---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-Q

(Mark One)

[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30,
2009

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________to ________

COMMISSION FILE NUMBER000-32011

BALSAM VENTURES, INC.(Exact name
of registrant as specified in its charter)

|NEVADA                                                               | 52-2219056                          
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)
|                                                                     |                                     
|                                                                     |                                     
|103 East Holly Street, #410, National Bank Building                  |                                     
|Bellingham, WA                                                       | 98225                               
|(Address of principal executive offices)                             | (Zip Code)                          

(360) 306-1133(Registrant's telephone number,
including area code)

Not Applicable(Former name, former address and
former fiscal year, if changed since last report)

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

Indicate by check mark whether the registrant has submitted electronically
  and posted on its corporate Web site, if any, every Interactive Data File required
  to be submitted and posted pursuant to Rule 405 of Regulation S-T (s. 232.405
  of this chapter) during the preceding 12 months (or for such shorter period
  that the registrant was required to submit and post such files).   [
  ] Yes    [ ] No

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.

|Large accelerated filer [ ] |                                                     | Accelerated filer [ ]         
|--------------------------- | --------------------------------------------------- | ------------------------------
|Non-accelerated filer [ ]   | (Do not check if a
      smaller reporting company) | Smaller reporting company[ x ]

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

Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable date: As of
November 12, 2009, the Registrant had 1,534,089 shares of common
stockoutstanding.

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PART I - FINANCIAL INFORMATION

|ITEM 1. | FINANCIAL STATEMENTS.
|------- | ---------------------

The accompanying unaudited financial statements have been
prepared in accordance with the instructions to Form 10-Q and Rule 8-03 of
Regulation S-X, and, therefore, do not include all information and footnotes
necessary for a complete presentation of financial position, results of
operations, cash flows, and stockholders' equity in conformity with generally
accepted accounting principles. In the opinion of management, all adjustments
considered necessary for a fair presentation of the results of operations and
financial position have been included and all such adjustments are of a normal
recurring nature. Operating results for the three and nine months ended
September 30, 2009 are not necessarily indicative of the results that can be
expected for the year ending December 31, 2009.

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

2

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BALSAM VENTURES, INC.(A Development Stage
    Company)

FINANCIAL STATEMENTS

SEPTEMBER 30, 2009

(Unaudited)

(Stated in U.S. Dollars)

---

|BALSAM VENTURES, INC.        
|-----------------------------
|(A Development Stage Company)
|                             
|BALANCE SHEETS               
|(Stated in U.S. Dollars)     

|                                                                                 |   | SEPTEMBER 30, |   |   | DECEMBER 31, |  
|-------------------------------------------------------------------------------- | - | ------------- | - | - | ------------ | -
|                                                                                 |   | 2009          |   |   | 2008         |  
|                                                                                 |   | (unaudited)   |   |   |              |  
|                                                                                 |   |               |   |   |              |  
|ASSETS                                                                           |   |               |   |   |              |  
|                                                                                 |   |               |   |   |              |  
|Current Assets                                                                   |   |               |   |   |              |  
|Cash                                                                             | $ | 451           |   | $ | 2            |  
|Deferred tax asset, less valuation
      allowance of $553,045 (2008 -$526,098 ) |   | -             |   |   | -            |  
|                                                                                 |   |               |   |   |              |  
|Total Assets                                                                     | $ | 451           |   | $ | 2            |  
|                                                                                 |   |               |   |   |              |  
|LIABILITIES AND STOCKHOLDERS
      DEFICIENCY                                   |   |               |   |   |              |  
|                                                                                 |   |               |   |   |              |  
|Current Liabilities                                                              |   |               |   |   |              |  
|Accounts payable and accrued
      liabilities                                   | $ | 124,026       |   | $ | 118,867      |  
|Accounts payable and
      accrued liabilities related parties (Note 6)         |   | 368,836       |   |   | 323,785      |  
|Loans payable (Note 5 and 6)                                                     |   | 168,193       |   |   | 138,699      |  
|                                                                                 |   |               |   |   |              |  
|Total Current
      Liabilities                                                  |   | 661,055       |   |   | 581,351      |  
|                                                                                 |   |               |   |   |              |  
|Commitments and Contractual Obligations(Note 8)                                  |   |               |   |   |              |  
|                                                                                 |   |               |   |   |              |  
|Stockholders Deficiency                                                         |   |               |   |   |              |  
|Common Stock (Note
      7)                                                      |   |               |   |   |              |  
|Authorized:                                                                      |   |               |   |   |              |  
|5,000,000 common shares with a par value of $0.001 per share                     |   |               |   |   |              |  
|Issued and outstanding:                                                          |   |               |   |   |              |  
|September 30, 2009 - 1,534,106 common shares                                     |   |               |   |   |              |  
|December 31, 2008 - 1,534,106 common shares                                      |   | 1,534         |   |   | 1,534        |  
|Additional paid-in
      capital                                                 |   | 964,466       |   |   | 964,466      |  
|Deficit accumulated during the development stage                                 |   | (1,626,604    | ) |   | (1,547,349   | )
|                                                                                 |   |               |   |   |              |  
|Total
      Stockholders Deficiency                                             |   | (660,604      | ) |   | (581,349     | )
|                                                                                 |   |               |   |   |              |  
|Total
      Liabilities and Stockholders Deficiency                             | $ | 451           |   | $ | 2            |  

The accompanying notes are an integral part of these financial
  statements.

