20% of the original purchase price of the products.

Revenue from periodic maintenance agreements shall be recognized ratably over the respective maintenance periods provided no significant obligations remain, and collectibility of the related receivable is probable.

Recent accounting pronouncements

In May 2005, the Financial Accounting Standard Board ("FASB") issued Statement No. 154, "Accounting Changes and Error Corrections, a replacement of APB Opinion No. 20, Accounting Changes, and Statement No. 3, Reporting Accounting Changes in Interim Financial Statements" (SFAS 154). SFAS 154 changes the requirements for the accounting for, and reporting of, a change in accounting principle. Previously, most voluntary changes in accounting principles were required to be recognized by way of a cumulative effect adjustment within net income during the period of the change. SFAS 154 requires retrospective application to prior periods' financial statements, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. SFAS 154 is effective for accounting changes made in fiscal years beginning after December 15, 2005; however, the Statement does not change the transition provisions of any existing accounting pronouncements. The Company does not believe adoption of SFAS 154 will have a material effect on its financial position, results of operations or cash flows.

In July 2005, the FASB issued FASB Staff Position ("FSP") 150-5, "Accounting Under SFAS 150 for Freestanding Warrants and Other Similar Instruments on Redeemable Shares". FSP 150-5 clarifies that warrants on shares that are redeemable or puttable immediately upon exercise and warrants on shares that are redeemable or puttable in the future qualify as liabilities under SFAS 150, regardless of the redemption feature or redemption price. The FSP is effective for the first reporting period beginning after September 30, 2005, with resulting changes to prior period statements reported as the cumulative effect of an accounting change in accordance with the transition provisions of SFAS 150. The Company adopted the provisions of FSP 150-5 on July 1, 2005, which did not have a material effect on its financial statements.

In September 2006, the FASB issued FASB Statement No. 157. This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. This Statement applies under other accounting pronouncements that require or permit fair value measurements, the Board having previously concluded in those accounting pronouncements that fair value is a relevant measurement attribute. Accordingly, this Statement does not require any new fair value measurements. However, for some entities, the application of this Statement will change current practices. This Statement is effective for financial statements for fiscal years beginning after November 15, 2007. Earlier application is permitted provided that the reporting entity has not yet issued financial statements for that fiscal year. Management believes this Statement will have no impact on the financial statements of the Company once adopted.

F-12-

VALLEY FORGE COMPOSITE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006

NOTE 1- NATURE OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Recent accounting pronouncements (continued)

In February 2006, the Financial Accounting Standards Board issued Statement No. 155 (‘‘SFAS No 155’’), ‘‘Accounting for Certain Hybrid Instruments: An Amendment of FASB Statements No. 133 and 140’’. Management does not believe that this statement will have a significant impact as the Company does not use such instruments.

In May 2006, the SEC announced that the compliance date for non-accelerated filers pursuant to Section 404 of the Sarbanes-Oxley Act had been extended. Under the latest extension, a company that is not required to file its annual and quarterly reports on an accelerated basis must begin to comply with the internal control over financial reporting requirements for its first fiscal year ending on or after July 15, 2008, which, for the Company, is effective for fiscal 2008 beginning January 1, 2008. This is a one-year extension from the previously established July 15, 2007 compliance date established in September 2005. The SEC similarly extended the compliance date for these companies relating to requirements regarding evaluation of internal control over financial reporting and management certification requirements. The Company is currently evaluating the impact of Section 404 of the Sarbanes-Oxley Act on its results of operations, cash flows or financial condition.

In July 2006, the Financial Accounting Standards Board (‘‘FASB’’) issued FASB Interpretation No. 48, ‘‘Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109’’ (‘‘FIN 48’’), which provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax positions. A tax benefit from an uncertain position may be recognized only if it is ‘‘more likely than not’’ that the position is sustainable based on its technical merits. The provisions of FIN 48 are effective for fiscal years beginning after December 15, 2006. The Company does not expect FIN 48 will have a material effect on its consolidated financial condition or results of operations.

