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**UNITED STATESSECURITIES AND EXCHANGE COMMISSION** Washington, D.C. 20549

FORM 10-QSB

(Mark One)

**x******  Quarterly
  Report Pursuant To Section 13 Or 15(d) Of The Securities Exchange Act Of 1934

For the quarterly period ended June 30, 2004

** ̈******Transition
  Report Under Section 13 Or 15(d) Of The Securities Exchange Act Of 1934

For the transition period ________ to ________

COMMISSION FILE NUMBER000-32011

BALSAM VENTURES, INC. 
  (Name of small business issuer in its charter)

|NEVADA                                                 | 52-2219056                          
|------------------------------------------------------ | ------------------------------------
|(State or other jurisdiction of incorporation
      or | (I.R.S. Employer Identification No.)
|organization)                                          |                                     
|                                                       |                                     
|                                                       |                                     
|SUITE 200, 20 EAST FOOTHILL BOULEVARD                  |                                     
|ARCADIA, CALIFORNIA                                    | 91006                               
|(Address of principal executive offices)               | (Zip Code)                          
|                                                       |                                     
|                                                       |                                     
|(626) 574-2911                                         |                                     
|Issuer's telephone number                              |                                     

SUITE 208, 20 EAST FOOTHILL BOULEVARD ARCADIA, CALIFORNIA 91006 
  Former name, former address and former fiscal year, if changed since last report

Check whether the issuer (1) filed all reports required to
  be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months
  (or for such shorter period that the registrant was required to file such reports),
  and (2) has been subject to such filing requirements for the past 90 days.

Yes x No
   ̈

State the number of shares outstanding of each of the issuer's
  classes of common equity, as of the latest practicable date: As of August
  16, 2004, the Registrant had 25,500,000 shares of common stock issued and outstanding.

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

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PART 1 - FINANCIAL INFORMATION

ITEM 1.              FINANCIAL
  STATEMENTS.

2

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BALSAM VENTURES INC.(A Development Stage Company)

FINANCIAL STATEMENTS

JUNE 30, 2004(Unaudited) 
  (Stated in U.S Dollars)



F-1

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BALSAM VENTURES INC.(A Development Stage Company)

BALANCE SHEET(Unaudited)
  (Stated in U.S. Dollars)

|                                                     |   | JUNE 30  |   |   | DECEMBER 31 |  
|---------------------------------------------------- | - | -------- | - | - | ----------- | -
|                                                     |   | 2004     |   |   | 2003        |  
|                                                     |   |          |   |   |             |  
|ASSETS                                               |   |          |   |   |             |  
|                                                     |   |          |   |   |             |  
|Current                                              |   |          |   |   |             |  
|Cash                                                 | $ | 5        |   | $ | 23          |  
|                                                     |   |          |   |   |             |  
|License Agreement(Note 4)                            |   | -        |   |   | -           |  
|                                                     |   |          |   |   |             |  
|                                                     | $ | 5        |   | $ | 23          |  
|                                                     |   |          |   |   |             |  
|LIABILITIES                                          |   |          |   |   |             |  
|                                                     |   |          |   |   |             |  
|Current                                              |   |          |   |   |             |  
|Accounts
      payable                               | $ | 85,521   |   | $ | 44,620      |  
|Convertible Notes Payable(Note 6)                    |   | 279,464  |   |   | 266,500     |  
|                                                     |   | 364,985  |   |   | 311,120     |  
|                                                     |   |          |   |   |             |  
|SHAREHOLDER'S DEFICIENCY                             |   |          |   |   |             |  
|                                                     |   |          |   |   |             |  
|Share Capital                                        |   |          |   |   |             |  
|Authorized:                                          |   |          |   |   |             |  
|100,000,000 common shares, par value with $0.001 per |   |          |   |   |             |  
|share                                                |   |          |   |   |             |  
|                                                     |   |          |   |   |             |  
|Issued
      and outstanding:                        |   |          |   |   |             |  
|25,500,000 common shares at June 30, 2004 and        |   |          |   |   |             |  
|December 31,
      2003                              |   | 25,500   |   |   | 20,500      |  
|                                                     |   |          |   |   |             |  
|Additional
      paid-in capital                     |   | 312,500  |   |   | 117,500     |  
|                                                     |   |          |   |   |             |  
|Deficit Accumulated During The Development Stage     |   | (702,980 | ) |   | (449,097    | )
|                                                     |   | (364,980 | ) |   | (311,097    | )
|                                                     |   |          |   |   |             |  
|                                                     | $ | 5        |   | $ | 23          |  