F-2

---

|BALSAM VENTURES, INC.        
|-----------------------------
|(A Development Stage Company)
|                             
|STATEMENTS OF OPERATIONS     
|(Unaudited)                  
|(Stated in U.S. Dollars)     

|                             |   |               |   |   |               |   |   |               |   |   |               |   |   | CUMULATIVE    | 
|---------------------------- | - | ------------- | - | - | ------------- | - | - | ------------- | - | - | ------------- | - | - | ------------- | 
|                             |   |               |   |   |               |   |   |               |   |   |               |   |   | FROM          | 
|                             |   | THREE         |   |   | THREE         |   |   | NINE          |   |   | NINE          |   |   | INCEPTION     | 
|                             |   | MONTHS        |   |   | MONTHS        |   |   | MONTHS        |   |   | MONTHS        |   |   | (AUGUST 17,   | 
|                             |   | ENDED         |   |   | ENDED         |   |   | ENDED         |   |   | ENDED         |   |   | 1999) TO      | 
|                             |   | SEPTEMBER 30, |   |   | SEPTEMBER 30, |   |   | SEPTEMBER 30, |   |   | SEPTEMBER 30, |   |   | SEPTEMBER 30, | 
|                             |   | 2009          |   |   | 2008          |   |   | 2009          |   |   | 2008          |   |   | 2009          | 
|                             |   |               |   |   |               |   |   |               |   |   |               |   |   |               | 
|EXPENSES                     |   |               |   |   |               |   |   |               |   |   |               |   |   |               | 
|                             |   |               |   |   |               |   |   |               |   |   |               |   |   |               | 
|Accretion of discount on     |   |               |   |   |               |   |   |               |   |   |               |   |   |               | 
|convertible notes            | $ | -             |   | $ | -             |   | $ | -             |   | $ | -             |   | $ | 260,000       | 
|Bank charges and interest    |   | 2,439         |   |   | 1,821         |   |   | 6,399         |   |   | 4,837         |   |   | 96,127        | 
|Consulting services          |   | 15,000        |   |   | 15,000        |   |   | 45,000        |   |   | 45,000        |   |   | 561,947       | 
|Domain registration          |   | -             |   |   | -             |   |   | -             |   |   | -             |   |   | 436           | 
|Foreign exchange loss (gain) |   | 2,024         |   |   | (816          | ) |   | 3,203         |   |   | (1,274        | ) |   | 2,130         | 
|License and royalty payments |   | -             |   |   | -             |   |   | -             |   |   | -             |   |   | 328,000       | 
|Office and sundry            |   | 513           |   |   | 569           |   |   | 997           |   |   | 2,402         |   |   | 17,686        | 
|Professional fees            |   | 3,033         |   |   | 9,530         |   |   | 20,235        |   |   | 33,948        |   |   | 313,335       | 
|Regulatory                   |   | 1,061         |   |   | 874           |   |   | 2,471         |   |   | 874           |   |   | 20,730        | 
|Stock transfer services      |   | 800           |   |   | 185           |   |   | 950           |   |   | 540           |   |   | 7,805         | 
|Travel                       |   | -             |   |   | -             |   |   | -             |   |   | 525           |   |   | 9,733         | 
|Write-off of software        |   |               |   |   |               |   |   |               |   |   |               |   |   |               | 
|development costs            |   | -             |   |   | -             |   |   | -             |   |   | -             |   |   | 8,675         | 
|                             |   | 24,870        |   |   | 27,163        |   |   | 79,255        |   |   | 86,852        |   |   | 1,626,604     | 
|                             |   |               |   |   |               |   |   |               |   |   |               |   |   |               | 
|Provision for income taxes   |   | -             |   |   | -             |   |   | -             |   |   | -             |   |   | -             | 
|                             |   |               |   |   |               |   |   |               |   |   |               |   |   |               | 
|NET LOSS                     | $ | 24,870        |   | $ | 27,163        |   | $ | 79,255        |   | $ | 86,852        |   | $ | 1,626,604     | 
|                             |   |               |   |   |               |   |   |               |   |   |               |   |   |               | 
|                             |   |               |   |   |               |   |   |               |   |   |               |   |   |               | 
|BASIC AND DILUTED NET        |   |               |   |   |               |   |   |               |   |   |               |   |   |               | 
|LOSS PER SHARE               | $ | (0.02         | ) | $ | (0.02         | ) | $ | (0.05         | ) | $ | (0.050        | ) |   |               | 
|                             |   |               |   |   |               |   |   |               |   |   |               |   |   |               | 
|                             |   |               |   |   |               |   |   |               |   |   |               |   |   |               | 
|WEIGHTED AVERAGE             |   |               |   |   |               |   |   |               |   |   |               |   |   |               | 
|NUMBER OF COMMON             |   |               |   |   |               |   |   |               |   |   |               |   |   |               | 
|SHARES OUTSTANDING           |   |               |   |   |               |   |   |               |   |   |               |   |   |               | 
|-BASIC AND DILUTED           |   | 1,534,106     |   |   | 1,534,106     |   |   | 1,534,106     |   |   | 1,717,230     |   |   |               | 

The accompanying notes are an integral part of these financial
  statements.