In September 2006, the SEC issued Staff Accounting Bulletin ("SAB") 108 which provides interpretive guidance on how the effects of the carryover or reversal of prior year misstatements should be considered in quantifying a current year misstatement. SAB 108 is effective for the first interim period following the first fiscal year ending after November 15, 2006, which, for the Company, is effective for fiscal 2007 beginning January 1, 2007. The Company does not believe that the adoption of SAB 108 will have a material impact on the Company’s results of operations, cash flows or financial condition.

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.

NOTE 2 - GOING CONCERN

As reflected in the accompanying consolidated financial statements, the Company has an accumulated deficit of $2,407,723 at December 31, 2006, net losses in the year ended December 31, 2006 of $1,179,758 and cash used in operations during the year ended December 31, 2006 of $664,122. 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 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.

F-13-

VALLEY FORGE COMPOSITE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006

NOTE 2 - GOING CONCERN (continued)

Since its inception in 1996, the Company was involved in the development and sales of advanced scientific technologies. Sales through the years were sporadic but had high margins. 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.

In 2003, the Company entered into a Cooperative Research and Development Agreement for the development and commercialization of an Advanced-Detector Complex, which is more fully described in Note 4. While the Company is attempting to increase sales, the growth has not been significant enough to support the Company’s daily operations. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

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 system 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

Effective July 6, 2006 (date of the exchange agreement explained in Note 1), VFCT is no longer a Subchapter S corporation and is subject to corporate level taxes on its earnings beginning July 6, 2006. Due to tax losses incurred, the Company did not record a current tax provision for the year ended December 31, 2006.

Deferred income taxes reflect the net income tax effect of temporary differences between the carrying amounts of the assets and liabilities for financial reporting purposes and amounts used for income taxes. The Company's deferred income tax assets and liabilities consist of the following:

Net operating loss carryforwards	$	126,867
Less: Valuation allowance		(126,867	)
Net deferred income tax assets	$	-0-

The table below summarizes the differences between the Company’s effective tax rate and the statutory federal rate as follows for fiscal 2006:

Computed “expected” tax benefit	(35)	%
State taxes net of “expected” tax benefit	( 6)	%
Change in valuation allowance	41	%
Effective tax rate	0	%

Net operating loss carryforwards totaled approximately $309,432 at December 31, 2006. The net operating loss carryforwards will begin to expire in the year 2026 if not utilized. After consideration of all the evidence, both positive and negative, management has recorded a full valuation allowance at December 31, 2006 due to the uncertainty of realizing the deferred tax assets. Utilization of the Company's net operating loss carryforwards are limited based on changes in ownership as defined in Internal Revenue Code Section 382.

F-14-

VALLEY FORGE COMPOSITE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006

NOTE 4 - COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENT

On July 14, 2003, a Cooperative Research and Development Agreement (“CRADA”) was executed between the Company and the Regents of the University of California’s Lawrence Livermore National Laboratory (“LLNL”), a laboratory funded by the U.S. Department of Energy (“DOE”). The New Independent State of the former Soviet Union, by the P.N. Lebedev Physical Institute of the Russian Academy of Sciences, is also participating in the CRADA.

The Company is responsible for the coordination of activities in Russia and the U.S., the demonstration of detection technologies with LLNL, and the development of market survey data and business commercialization plans for introducing the successful Accelerator-Detector Complex (also referred to in this prospectus as “THOR”) into the international transportation security market. The Company’s portion of total cost estimate for this 48 month CRADA project is $1,800,000, of which $500,000, $400,000 and $300,000 were incurred during the years ended December 31, 2005, 2004 and 2003. $600,000 of the Company’s total costs were incurred during the year ended December 31, 2006. The Company accounted for the CRADA project in accordance with Staff Accounting Bulletin Topic 5-T by recording a research and development cost through contributions by the stockholders.

NOTE 5 - RELATED PARTY TRANSACTIONS

During the year ended December 31, 2006, Louis J. Brothers the Company’s president and major shareholder of the Company advanced the Company $55,386. This amount is included in the due to shareholders balance on the balance sheet at December 31, 2006. The balance includes 6% annual interest compounded quarterly, and is due on demand.

On August 11, 2006, Coast to Coast Equity Group, Inc., a Company warrant holder, loaned the Company $42,000 as described in Note 8.