F-2

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BALSAM VENTURES INC.(A Development Stage Company)

STATEMENT OF OPERATIONS(Unaudited)
  (Stated in U.S. Dollars)

|                              |   |                    |   |   |                  |   |   |            |   |   |            |  |   | INCEPTION | 
|----------------------------- | - | ------------------ | - | - | ---------------- | - | - | ---------- | - | - | ---------- |  | - | --------- | 
|                              |   |                    |   |   |                  |   |   |            |   |   |            |  |   | AUGUST 17 | 
|                              |   | THREE MONTHS ENDED |   |   | SIX MONTHS ENDED |   |   | 1999 TO    |  
|                              |   | JUNE 30            |   |   | JUNE 30          |   |   | JUNE 30    |  
|                              |   | 2004               |   |   | 2003             |   |   | 2004       |   |   | 2003       |  |   | 2004      | 
|                              |   |                    |   |   |                  |   |   |            |   |   |            |  |   |           | 
|Expenses                      |   |                    |   |   |                  |   |   |            |   |   |            |  |   |           | 
|Bank
      charges and        |   |                    |   |   |                  |   |   |            |   |   |            |  |   |           | 
|interest                      | $ | 6,739              |   | $ | -                |   | $ | 13,214     |   | $ | -          |  | $ | 20,292    | 
|Consulting
      services     |   | 15,000             |   |   | 33,000           |   |   | 30,000     |   |   | 66,000     |  |   | 255,947   | 
|Domain
      registration     |   | -                  |   |   | 102              |   |   | -          |   |   | 185        |  |   | 436       | 
|Professional
      fees       |   | 6,722              |   |   | 10,895           |   |   | 9,147      |   |   | 12,129     |  |   | 122,850   | 
|Office
      and sundry       |   | (77                | ) |   | (16              | ) |   | 17         |   |   | 51         |  |   | 9,242     | 
|Regulatory                    |   | 908                |   |   | -                |   |   | 1,440      |   |   | -          |  |   | 8,034     | 
|Stock
      transfer services |   | 25                 |   |   | 25               |   |   | 65         |   |   | 79         |  |   | 5,405     | 
|Travel                        |   | -                  |   |   | -                |   |   | -          |   |   | -          |  |   | 9,099     | 
|Write
      off of software   |   |                    |   |   |                  |   |   |            |   |   |            |  |   |           | 
|development costs             |   | -                  |   |   | -                |   |   | -          |   |   | -          |  |   | 8,675     | 
|License
      extension       |   |                    |   |   |                  |   |   |            |   |   |            |  |   |           | 
|payment                       |   | -                  |   |   | -                |   |   | -          |   |   | -          |  |   | 63,000    | 
|License
      payment         |   | 200,000            |   |   | -                |   |   | 200,000    |   |   | -          |  |   | 200,000   | 
|                              |   |                    |   |   |                  |   |   |            |   |   |            |  |   |           | 
|Net Loss For The Period       | $ | 229,317            |   | $ | 44,006           |   | $ | 253,883    |   | $ | 78,444     |  | $ | 702,980   | 
|                              |   |                    |   |   |                  |   |   |            |   |   |            |  |   |           | 
|Net Loss Per Share            | $ | (0.01              | ) | $ | 0.01             |   | $ | (0.01      | ) | $ | 0.01       |  |   |           | 
|                              |   |                    |   |   |                  |   |   |            |   |   |            |  |   |           | 
|                              |   |                    |   |   |                  |   |   |            |   |   |            |  |   |           | 
|Weighted Average Number       |   |                    |   |   |                  |   |   |            |   |   |            |  |   |           | 
|Of Shares Outstanding         |   | 23,192,308         |   |   | 20,200,000       |   |   | 21,846,153 |   |   | 20,200,000 |  |   |           | 