F-3

---

|BALSAM VENTURES, INC.        
|-----------------------------
|(A Development Stage Company)
|                             
|STATEMENTS OF CASH FLOWS     
|(Unaudited)                  
|(Stated in U.S. Dollars)     

|                                                                              |   |               |   |   |               |   |   | CUMULATIVE    |  
|----------------------------------------------------------------------------- | - | ------------- | - | - | ------------- | - | - | ------------- | -
|                                                                              |   |               |   |   |               |   |   | FROM          |  
|                                                                              |   | NINE          |   |   | NINE          |   |   | INCEPTION     |  
|                                                                              |   | MONTHS        |   |   | MONTHS        |   |   | (AUGUST 17,   |  
|                                                                              |   | ENDED         |   |   | ENDED         |   |   | 1999) TO      |  
|                                                                              |   | SEPTEMBER 30, |   |   | SEPTEMBER 30, |   |   | SEPTEMBER 30, |  
|                                                                              |   | 2009          |   |   | 2008          |   |   | 2009          |  
|                                                                              |   |               |   |   |               |   |   |               |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                          |   |               |   |   |               |   |   |               |  
|                                                                              |   |               |   |   |               |   |   |               |  
|Net loss for the period                                                       | $ | (79,255       | ) | $ | (86,852       | ) | $ | (1,626,604    | )
|Adjustments to reconcile net loss to cash used in
      operating activities: |   |               |   |   |               |   |   |               |  
|Write off of software
      development costs                                 |   | -             |   |   | -             |   |   | 8,675         |  
|Interest accrued on convertible notes
      payable                           |   | -             |   |   | -             |   |   | 78,000        |  
|Shares issued to extend
      license agreement                               |   | -             |   |   | -             |   |   | 293,000       |  
|Accretion of discount on convertible
      debentures                         |   | -             |   |   | -             |   |   | 260,000       |  
|Changes in non-cash working capital
      items:                              |   |               |   |   |               |   |   |               |  
|Increase in accounts payable and
      accrued liabilities                    |   | 5,159         |   |   | 24,067        |   |   | 613,627       |  
|Increase in accounts
      payable and accrued liabilitiesrelated parties    |   | 45,051        |   |   | 44,969        |   |   | 173,836       |  
|Increase in accrued interest payable                                          |   | 6,219         |   |   | 4,606         |   |   | 15,992        |  
|                                                                              |   |               |   |   |               |   |   |               |  
|Net cash used in operating activities                                         |   | (22,826       | ) |   | (13,210       | ) |   | (183,474      | )
|                                                                              |   |               |   |   |               |   |   |               |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                          |   |               |   |   |               |   |   |               |  
|                                                                              |   |               |   |   |               |   |   |               |  
|Software development costs                                                    |   | -             |   |   | -             |   |   | (8,675        | )
|                                                                              |   |               |   |   |               |   |   |               |  
|Net cash used in investing activities                                         |   | -             |   |   | -             |   |   | (8,675        | )
|                                                                              |   |               |   |   |               |   |   |               |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                          |   |               |   |   |               |   |   |               |  
|                                                                              |   |               |   |   |               |   |   |               |  
|Issuance of common stock for cash                                             |   | -             |   |   | -             |   |   | 75,000        |  
|Proceeds from loans payable, net of
      repayments                          |   | 23,275        |   |   | 13,075        |   |   | 117,600       |  
|                                                                              |   |               |   |   |               |   |   |               |  
|Net cash provided by financing
      activities                               |   | 23,275        |   |   | 13,075        |   |   | 192,600       |  
|                                                                              |   |               |   |   |               |   |   |               |  
|NET INCREASE (DECREASE) IN CASH                                               |   | 449           |   |   | (135          | ) |   | 451           |  
|                                                                              |   |               |   |   |               |   |   |               |  
|CASH, BEGINNING OF PERIOD                                                     |   | 2             |   |   | 165           |   |   | -             |  
|                                                                              |   |               |   |   |               |   |   |               |  
|CASH, END OF PERIOD                                                           | $ | 451           |   | $ | 30            |   | $ | 451           |  

The accompanying notes are an integral part of these financial
  statements.

F-4

---

|BALSAM VENTURES, INC.        
|-----------------------------
|(A Development Stage Company)
|                             
|NOTES TO FINANCIAL STATEMENTS
|                             
|SEPTEMBER 30, 2009           
|(Unaudited)                  
|(Stated in U.S. Dollars)     