NOTE 6 - BUSINESS CONCENTRATIONS

The Company’s only sales in 2006 were sales of electronic components to one customer located in Japan.

F-15-

VALLEY FORGE COMPOSITE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006

NOTE 7 - 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 shall be for five years beginning on the first day of September, 2006 and ending on the last day of August, 2011.

The annual base rent increases every 12 months starting at approximately $40,484 and ending at approximately $53,730. Under the terms of the lease, additional rent for operating expenses of the building shall also be payable by the Company at a pro rata share deemed to be 0.928%, which will total approximately $19,402 for the first 12 months. These expenses are anticipated to increase at a rate of 3% per year. Rent expense for the years ended December 31, 2006 and 2005 was $10,199 and $0 respectively.

The following is a schedule of future minimum lease payments required under the lease:

Year Ending
December 31	Amount
2007	$	43,387
2008		49,680
2009		51,163
2010		52,695
2011		35,820
	$	232,745

NOTE 8 - CONVERTIBLE DEBENTURE

On August 11, 2006, the Company issued a convertible debenture to 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 VFCT and CTCEG, which occurred on July 6, 2006, or upon the date of an “event of default” which would include any proceedings by VFCT to seek protection due to insolvency. The interest rate is of 4% per annum and runs from August 11, 2006. The amounts due may be paid in cash or, upon mutual agreement of the parties, cash equivalents including but not limited to payment in the form of the Company’s common stock valued at $1.00 per share; or upon mutual agreement of the parties, CTCEG may apply amounts due toward the cash exercise of the 3,000,000 Class A warrants granted to CTCEG as stated in detail within the Consulting agreement as Share Based Payments which is described in Note 1.

F-16-

VALLEY FORGE COMPOSITE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006

NOTE 9 - SHAREHOLDERS’ EQUITY

On July 6, 2006, the Company issued 3,000,000 Class A warrants in exchange for consulting services rendered. The Company valued these warrants at the fair market value on the dates of the grant as referred to in Note 1. The Company recorded stock based consulting expense of $142,450 for the year ending December 31, 2006.

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 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 as required.

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 (1) year from the effective date of the Registration Statement for common stock issued and six (6) months from the effective date of the Registration Statement for warrants issued. The Company does not anticipate that it will offer any additional securities which would cause this provision to become effective prior to the applicable time limitations of the provisions. Accordingly, the Company believes that the price protection provision will have no accounting impact.

Coast To Coast Equity Group, Inc., Charles J. Scimeca, George Frudakis, and Tony N. Frudakis are 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, will continue in effect for a period two years from the effective date of this registration statement and are assignable in private transactions, provided that the shares are not sold in market transactions. The Company does not anticipate that it will offer any additional securities which would cause this provision to become effective prior to the applicable time limitations of the provisions. Accordingly, the Company believes that the non-dilution provision will have no accounting impact.

Common Stock Warrants

Stock warrant activity for the year ended December 31, 2006 is summarized as follows:

	Number of		Weighted average
	shares		exercise price
Outstanding at December 31, 2005	0	$	-
Granted	4,296,500		1.50
Exercised	-		-
Outstanding at December 31, 2006	4,296,500	$	1.50

F-17-

VALLEY FORGE COMPOSITE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006

NOTE 9 - SHAREHOLDERS’ EQUITY (continued)

The following table summarizes the Company's stock warrants outstanding at December 31, 2006:

		Weighted Average	Weighted Average
Range of		Remaining	Exercise
Excercise Price	Number	Life	Price
$ 1.00	1,000,000	1.50	$ 1.00
$ 1.50	1,000,000	1.50	$ 1.50
$ 2.00	1,000,000	1.50	$ 2.00
$ 1.50	1,296,500	.50	$ 1.50

NOTE 10 - REGISTRATION RIGHTS AGREEMENT

Pursuant to the terms of a registration rights agreement entered into on July 6, 2006, the Company has agreed to file a registration statement covering the shares of common stock underlying the securities issued to CTCEG and to private securities purchasers (the unit purchasers), and to register for resale the 5,000,000 shares owned by QCF1, no later than 30 days after the Company obtains a shareholder base of 35 shareholders, and will use its best efforts to have the registration statement declared effective with the SEC within 180 days of the filing date. If the Company does not meet the scheduled filing date, it has agreed to pay liquidated damages as required in the registration rights agreement (incorporated by reference from exhibit 10.1 to the Company’s Form 8-K filed with the Commission on July 11, 2006). Similar registration rights apply to the Company’s sales of securities in private placement transactions. Management timely filed the Form SB-2 registration agreement with the SEC on November 14, 2006. Accordingly, liquidated damages have not been accrued as of the balance sheet date.