F-3

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BALSAM VENTURES INC.(A Development Stage Company)

STATEMENT OF CASH FLOWS(Unaudited)
  (Stated in U.S. Dollars)

|                                                |   |                  |   |   |         |   |   | INCEPTION |  
|----------------------------------------------- | - | ---------------- | - | - | ------- | - | - | --------- | -
|                                                |   |                  |   |   |         |   |   | AUGUST 17 |  
|                                                |   | SIX MONTHS ENDED |   |   | 1999 TO |  
|                                                |   | JUNE 30          |   |   | JUNE 30 |  
|                                                |   | 2004             |   |   | 2003    |   |   | 2004      |  
|                                                |   |                  |   |   |         |   |   |           |  
|Cash Flows From Operating Activities            |   |                  |   |   |         |   |   |           |  
|Net
      loss for the period                   | $ | (253,883         | ) | $ | (78,444 | ) | $ | (702,980  | )
|                                                |   |                  |   |   |         |   |   |           |  
|Adjustments To Reconcile Net Loss To Net        |   |                  |   |   |         |   |   |           |  
|Cash Used By Operating Activities               |   |                  |   |   |         |   |   |           |  
|Write
      off of software development costs   |   | -                |   |   | -       |   |   | 8,675     |  
|Shares
      issued to extend license agreement |   | -                |   |   | -       |   |   | 63,000    |  
|Shares
      issued for license                 |   | 200,000          |   |   | -       |   |   | 200,000   |  
|Change
      in accounts payable                |   | 40,901           |   |   | 78,399  |   |   | 85,521    |  
|                                                |   | (12,982          | ) |   | (45     | ) |   | (345,784  | )
|                                                |   |                  |   |   |         |   |   |           |  
|Cash Flows From Investing Activity              |   |                  |   |   |         |   |   |           |  
|Software
      development costs                |   | -                |   |   | -       |   |   | (8,675    | )
|                                                |   |                  |   |   |         |   |   |           |  
|Cash Flows From Financing Activity              |   |                  |   |   |         |   |   |           |  
|Convertible notes                               |   | 12,964           |   |   | -       |   |   | 279,464   |  
|Share
      capital                             |   | -                |   |   | -       |   |   | 75,000    |  
|                                                |   | 12,964           |   |   | -       |   |   | 354,464   |  
|                                                |   |                  |   |   |         |   |   |           |  
|Increase (Decrease) In Cash                     |   | (18              | ) |   | (45     | ) |   | 5         |  
|                                                |   |                  |   |   |         |   |   |           |  
|Cash, Beginning Of Period                       |   | 23               |   |   | 45      |   |   | -         |  
|                                                |   |                  |   |   |         |   |   |           |  
|Cash, End Of Period                             | $ | 5                |   | $ | -       |   | $ | 5         |  

F-4

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BALSAM VENTURES INC.(A Development Stage Company)

STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)

JUNE 30, 2004(Unaudited)
  (Stated in U.S. Dollars)