|1. | HISTORY AND ORGANIZATION OF THE COMPANY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Balsam Ventures, Inc. (the Company) was incorporated on
      August 17, 1999 in the State of Nevada. The Company was in the business of
      developing and marketing a patented, proprietary technology for
      self-chilling beverage containers (the Cool Can Technology) that it had
      licensed in 2004 until it was advised that the patents for the Cool Can
      Technology had expired. The Company settled its rights under the Agreement
      (see Note 8) in exchange for (1) the surrender for cancellation of the
      remaining 277,250 shares of common stock of the Company which were issued
      to the Licensor under the Agreement and still held by the Licensor and (2)
      the assignment of indebtedness owed to the Licensor of approximately
      $612,000 plus accrued interest to the Company (see Note 4). The Company is
      in the process of reorganizing the Companys business and is seeking and
      evaluating alternative business opportunities.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The Company is considered to be in the development stage.
      The accompanying financial statements represent those of a development
      stage enterprise and therefore, are subject to the usual business risks of
      development stage companies. The Company has not yet generated any revenue
      from operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | These financial statements have been prepared in
      conformity with generally accepted accounting principles in the United
      States of America for interim financial information. The accompanying
      financial statements do not include all information and footnote
      disclosures required for an annual set of financial statements prepared
      under United States of America generally accepted accounting principles.
      In the opinion of management, all adjustments (consisting solely of normal
      recurring accruals) considered necessary for a fair presentation of
      financial position, results of operations and cash flows as at September
      30, 2009 and for all periods presented, have been included. Interim
      results for the period ended September 30, 2009 are not necessarily
      indicative of the results that may be expected for the fiscal year as a
      whole.                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|2. | GOING CONCERN                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | These financial statements have been prepared with the
      on-going assumption that the Company will be able to realize its assets
      and discharge its liabilities in the normal course of business. However,
      certain conditions noted below raise substantial doubt about the Companys
      ability to continue as a going concern. These financial statements do not
      include any adjustments to the amounts and classifications of assets and
      liabilities that might be necessary should the Company be unable to
      continue as a going concern.                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | As shown in the accompanying financial statements, the
      Company has incurred a net loss of $1,626,604 for the period from
      inception (August 17, 1999) to September 30, 2009, and has no revenue. The
      operations of the Company have primarily been funded by the sale of common
      stock and loans payable. Continued operations of the Company are dependent
      on the Companys ability to complete equity financings, obtain additional
      loans or generate profitable operations in the future. Managements plan
      in this regard is to secure additional funds through future equity
      financings and loans payable. Such financings or loans payable may not be
      available or may not be available on reasonable terms to the
      Company.                                                                                                                                                                                                                  

F-5

---

|BALSAM VENTURES, INC.        
|-----------------------------
|(A Development Stage Company)
|                             
|NOTES TO FINANCIAL STATEMENTS
|                             
|SEPTEMBER 30, 2009           
|(Unaudited)                  
|(Stated in U.S. Dollars)     

|3. | SUMMARY OF SIGNIFICANT ACCOUNTING
      POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | The financial statements of the Company have been
      prepared in accordance with generally accepted accounting principles in
      the United States of America and are stated in U.S. dollars. The
      significant accounting policies adopted by the Company are as
      follows:                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | The preparation of financial statements in conformity
      with generally accepted accounting principles in the United States
      requires management to make estimates and assumptions that affect the
      reported amount of assets and liabilities and the disclosure of contingent
      assets and liabilities at the date of the financial statements and the
      reported amount of revenues and expenses during the reporting period.
      Actual results could differ from these estimates.                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | The functional currency of the Company is the U.S.
      dollar. Accordingly, monetary assets and liabilities denominated in a
      foreign currency are translated at the exchange rate in effect at the
      balance sheet date while non-monetary assets and liabilities are
      translated at historical rates. Revenue and expense items denominated in a
      foreign currency are translated at exchange rates prevailing when such
      items are recognized in the statement of operations. Exchange gains and
      losses arising on translation of foreign currency items are included in
      the statement of operations.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | The Company considers cash held at banks and all highly
      liquid investments with original maturities of three months or less to be
      cash and cash equivalents. At September 30, 2009 and December 31, 2008,
      the Company had no cash equivalents.                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | A deferred tax asset or liability is recorded for all
      temporary differences between financial and tax reporting and net
      operating loss carryforwards. Deferred tax expenses (benefit) result from
      the net change during the period of deferred tax assets and
      liabilities.                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Deferred tax assets are reduced by a valuation allowance
      when, in the opinion of management, it is more likely than not that some
      portion or all of the deferred tax assets will not be realized. Deferred
      tax assets and liabilities are adjusted for the effects of changes in tax
      laws and rates on the date of enactment.                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | The Company's financial instruments consist of cash,
      accounts payable and accrued liabilities, accounts payable and accrued
      liabilities related parties and loans payable. Unless otherwise noted, it
      is management's opinion that the Company is not exposed to significant
      interest, currency or credit risks arising from these financial
      instruments. The fair value of these financial instruments approximates
      their carrying values, unless otherwise noted.                                                                                                                                      