NOTE 11 - ACCOUNTS PAYABLE

The Company’s current accounts payable and accrued expenses consist primarily of $118,322 borrowed on revolving credit lines utilizing corporate credit cards which bear interest at an average rate of 13.24% per annum and call for total minimum monthly installment payments of $2,700 as of December 31, 2006. However, since amounts may be due on demand and it is the Company’s intent to pay such balances in their entirety during 2007, such amounts have been classified as current.

The remaining current accounts payable and accrued liabilities consist of ordinary recurring administrative expenses which were incurred in the operations of the Company.

F-18-

OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The Company is paying all of the expenses, including legal, accounting, auditing, printing, and filing expenses associated with this registration statement. The expenses are estimated at $30,000.00.

RECENT SALES OF UNREGISTERED SECURITIES

Sales by Valley Forge Composite Technologies, Inc., a Florida Corporation

1.During the period between August 2006 and November 10, 2006, the Company sold 1,296,500 units consisting of one share of $0.001 par value common stock and one Class B warrant to purchase one share of $0.001 par value common stock at an exercise price of $1.50 per warrant. The units were sold at a price of $1.00 per unit and the Company raised $1,296,500 in gross proceeds from the offering. The offering was conducted as an offering exempt from registration pursuant to Regulation D, Rule 506. We sold to 56 purchasers, and all but one of which represented that they are accredited investors. The unaccredited investors, a husband and wife, represented that they have such knowledge and experience in financial and business matters that they are capable of evaluating the merits and risks of the prospective investment. Neither the Company nor any person acting on its behalf offered or sold the securities by any form of general solicitation or general advertising. The purchasers were known to Management or were known to business associates of Management.  No underwriting discounts or commissions were paid to any party by the Issuer.

The form of Securities Purchase Agreement used in that offering is filed herewith as Exhibit 10.4. All of the securities sold in the Regulation D offering are registered for resale in this Form SB-2 registration statement and prospectus and the prospective sellers are identified in the table on page 14 of this prospectus.

The Company has certain additional obligations with respect to the rights of unit holders. For example, there is a penalty contained in the unit purchasers’ securities purchase agreements if the Company fails to obtain a trading symbol from the NASD within three (3) months after the effective date of the Company’s registration statement registering the units or their component securities. The penalty provision requires the Company to undertake all steps necessary to locate a suitable merger partner with a company that has its common stock quoted in the Pink Sheets, the Over the Counter Bulletin Board or on NASDAQ. The Company will then cause a merger with such company within the seven (7) month period following the effective date of the Company’s registration statement registering the units or their component securities. The Company’s failure to merge with another suitable company within the seven (7) month period requires it to pay rescissionary damages and perhaps additional damages to the unit purchasers.

The Company’s compliance with the trading symbol requirement is consistent with the Company’s objective of obtaining a market for its securities and the liquidity that such a market would offer. The Company will use its best efforts to ensure compliance with the requirements of the purchase agreements and does not anticipate being unable to fulfill these requirements.

The unit purchasers are also protected in the event that there is a buyout resulting in a change of control of Company management. The unit purchasers’ purchase agreements contain a provision to the effect that: (1) if a change of control of the Company occurs within one year after the effective date of the registration statement; and (2) if, in the change of control transaction, the price per share of Company common stock that will be paid to the unit holder is less than $1.50, or, if the per share value of the unit holder’s common stock assigned by the Company’s Board of Directors in any share exchange transaction is less than $1.50, then the Company shall pay to the unit holder the amount in cash equal to 1.5 times the dollar amount of the unit holder’s unit purchase price. The Company does not anticipate a change in control event in which the early Company investors’ returns on investment would be minimized or extinguished such that this provision would become effective. This conditional provision does not provide a warranty against the traditional market and business risks of making an investment in a high-risk enterprise like our Company.