|                             | COMMON STOCK |  |   |        |  |   |            |   |   |               |  
|---------------------------- | ------------ |  | - | ------ |  | - | ---------- | - | - | ------------- | -
|                             |              |  |   |        |  |   | ADDITIONAL |   |   | SHARE         |  
|                             |              |  |   |        |  |   | PAID-IN    |   |   | SUBSCRIPTIONS |  
|                             | SHARES       |  |   | AMOUNT |  |   | CAPITAL    |   |   | RECEIVABLE    |  
|                             |              |  |   |        |  |   |            |   |   |               |  
|Shares issued for cash at    |              |  |   |        |  |   |            |   |   |               |  
|$0.001                       | 5,000,000    |  | $ | 5,000  |  | $ | -          |   | $ | -             |  
|Shares issued for cash at    |              |  |   |        |  |   |            |   |   |               |  
|$0.01                        | 5,000,000    |  |   | 5,000  |  |   | 45,000     |   |   | -             |  
|Shares issued for cash at    |              |  |   |        |  |   |            |   |   |               |  
|$0.20                        | 100,000      |  |   | 100    |  |   | 19,900     |   |   | -             |  
|Subscriptions receivable     | -            |  |   | -      |  |   | -          |   |   | (2,500        | )
|Net loss for the period      | -            |  |   | -      |  |   | -          |   |   | -             |  
|                             |              |  |   |        |  |   |            |   |   |               |  
|Balance, December 31,        |              |  |   |        |  |   |            |   |   |               |  
|1999                         | 10,100,000   |  |   | 10,100 |  |   | 64,900     |   |   | (2,500        | )
|                             |              |  |   |        |  |   |            |   |   |               |  
|Subscriptions receivable     | -            |  |   | -      |  |   | -          |   |   | 2,500         |  
|Net loss for the year        | -            |  |   | -      |  |   | -          |   |   | -             |  
|                             |              |  |   |        |  |   |            |   |   |               |  
|Balance, December 31,        |              |  |   |        |  |   |            |   |   |               |  
|2000                         | 10,100,000   |  |   | 10,100 |  |   | 64,900     |   |   | -             |  
|                             |              |  |   |        |  |   |            |   |   |               |  
|Net loss for the year        | -            |  |   | -      |  |   | -          |   |   | -             |  
|                             |              |  |   |        |  |   |            |   |   |               |  
|Balance, December 31,        |              |  |   |        |  |   |            |   |   |               |  
|2001                         | 10,100,000   |  |   | 10,100 |  |   | 64,900     |   |   | -             |  
|                             |              |  |   |        |  |   |            |   |   |               |  
|Stock split (2 for 1)        | 10,100,000   |  |   | 10,100 |  |   | (10,100    | ) |   | -             |  
|Net loss for the year        | -            |  |   | -      |  |   | -          |   |   | -             |  
|                             |              |  |   |        |  |   |            |   |   |               |  
|Balance, December 31,        |              |  |   |        |  |   |            |   |   |               |  
|2002                         | 20,200,000   |  |   | 20,200 |  |   | 54,800     |   |   | -             |  
|                             |              |  |   |        |  |   |            |   |   |               |  
|Shares issued for license    |              |  |   |        |  |   |            |   |   |               |  
|extension payment at         |              |  |   |        |  |   |            |   |   |               |  
|$0.21                        | 300,000      |  |   | 300    |  |   | 62,700     |   |   | -             |  
|Net loss for the year        | -            |  |   | -      |  |   | -          |   |   | -             |  
|                             |              |  |   |        |  |   |            |   |   |               |  
|Balance, December 31,        |              |  |   |        |  |   |            |   |   |               |  
|2003                         | 20,500,000   |  |   | 20,500 |  |   | 117,500    |   |   | -             |  
|                             |              |  |   |        |  |   |            |   |   |               |  
|Shares issued for license at |              |  |   |        |  |   |            |   |   |               |  
|$0.04                        | 5,000,000    |  |   | 5,000  |  |   | 195,000    |   |   | -             |  
|Net loss for the period      | -            |  |   | -      |  |   | -          |   |   | -             |  
|                             |              |  |   |        |  |   |            |   |   |               |  
|Balance, June 30, 2004       | 25,500,000   |  | $ | 25,500 |  | $ | 312,500    |   | $ | -             |  

F-5

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BALSAM VENTURES INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2004(Unaudited)
  (Stated in U.S. Dollars)

|1. | BASIS OF PRESENTATION AND OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | Basis of Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  
|   | The unaudited financial statements as
        of June 30, 2004 included herein have been prepared without audit pursuant
        to the rules and regulations of the Securities and Exchange Commission.
        Certain information and footnote disclosures normally included in financial
        statements prepared in accordance with United States generally accepted
        accounting principles have been condensed or omitted pursuant to such
        rules and regulations. In the opinion of management, all adjustments (consisting
        of normal recurring accruals) considered necessary for a fair presentation
        have been included. It is suggested that these financial statements be
        read in conjunction with the December 31, 2003 audited financial statements
        and notes thereto.
|  
|2. | NATURE OF OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|  
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