F-6

---

|BALSAM VENTURES, INC.        
|-----------------------------
|(A Development Stage Company)
|                             
|NOTES TO FINANCIAL STATEMENTS
|                             
|SEPTEMBER 30, 2009           
|(Unaudited)                  
|(Stated in U.S. Dollars)     

|3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | (f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Basic net loss per share is computed by dividing the net
      loss for the period by the weighted average number of shares of common
      stock outstanding during the period. Diluted earnings per share takes into
      consideration shares of common stock outstanding (computed under basic
      earnings per share) and potentially dilutive shares of common stock. As of
      September 30, 2009 and 2008, there were no potentially dilutive securities
      outstanding.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | (g)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The Company is a development stage company as defined in
      Statement of Financial Accounting Standards (SFAS) No. 7, Accounting
        and Reporting by Development Stage Enterprises,as it is devoting
      substantially all of its efforts to establish a new business and planned
      principal operations have not commenced.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | (h)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Cash is the only financial instrument that potentially
      subjects the Company to concentration of credit risk. The Company
      maintains cash in bank accounts that, at times, may exceed federally
      insured limits. The Company has not experienced any losses in such
      accounts and believes it is not exposed to any significant risks on its
      cash in bank accounts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | During the third quarter of 2009, the Company adopted the
      FASB Accounting Standards Codification and the Hierarchy of Generally
      Accepted Accounting Principles in accordance with FASB ASC Topic
      105,Generally Accepted Accounting Principles(the Codification). The
      Codification has become the source of authoritative U.S. generally
      accepted accounting principles (GAAP) recognized by the FASB to be applied
      by nongovernmental entities. Rules and interpretive releases of the
      Securities and Exchange Commission (SEC) under authority of federal
      securities laws are also sources of authoritative GAAP for SEC
      registrants. Effective with the Companys adoption on July 1, 2009, the
      Codification has superseded all prior non-SEC accounting and reporting
      standards. All other non-grandfathered non-SEC accounting literature not
      included in the Codification has become non-authoritative. As the adoption
      of the Codification only affected how specific references to GAAP
      literature have been disclosed in the notes to the Companys financial
      statements, it did not result in any impact on the Companys results of
      operations, financial condition, or cash flows.

F-7

---

|BALSAM VENTURES, INC.        
|-----------------------------
|(A Development Stage Company)
|                             
|NOTES TO FINANCIAL STATEMENTS
|                             
|SEPTEMBER 30, 2009           
|(Unaudited)                  
|(Stated in U.S. Dollars)     

|3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | In September 2009, the FASB issued authoritative guidance
      regarding multiple-deliverable revenue arrangements. This guidance
      addresses how to separate deliverables and how to measure and allocate
      consideration to one or more units of accounting. Specifically, the
      guidance requires that consideration be allocated among multiple
      deliverables based on relative selling prices. The guidance establishes a
      selling price hierarchy of (1) vendor-specific objective evidence, (2)
      third- party evidence and (3) estimated selling price. This guidance is
      effective for annual periods beginning after June 15, 2010 but may be
      early adopted as of the beginning of an annual period. The Company is
      currently evaluating the effect that this guidance will have on its
      financial position and results of operations.                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | ASC 855-10-20, Subsequent Events establishes accounting
      and reporting standards for events that occur after the balance sheet date
      but before financial statements are issued or are available to be issued
      and requires the disclosure of the date through which a company has
      evaluated subsequent events. This statement is effective for the Companys
      third quarter ended September 30, 2009 and the adoption did not have an
      impact on the financial statements. See Note 11 for the required
      disclosures.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | In April 2009, the FASB issued ASC 820-10-65 formerly
      FASB Staff Position FAS 157-4, Determining Fair Value When the Volume and
      Level of Activity for the Asset or Liability Have Significantly Decreased
      and Identifying Transactions That Are Not Orderly (FSP 157-4). This
      provides significant guidance for determining when a market has become
      inactive as well as guidance for determining whether transactions are not
      orderly. It also provides guidance on the use of valuation techniques and
      the use of broker quotes and pricing services. It reiterates that fair
      value is based on an exit price and also that fair value is market-driven
      and not entity-specific. The accounting standard of codification applies
      to all assets and liabilities within the scope of ASC 820 and is effective
      for all interim and annual periods ending after June 15, 2009. The
      adoption of ASC 820-10-65 did not have a material effect on the Companys
      results of operations, financial position, and cash flows.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | In April 2009, the FASB issued ASC 320-10-65, formerly
      FASB Staff Position FAS 115-2, FAS 124- 2 and EITF 99-20-2, Recognition
      and Presentation of Other-Than-Temporary Impairments (FSP 115-2). This
      accounting standard provides guidance related to determining the amount of
      an other- than-temporary impairment (OTTI) of debt securities and
      prescribes the method to be used to present information about an OTTI in
      the financial statements. It is effective for all interim and annual
      periods ending after June 15, 2009. The adoption of ASC 320-10-65 did not
      have a material effect on the Companys results of operations, financial
      position, and cash flows.                                                                                                                                                                                                                                                                                                                                                                

F-8

---

|BALSAM VENTURES, INC.        
|-----------------------------
|(A Development Stage Company)
|                             
|NOTES TO FINANCIAL STATEMENTS
|                             
|SEPTEMBER 30, 2009           
|(Unaudited)                  
|(Stated in U.S. Dollars)     