-35-

On August 11, 2006, the Company issued a convertible debenture to Coast To Coast Equity Group, Inc. in the amount of $42,000 in exchange for cash received. The interest rate is 4% per annum and runs from August 11, 2006. The amounts due may be paid in cash or cash equivalents, including but not limited to payment in the form of the Company’s common stock valued at $1.00 per share, or Coast To Coast Equity Group, Inc. may apply amounts due toward the cash exercise of its Class A Warrants. The sale was conducted in a private transaction exempt from registration pursuant to pursuant to Sections 4(2) or 4(6) of the Securities Act.

            2.On December 19, 2005, Talles Family Holdings, a Florida general partnership, sold 5,000,000 shares of the Company’s $0.001 par value common stock, which represented 100% of the issued and outstanding common stock of the Company, to Quetzal Capital Funding 1, Inc., a Florida corporation. The sale resulted in a change in control of the Company. The aggregate purchase price was $27,500. The sale was conducted in a private transaction exempt from registration pursuant to Regulation D, Rule 506, or pursuant to Sections 4(2) or 4(6) of the Act. Quetzal Capital Funding 1, Inc., and its three shareholders, have at all times material to the purchase and sale transaction have been accredited investors. Neither the Company nor any person acting on its behalf offered or sold the securities by any form of general solicitation or general advertising. The Company reported the transaction on Form 8-K filed on December 22, 2005.

Sales by Valley Forge Composite Technologies, Inc., a Pennsylvania Corporation

During the period between November 2005 and January 2006, Valley Forge Composite Technologies, Inc., a Pennsylvania Corporation, issued 10 shares of its common stock, par value $0.001, to each of the following persons in exchange for services rendered to the Company: Randy and Katie Broadright, tenants by the entirety, Michael C. Brothers, Louis C. Brothers, and Rebecca Falgren. The Company also issued 430 shares of its common stock, par value $0.001, each to Louis J. and Rosemary Brothers, tenants by the entirety, and Larry and Patricia Wilhide, tenants by the entirety, in exchange for services rendered to the Company. Louis J. Brothers and Larry Wilhide are directors of the Company, and Randy Broadright is a member of the Company’s management and is considered to be an officer. Neither the Company nor any person acting on its behalf offered or sold the securities by any form of general solicitation or general advertising. The exchanges were conducted in private transactions exempt from registration pursuant to Regulation D, Rules 504 or 505, or pursuant to Sections 4(2) or 4(6) of the Securities Act. All of the securities issued were valued at $5.00 per share, and the total value of the transactions was $4,500.00.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

Our bylaws contain the broadest form of indemnification for our officers and directors permitted under Florida law. Our bylaws generally provide as follows:

The Company shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by, or in the right of the Company) by reason of the fact that he or she is or was a director, officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, officer, employee or agent of any other corporation, partnership, joint venture, trust or other enterprise against expenses (including attorney's fees), judgments, fines, amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding, including any appeal thereof, if he or she acted in good faith in a manner he reasonably believed to be in, or not opposed to the best interests of the Company, and with respect to any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of no contenders or its equivalent shall not create, of itself, a presumption that the person did not act in good faith or in a manner which he or she reasonably believed to be in, or not opposed to, the best interests of the Company or, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful.

To the extent that a director, officer, employee or agent of the Company has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to above, or in any defense of any claim, issue or matter therein, he or she shall be indemnified against expenses, including attorneys fees, actually and reasonably incurred by him in connection therewith.

-36-

Any indemnification shall be made only if a determination is made that indemnification of the director, officer, employee or agent is proper in the circumstances because such person has met the applicable standard of conduct set forth above. Such determination shall be made either (1) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (2) by the shareholders who were not parties to such action, suit or proceeding. If neither of the above determinations can occur because the Board of Directors consists of a sole director or the Company is owned by a sole shareholder, which is controlled by the sole officer and director, then the sole officer and director or sole shareholder shall be allowed to make such determination.