F-6

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BALSAM VENTURES INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2004(Unaudited)
  (Stated in U.S. Dollars)

|2. | NATURE OF OPERATIONS(Continued)                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                               
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  
|3. | SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                  
|  
|   | The financial statements of the Company
        have been prepared in accordance with generally accepted accounting principles
        in the United States. Because a precise determination of many assets and
        liabilities is dependent upon future events, the preparation of financial
        statements for a period necessarily involves the use of estimates which
        have been made using careful judgement.
|  
|   | The financial statements have, in management's
        opinion, been properly prepared within reasonable limits of materiality
        and within the framework of the significant accounting policies summarized
        below:                                                                                                                                                                                                 
|  
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                               
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                  

F-7

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BALSAM VENTURES INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2004(Unaudited)
  (Stated in U.S. Dollars)

|3. | SIGNIFICANT ACCOUNTING POLICIES(Continued)
|-- | ------------------------------------------
|  
|   | b)                                        
|  
|   |                                           
|  
|   | c)                                        
|  
|   |                                           
|  
|   | d)                                        
|  
|   |                                           
|  
|   |                                           
|  
|   | e)                                        
|  
|   |                                           
|  
|   |                                           
|   |                                           
|   |                                           

F-8

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BALSAM VENTURES INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2004(Unaudited)
  (Stated in U.S. Dollars)

|3. | SIGNIFICANT ACCOUNTING POLICIES(Continued)                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | f)                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  
|   | g)                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  
|4. | LICENSE                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  
|   | Pursuant to an exclusive license agreement,
        dated November 30, 2003, the Company has acquired the exclusive right
        and license for a period of 40 years to use, commercialize and exploit
        the technology for self-chilling beverage containers within the countries
        comprising the European Union and the Republic of China. In consideration
        of the grant of the exclusive license, the Company agreed to:
|  
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  
|   | During the period ended June 30, 2004,
        the Company issued 5,000,000 common shares at $0.04 per share for a value
        of $200,000 under the license agreement. This amount has been charged
        to operations in the current period.                                                                                                                                                                                               

F-9

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BALSAM VENTURES INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2004(Unaudited)
  (Stated in U.S. Dollars)

|5. | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | During the period ended June 30, 2004, director's
        compensation totalled $Nil (2003 - $36,000).                                                                                                                                                                                                                                                                                                                                                               
|  
|   | Accounts payable includes $16,636 (2003 - $37,465)
        due to directors.                                                                                                                                                                                                                                                                                                                                                                                         
|  
|6. | CONVERTIBLE NOTES PAYABLE                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  
|   | During the year ended December 31, 2003, the Company
        issued $260,000 of three year convertible notes bearing interest of 10%
        per annum. The notes are convertible into common shares at the lesser
        of $0.03 or 50% of the average trading price of the Company's common shares
        for the ten trading days prior to conversion. The Company may, at its
        option, elect to pay a portion of the interest by issuing common shares.

F-10

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ITEM 2.              MANAGEMENT'S
  DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

Cautionary Statement Regarding Forward-Looking Statements

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

As used in this quarterly report, the terms "we", "us", "our",
  and "Balsam" mean Balsam Ventures, Inc. unless otherwise indicated. All dollar
  amounts in this quarterly report are in U.S. dollars unless otherwise stated.

DESCRIPTION OF BUSINESS

We are in the business of developing and marketing a patented
  unique proprietary technology that we have licensed from NorPac Technologies,
  Inc. (formerly Cool Can Technologies, Inc.) ("NorPac") which is intended to
  allow for the licensing and manufacture of commercially viable self-chilling
  beverage containers (the "Cool Can Technology").