|3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | In April 2009, the FASB issued ASC 825-10-65, formerly
      FASB Staff Position FAS 107-1 and APB 28-1, Interim Disclosures about
      Fair Value of Financial Instruments (FSP 107-1), which increases the
      frequency of fair value disclosures to a quarterly basis instead of an
      annual basis. The guidance relates to fair value disclosures for any
      financial instruments that are not currently reflected on the balance
      sheet at fair value. This ASC is effective for interim and annual periods
      ending after June 15, 2009. The adoption of ASC 825-10-65 did not have a
      material effect on the Companys results of operations, financial
      position, and cash flows.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | (j)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Certain amounts reported in the prior periods have been
      reclassified to conform to the current periods presentation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4. | LOANS RECEIVABLE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | On June 30, 2008, the Company settled its rights under
      the Agreement (see Note 8) whereby the licensor assigned loans receivable
      totalling $612,000 plus accrued interest to the Company. Management
      determined that the fair value of the loans was in doubt due the
      uncertainty of the collectibility of the loans and as a result, did not
      record the assignment of the loans receivable on its books.                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|5. | LOANS PAYABLE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | During the year ended December 31, 2008, several loans
      were granted from a third party company totalling $6,925. During the nine
      months ended September 30, 2009, an additional $23,275 was granted from
      the same party. The loans bear interest at 10% per annum, compounded
      annually and are due on demand. Interest expense accrued for the three
      months ended September 30, 2009 and 2008 totalled $688 and $156,
      respectively. Interest expense accrued for the nine months ended September
      30, 2009 and 2008 totalled $1,317 and $219, respectively.                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | During the year ended December 31, 2007, two loans were
      granted from a third party company for $60,000 and $4,100, respectively.
      The first loan bears interest at 8% per annum, compounded annually and was
      due April 19, 2008. On April 19, 2008, the first loan was verbally
      extended with the same terms and is due on demand. The second loan bears
      interest at 10%, compounded annually and is due on demand. Interest
      expense accrued for the three months ended September 30, 2009 and 2008
      totalled $1,525 and $1,410, respectively. Interest expense accrued for the
      nine months ended September 30, 2009 and 2008 totalled $4,401 and $4.079,
      respectively. 

F-9

---

|BALSAM VENTURES, INC.        
|-----------------------------
|(A Development Stage Company)
|                             
|NOTES TO FINANCIAL STATEMENTS
|                             
|SEPTEMBER 30, 2009           
|(Unaudited)                  
|(Stated in U.S. Dollars)     

|6. | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Accounts payable and accrued liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | At September 30, 2009 and December 31, 2008, included in
      accounts payable and accrued liabilities related parties is $8,056 and
      $8,005, respectively, owed to a director and officer.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | At September 30, 2009 and December 31, 2008, included in
      accounts payable and accrued liabilities related parties is $360,780 and
      $315,780, respectively, owed to a shareholder for consulting fees and
      reimbursement of expenses. Consulting fees for the three months ended
      September 30, 2009 and 2008 were $15,000 and $15,000, respectively.
      Consulting fees for the nine months ended September 30, 2009 and 2008 were
      $45,000 and $45,000, respectively.                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Loans payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | During the year ended December 31, 2008, several loans
      were granted from a shareholder totalling $6,300. The loans bear interest
      at 10% per annum, compounded annually and are due on demand. Interest
      expense accrued for the three months ended September 30, 2009 and 2008
      totalled $173 and $143, respectively. Interest expense accrued for the
      nine months ended September 30, 2009 and 2008 totalled $501 and $308,
      respectively.                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | During the period ended December 31, 2006, a series of
      loans totalling $46,601 were granted from a shareholder. During the year
      ended December 31, 2007, an additional $5,000 was granted. The loans are
      non-interest bearing, unsecured and due on demand.                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|7. | COMMON STOCK                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The Companys articles of incorporation allow it to issue
      up to 5,000,000 shares of common stock, par value $0.001. Effective April
      3, 2002, the Company effected a stock split of its common stock by issuing
      two new shares for every one old share. Effective June 29, 2009, the
      Company effected a reverse stock split of its common stock by decreasing
      the number of issued and outstanding shares of common stock on a one for
      twenty (1:20) basis. Except as otherwise stated to the contrary in these
      financial statements, all references to shares and prices per share have
      been adjusted to give retroactive effect to the stock split.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | On August 17, 1999, the Company issued 500,000 shares of
      its common stock for proceeds of $5,000 in a private placement
      transaction.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | On October 29, 1999, the Company issued 500,000 shares of
      its common stock for proceeds of $50,000 in a private placement
      transaction.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

F-10

---

|BALSAM VENTURES, INC.        
|-----------------------------
|(A Development Stage Company)
|                             
|NOTES TO FINANCIAL STATEMENTS
|                             
|SEPTEMBER 30, 2009           
|(Unaudited)                  
|(Stated in U.S. Dollars)     

|7. | COMMON STOCK (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | On December 24, 1999, the Company issued 10,000 shares of
      its common stock for proceeds of $20,000 in a private placement
      transaction.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | On November 18, 2003, the Company issued 15,000 shares of
      its common stock with a value of $63,000 to initiate and extend the
      arrangement for a chilling beverage container technology.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | On May 18, 2004, the Company issued 250,000 shares of its
      common stock with a value of $200,000, as consideration for a
      license.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | On January 14, 2006, the Company issued 25,000 shares of
      its common stock with a value of $30,000, as consideration for the
      extension of a license.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | On October 1, 2006, the Company issued 433,339 common
      shares, with a value of $260,000 on conversion of convertible notes
      payable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | On October 1, 2006, the Company issued 78,000 common
      shares, with a value of $78,000 for settlement of accrued interest payable
      on $260,000 convertible notes payable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | On June 30, 2008, the Company cancelled 277,250 common
      shares surrendered when it settled its rights under the Agreement (see
      Note 8) which were issued to the Licensor under the Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|8. | LICENSE AGREEMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Pursuant to an exclusive license agreement (the
      Agreement) with NorPac Technologies, Inc (formerly Cool Can
      Technologies, Inc.) (the Licensor), dated November 30, 2003, the Company
      acquired the exclusive right and license (the License), for a period of
      40 years, to use, commercialize and exploit the Licensors proprietary
      trademarks, patents, process information, technical information, designs
      and drawings associated with the Licensors self-chilling beverage
      containers technology (the Cool Can Technology), including the right to
      manufacture, use and sell apparatus and products embodying the Technology
      within the countries comprising the European Union and the Peoples
      Republic of China. The Company also had the right to sub-license the right
      to manufacture, use and sell products embodying the Cool Can
      Technology.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | In consideration for the Agreement, the Company agreed
      to:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