Expenses incurred in defending any action, suit or proceeding may be paid in advance of the final disposition of such action, suit or proceeding as authorized in the manner provided above upon receipt of any undertaking by or on behalf of the director, officer, employee or agent to repay such amount, unless it shall ultimately be determined that she is entitled to be indemnified by the Company.

The indemnification provided shall be in addition to the indemnification rights provided pursuant to Chapter 607 of the Florida Statutes, and shall not be deemed exclusive of any other rights to which any person seeking indemnification may be entitled under any bylaw, agreement, vote of shareholders or disinterested directors or otherwise, both as to action in such person's official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent of the Company and shall inure to the benefit of the heirs, executors and administrators of such a person.

UNDERTAKINGS

 A. Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Act") may be permitted to directors, officers and controlling persons of the small business issuer pursuant to the foregoing provisions, or otherwise, the small business issuer has been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.

In the event that a claim for indemnification against such liabilities (other than the payment by the small business issuer of expenses incurred or paid by a director, officer or controlling person of the small business issuer in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the small business issuer will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

 B. For the purpose of determining liability of the registrant (Valley Forge) under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:

The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i)Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424 (Section 230.424 of this chapter);

(ii)Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

(iii)The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

(iv)Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

-37-

INDEX OF EXHIBITS

Exhibit Number	Description
2.1	Share Exchange Agreement Between Quetzal Capital 1, Inc. and the Shareholders of Valley Forge Composite Technologies, Inc., dated July 6, 2006 (incorporated by reference to the Company’s Form 8-K filed July 11, 2006)
3.1	Articles of Incorporation of Quetzal Capital 1, Inc., 2005 (Incorporated by reference to the Company's Form 10-SB as filed with the Securities and Exchange Commission on July 7, 2005).
3.2	Articles of Amendment by Quetzal Capital 1, Inc. changing the company name to Valley Forge Composite Technologies, Inc. (incorporated by reference to the Company’s Form 8-K filed July 11, 2006)
3.3	Bylaws of Quetzal Capital 1, Inc. (Incorporated by reference to the Company's Form 10-SB as filed with the Securities and Exchange Commission on July 7, 2005)
3.3	Articles of Incorporation of Valley Forge Composite Technologies, Inc., a Pennsylvania corporation (1996)
4.1	Form of certificate evidencing shares of "Common Stock” in the Company.
4.4	Articles and Plan of Share Exchange Between Quetzal Capital 1, Inc., a Florida corporation, and Valley Forge Composite Technologies, Inc., a Pennsylvania corporation, filed with the Florida Department of State, Division of Corporations, effective July 6, 2006 (incorporated by reference to the Company’s Form 8-K filed July 11, 2006)
4.5	Articles and Plan of Share Exchange Between Quetzal Capital 1, Inc., a Florida corporation, and Valley Forge Composite Technologies, Inc., a Pennsylvania corporation, filed with the Pennsylvania Department of State, Corporation Bureau, effective July 6, 2006 (incorporated by reference to the Company’s Form 8-K filed July 11, 2006)
5	Legal Opinion
10.1	Registration Rights Agreement, dated July 6, 2006 (incorporated by reference to the Company’s Form 8-K filed July 11, 2006)
10.2	Consulting Agreement between Coast To Coast Equity Group, Inc. and Quetzal Capital 1, Inc., dated July 6, 2006 (incorporated by reference to the Company’s Form 8-K filed July 11, 2006)
10.3	Warrant Agreement between Coast To Coast Equity Group, Inc. and Quetzal Capital 1, Inc., dated July 6, 2006 (incorporated by reference to the Company’s Form 8-K filed July 11, 2006)
10.4	Form of Investment Letter
23.1	Consent of Auditor
23.2	Consent of Auditor

-38-

SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form SB-2 and authorized this registration statement to be signed on its behalf by the undersigned, in the City of Covington, State of Kentucky, on May 3, 2007.

	VALLEY FORGE COMPOSITE TECHNOLOGIES, INC.
Date: May 3, 2007	By:	/s/ Louis J. Brothers
		Louis J. Brothers
		President, Secretary and Treasurer (Principal Executive Officer, Principal Financial Officer, and Principal Accounting Officer)

-39-