NorPac's proposed product is referred to as the "InstaCool"
  product and consists of a module for insertion in an aluminum beverage container
  that incorporates a cartridge of liquid carbon dioxide ("CO2") that is held
  in place by a cartridge holder. The module consists of proprietary technology
  for which NorPac has been granted patent protection. The module would be inserted
  in an aluminum beverage container during an automated canning process. Containers
  incorporating the InstaCool product would be identified and sold as self-chilling
  beverage containers. To start the chilling process, a consumer would pull the
  tab off the container as with a regular non-chilling beverage container. When
  the tab on the lid of the beverage container is pulled by the consumer, a valve
  mechanism within the container would release the compressed liquid CO2. The
  escaping CO2 would then form into small particles of frozen snow at extremely
  cold temperatures and rapidly impart a chilling action to the beverage. The
  targeted result is that the consumer may purchase a beverage at room temperature
  and enjoy it cold without having to purchase it from a cooler or purchase ice
  to cool the beverage.

On November 30, 2003, we entered into a license agreement
  (the "License Agreement") with NorPac which grants us the exclusive right and
  license (the "License"), for a period of 40 years, to enjoy, commercialize and
  exploit the Cool Can Technology in countries comprising the European Union and
  the Peoples Republic of China (the "Exclusive Region"). Under the License Agreement,
  we have the right, within the Exclusive Region, to manufacture, use and sell
  apparatus and products embodying the Cool Can Technology and grant sub-licenses
  of our right to manufacture, use and sell products embodying the Cool Can Technology.
  The License Agreement further provides us with a right of first refusal with
  respect to any transfers, sales or assignments of the Cool Can Technology by
  NorPac,

3

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including patents, trademarks or other intellectual property
  rights. We also have a right of first refusal with respect to any licensing
  rights for countries which are not a party to the North American Free Trade
  Agreement and are outside of the Exclusive Region. In consideration for the
  rights granted to us under the License Agreement, we agreed to:

| | (a) | issue to NorPac 5,000,000 shares of our common stock,
        which shares were issued in May, 2004; and                                                                                                                                                                                                                                                           
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) | pay ongoing royalties to NorPac equal to 2% of gross
        profits from the sale of products and 5% of gross licensing revenues.
        Notwithstanding that we may not earn gross profits from the sale of products
        or gross licensing revenues, we have agreed to pay NorPac minimum royalties
        of $5,000 per month beginning January 15, 2006.

PLAN OF OPERATIONS

Our plan of operations for the next twelve months will include
  the following components:

|(1) | We plan to seek sub-licensing agreements
        to finance approximately $300,000 for the development of the Cool Can
        Technology. We plan to proceed with product development and production
        of samples of self-chilling beverage container modules. This phase of
        development will include the following elements and will take approximately
        nine months once financing is in place:
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|    | (c)                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|(2) | We anticipate spending approximately $20,000
        on professional fees over the next twelve months in complying with our
        reporting obligations under the Exchange Act.                                                                                                                                                                                                                                      
|   
|(3) | We anticipate spending approximately $140,000
        on general overhead expenses, including office expenses and consulting
        fees.                                                                                                                                                                                                                                                                             

Subject to our obtaining adequate financing, we anticipate
  that we will be spending approximately $460,000 over the next twelve-month period
  pursuing our stated plan of operations. Of these anticipated expenditures, we
  anticipate that $230,000 will be spent on our plan of operations over the next
  six months. Our present cash reserves are not sufficient for us to carry out
  our plan of operations without substantial additional financing. We are currently
  attempting to arrange for financing through sub-licenses that would enable us
  to proceed with our plan of operations. Other than the proposed financing with
  BIG K.G. described below, we do not have any financing arrangements in place
  and there is no assurance that we will be able to achieve sufficient financing
  to commercialize the Cool Can Technology and to earn revenues.

4

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Our actual expenditures and business plan may differ from
  the one stated above. Our Board of Directors may decide not to pursue this plan.
  In addition, we may modify the plan based on available financing.