F-11

---

|BALSAM VENTURES, INC.        
|-----------------------------
|(A Development Stage Company)
|                             
|NOTES TO FINANCIAL STATEMENTS
|                             
|SEPTEMBER 30, 2009           
|(Unaudited)                  
|(Stated in U.S. Dollars)     

|8. | LICENSE AGREEMENT (continued)
|-- | -----------------------------
|   |                              
|   | b)                           
|   |                              
|   |                              
|   |                              
|   |                              
|   |                              
|   |                              

On January 14, 2006, the Company
  entered into an agreement (the Extension Agreement) with the Licensor, to
  amend the terms of their Agreement. Under the Extension Agreement, the Licensor
  agreed to extend the date on which the Company is required to commence paying
  the minimum royalty payments to January 15, 2007.

In consideration for the Extension
  Agreement, the Company agreed to:

| | a) | issue 25,000 shares of its common stock (issued in
      2006);
| | -- | ---------------------------------------------------------------
| |    |                                                                
| | b) | pay $20,000 on or before January 31, 2006 (paid
      2006).   

The Cool Can Technology and patents and
  trademarks of the Licensor included in the Cool Can Technology remain the
  property of the Licensor subject to the terms of the License granted under the
  Agreement. However, the Company has a right of first refusal to acquire the
  intellectual property subject to the Agreement should the Licensor seek to
  dispose of the Cool Can Technology during the Agreement. The Agreement
  supercedes all prior arrangements and agreements between the Company and the
  Licensor in respect of the Cool Can Technology.

During the period ended March 31, 2007,
  the Company paid royalty fees of $15,000. In June 2007, the Licensor notified
  the Company that its intellectual property rights to the Cool Can Technology had
  possibly expired. As a result, the Company suspended the minimum royalty
  payments required under the Agreement effective April 1, 2007.

The Company has been advised that the
  patents for the Cool Can Technology have, in fact expired. On June 30, 2008, the
  Company settled its rights under Agreement in exchange for (1) the surrender for
  cancellation of the remaining 277,250 shares of common stock of the Company
  which were issued to the Licensor under the Agreement and still held by the
  Licensor and (2) the assignment of indebtedness owed to the Licensor of
  approximately $612,000 plus accrued interest to the Company.

F-12

---

|BALSAM VENTURES, INC.        
|-----------------------------
|(A Development Stage Company)
|                             
|NOTES TO FINANCIAL STATEMENTS
|                             
|SEPTEMBER 30, 2009           
|(Unaudited)                  
|(Stated in U.S. Dollars)     

|9. | SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH
      FLOWS
|-- | --------------------------------------------------------

| |                |   |               |  |   |               |  |   |               | 
| | -------------- | - | ------------- |  | - | ------------- |  | - | ------------- | 
| |                |   |               |  |   |               |  |   | CUMULATIVE    | 
| |                |   |               |  |   |               |  |   | FROM          | 
| |                |   | NINE          |  |   | NINE          |  |   | INCEPTION     | 
| |                |   | MONTHS        |  |   | MONTHS        |  |   | (AUGUST 17,   | 
| |                |   | ENDED         |  |   | ENDED         |  |   | 1999) TO      | 
| |                |   | SEPTEMBER 30, |  |   | SEPTEMBER 30, |  |   | SEPTEMBER 30, | 
| |                |   | 2009          |  |   | 2008          |  |   | 2009          | 
| |                |   |               |  |   |               |  |   |               | 
| | Cash paid for: |   |               |  |   |               |  |   |               | 
| | Interest       | $ | 8             |  | $ | -             |  | $ | 1,120         | 
| | Income taxes   | $ | -             |  | $ | -             |  | $ | -             | 
| |                |   |               |  |   |               |  |   |               | 

Non-cash transaction:

Investing and financing activities that
  do not have an impact on current cash flows are excluded from the statement of
  cash flows.

|10. | SEGMENT INFORMATION                                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                            
|    | The Companys business is considered as operating in one
      segment based upon the Companys organization structure, the way in which
      the operation is managed and evaluated, the availability of separate
      financial results and materiality considerations.
|    |                                                                                                                                                                                                                                                                            
|11. | SUBSEQUENT EVENTS                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                            
|    | There were no subsequent events as of November 13,
      2009.                                                                                                                                                                                                             

F-13

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|ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF
      FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|------- | --------------------------------------------------------------------------------------------