PROPOSED PRIVATE PLACEMENT OF SECURITIES

We have reached a verbal agreement with BIG K.G. ("BIG"),
  a German company, pursuant to which BIG will act as our agent for the purpose
  of locating European placees for a proposed private placement of 40,000,000
  units at a price of $0.025 per unit for total potential proceeds of $1,000,000
  (the "Private Placement"). Each unit to be issued under the proposed Private
  Placement will consist of one share of our common stock and one share purchase
  warrant entitling the warrant holder to purchase one additional share of our
  common stock at a price of $0.05 per share. BIG will receive a commission of
  $100,000 for services provided in connection with the proposed Private Placement.
  Although we have reached a verbal agreement with BIG in respect of the proposed
  Private Placement and are in the final stages of formalizing that agreement,
  there is no assurance that the proposed Private Placement will actually be completed.
  If completed, the proposed Private Placement will be made pursuant to Regulation
  S of the Securities Act on the basis that the offering will be made solely to
  non-U.S. persons as defined in Regulation S.

RESULTS OF OPERATIONS

Second Quarter and Six Months Summary

|                  |                                    |           |                         
|----------------- | ---------------------------------- | --------- | ------------------------
|                  | Second Quarter Ended June
      30 |           | Six Months Ended June 30
|                  |                                    |           | Percentage              
|                  | 2004                               | 2003      | Increase / (Decrease)   
|Revenue           | $nil                               | $nil      | n/a                     
|                  |                                    |           |                         
|Expenses          | $229,317                           | $44,006   | 421%                    
|                  |                                    |           |                         
|Net Income (Loss) | $(229,317)                         | $(44,006) | 421%                    

Revenue

We did not earn any revenues during the quarter ended June
  30, 2004. We do not anticipate earning revenues until we are successful completing
  the development and commercialization of the Cool Can Technology, of which there
  is no assurance. We are presently in the development stage and we can provide
  no assurance that we will be successful in earning revenues from the Cool Can
  Technology even if we achieve the financing necessary to develop this technology.

Operating Expenses

The largest component of our operating expenses was a license
  fee we paid to NorPac equal to 5,000,000 restricted shares of our common stock
  at a price of $0.04 per share for a value of $200,000. The license fee was incurred
  in connection with our receipt of the License under the License Agreement.

5

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LIQUIDITY AND FINANCIAL CONDITION

Working Capital

|                          |                  | At December 31, | Percentage           
|------------------------- | ---------------- | --------------- | ---------------------
|                          | At June 30, 2004 | 2003            | Increase / (Decrease)
|Current Assets            | $5               | $23             | (78)%                
|Current Liabilities       | $85,521          | $44,620         | 91.6%                
|Working Capital (Deficit) | $(85,516)        | $(44,597)       | (91.7)%              

We had cash of $5 at June 30, 2004 as compared to cash of $23 at December 31,
  2003.

Cash Flows

|                                               | Six Months Ended
        June 30
|---------------------------------------------- | --------------------------------
|                                               | 2004                            
|Cash Flows from (used in) Operating Activities | $(253,883)                      
|Cash Flows from (used in) Investing Activities | $nil                            
|Cash Flows from (used in) Financing Activities | $12,964                         
|Net Increase (decrease) in Cash During Period  | $(18)                           

Financing Requirements

From inception to June 30, 2004, we have suffered recurring
  losses in the amount of $702,980 and net cash outflows from operations. We expect
  to continue to incur substantial losses to complete the development of our business.
  Since our inception, we have funded operations through common stock issuances,
  related party loans, and the support of creditors in order to meet our strategic
  objectives. Our management believes that sufficient funding will be available
  to meet our business objectives, including anticipated cash needs for working
  capital, and are currently evaluating several financing options, including a
  public offering of securities. However, there can be no assurance that we will
  be able to obtain sufficient funds to continue the development of and, if successful,
  to commence the sale of our products under development. As a result of the foregoing,
  our independent auditors believe there exists substantial doubt about our ability
  to continue as a going concern.

We will require additional financing if we are not successful
  in earning revenues from the Cool Can Technology. There is no assurance that
  we will be able to obtain additional financing if and when required. We anticipate
  that any additional financing may be in the form of sales of additional shares
  of our common stock which may result in dilution to our current shareholders.

OFF-BALANCE SHEET ARRANGEMENTS

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

6

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ITEM 3.              CONTROLS
  AND PROCEDURES.

(A)        Evaluation
  Of Disclosure Controls And Procedures

As of the end of the period covered by this report, we carried
  out an evaluation, under the supervision and with the participation of our Principal
  Executive Officer and Principal Financial Officer, of the effectiveness of the
  design and operation of our disclosure controls and procedures. Our disclosure
  controls and procedures are designed to provide a reasonable level of assurance
  of achieving our disclosure control objectives. Our Principal Executive Officer
  and Principal Accounting Officer have concluded that our disclosure controls
  and procedures are, in fact, effective at this reasonable assurance level as
  of the period covered.

(B)        Changes In
  Internal Controls Over Financial Reporting

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

7

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PART II--OTHER INFORMATION

ITEM 1.              LEGAL
  PROCEEDINGS.

We are not a party to any material legal proceedings and,
  to our knowledge, no such proceedings are threatened or contemplated.

ITEM 2.              CHANGES
  IN SECURITIES AND USE OF PROCEEDS.

During our fiscal quarter ended June 30, 2004, we completed
  the following sales of securities that have not been registered pursuant to
  the Securities Act:

In May of 2004, we issued 5,000,000 shares of our common stock to NorPac
      in consideration for the rights granted to us under the License Agreement.
      The issuance of these shares of our common stock was made in reliance of
      the exemption to registration contained in Section 4(2) of the Securities
      Act, on the basis that Norpac was a sophisticated investor.


ITEM 3.              DEFAULTS
  UPON SENIOR SECURITIES.

None.

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

None.

ITEM 5.              OTHER
  INFORMATION.

None.

8

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

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

|Exhibit
      Number |  | Description
      of Exhibit                                                                                                                                  
|-------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------
|                     |  |                                                                                                                                                               
|3.1                  |  | Articles of Incorporation.(1)                                                                                                                                 
|                     |  |                                                                                                                                                               
|3.2                  |  | Bylaws. (1)                                                                                                                                                   
|                     |  |                                                                                                                                                               
|10.1                 |  | Exclusive License Agreement dated June 5, 2002 with Cool Can
      Technologies, Inc. (2)                                                                     
|                     |  |                                                                                                                                                               
|10.2                 |  | Exclusive License Agreement dated November 30, 2003 with Cool
      Can Technologies, Inc.(3)                                                                 
|                     |  |                                                                                                                                                               
|31.1                 |  | Certification of Chief Executive
      Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                     
|                     |  |                                                                                                                                                               
|31.2                 |  | Certification of Chief Financial
      Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                     
|                     |  |                                                                                                                                                               
|32.1                 |  | Certification of Chief Executive
      Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
      906 of the Sarbanes-Oxley Act of 2002.
|                     |  |                                                                                                                                                               
|32.2                 |  | Certification of Chief Financial
      Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
      906 of the Sarbanes-Oxley Act of 2002.

|    |                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------
|(1) | Previously Filed as an Exhibit to our Form SB-2 Registration Statement
      originally filed with the SEC on March 30, 2000.
|(2) | Previously Filed as an Exhibit to our Current Report on Form 8-K filed
      on June 20, 2004                                
|(3) | Previously Filed as an Exhibit to our Current Report on Form 8-K filed
      on January 9, 2004.                             
|    |                                                                                                                              

(b)        Current Reports
  On Form 8-K.

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

9

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SIGNATURES

In accordance with the requirements of the Exchange Act, the
  registrant caused this report to be signed on its behalf by the undersigned,
  thereunto duly authorized.

BALSAM VENTURES, INC.

|By: | /s/ David Lam                 | 
|--- | ----------------------------- | 
|    |                               | 
|    | DAVID LAM                     | 
|    | PRESIDENT, CHIEF EXECUTIVE    | 
|    | OFFICER AND DIRECTOR          | 
|    | (PRINCIPAL EXECUTIVE OFFICER) | 
|    |                               | 
|    | Date: August 18, 2004         | 

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