Cautionary Statement Regarding Forward-Looking
Statements

Certain statements contained in this Quarterly Report on Form
10-Q constitute "forward-looking statements. These statements, identified by
words such as plan, "anticipate, "believe, "estimate, "should, "expect"
and similar expressions include our expectations and objectives regarding our
future financial position, operating results and business strategy. These
statements reflect the current views of management with respect to future events
and are subject to risks, uncertainties and other factors that may cause our
actual results, performance or achievements, or industry results, to be
materially different from those described in the forward-looking statements.
Such risks and uncertainties include those set forth under the caption, "Part II
- Item 1A. Risk Factors, and elsewhere in this Quarterly Report. We advise you
to carefully review the reports and documents we file from time to time with the
United States Securities and Exchange Commission (the SEC), particularly our
periodic reports filed with the SEC pursuant to the Securities Exchange Act of
1934 (the Exchange Act).

INTRODUCTION

We were incorporated on August 17, 1999 under the laws of the
State of Nevada.

We currently have no business operations and minimal assets. We
are in the process of reorganizing our business and are seeking and evaluating
alternative business opportunities. Our ability to seek out and acquire an
alternative business opportunity is subject to our obtaining financing, of which
there is no assurance.

PLAN OF OPERATION

We are currently in the process of reorganizing our business
and are seeking and evaluating alternative business opportunities. As a result,
we are unable to provide an accurate estimate of our financial requirements for
the next twelve months. However, as at September 30, 2009, we currently have a
working capital deficit of $660,604 and will need substantial financing in the
near term in order to meet our current obligations as they become due and to
meet our ongoing reporting obligations under the Exchange Act. In addition, if
our management is successful in identifying a suitable business opportunity for
us to pursue, we will likely need significantly more financing in order to
pursue the new business opportunity. Currently, we do not have any financial
arrangements in place and there is no assurance that we will be able to obtain
sufficient financing on terms acceptable to us, if at all.

RESULTS OF OPERATIONS

Three Months and Nine Months Summary

|         |   | Three Months Ended September 30 |   |   | Nine Months Ended September 30 |  
|-------- | - | ------------------------------- | - | - | ------------------------------ | -
|         |   |                                 |   |   |                                |  
|         |   |                                 |   |   |                                |  
|         |   | 2009                            |   |   | 2008                           |  
|Revenue  | $ | -                               |   | $ | -                              |  
|Expenses |   | (24,870                         | ) |   | (27,163                        | )
|Net Loss | $ | (24,870                         | ) | $ | (27,163                        | )

3

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Revenue

We have not earned any revenues to date and we do not
anticipate earning revenues in the near future. We are a development stage
company and presently have only nominal operations.

Expenses

Our expenses for the quarterly periods ended September 30, 2009
and 2008 consisted of the following:

|                          |   | Three Months Ended September 30 |  |   | Nine Months Ended September 30 |  
|------------------------- | - | ------------------------------- |  | - | ------------------------------ | -
|                          |   |                                 |  |   |                                |  
|                          |   | 2009                            |  |   | 2008                           |  
|                          |   |                                 |  |   |                                |  
|Bank Charges and Interest | $ | 2,439                           |  | $ | 1,821                          |  
|Consulting Services       |   | 15,000                          |  |   | 15,000                         |  
|Foreign Exchange Loss     |   | 2,024                           |  |   | (816                           | )
|(Gain)                    |   |                                 |  |   |                                |  
|Office and Sundry         |   | 513                             |  |   | 569                            |  
|Professional Fees         |   | 3,033                           |  |   | 9,530                          |  
|Regulatory                |   | 1,061                           |  |   | 874                            |  
|Stock Transfer Services   |   | 800                             |  |   | 185                            |  
|Travel                    |   | -                               |  |   | -                              |  
|Total Operating Expenses  | $ | 24,870                          |  | $ | 27,163                         |  

Consulting fees accrued during the period were incurred with
respect to general administrative and accounting work performed in connection
with our business activities and in connection with meeting our regulatory
filings.

Professional fees for the periods presented represent fees
incurred in respect of legal and audit services provided in connection with
meeting our ongoing reporting obligations under the Exchange Act.

LIQUIDITY AND CAPITAL RESOURCES

|Working Capital         |   |                             |   |   |                            |   |  |                       | 
|----------------------- | - | --------------------------- | - | - | -------------------------- | - |  | --------------------- | 
|                        |   |                             |   |   |                            |   |  | Percentage            | 
|                        |   | At
      September 30, 2009 |   |   | At
      December 31, 2008 |   |  | Increase / (Decrease) | 
|Current Assets          | $ | 451                         |   | $ | 2                          |   |  | 22,450.0%             | 
|Current Liabilities     |   | (661,055                    | ) |   | (581,351                   | ) |  | 13.7%                 | 
|Working Capital Deficit | $ | (660,604                    | ) | $ | (581,349                   | ) |  | 13.6%                 | 

4

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|Cash Flows                                    |   |                    |   |   |                    |  
|--------------------------------------------- | - | ------------------ | - | - | ------------------ | -
|                                              |   | Nine Months Ended  |   |   | Nine Months Ended  |  
|                                              |   | September 30, 2009 |   |   | September 30, 2008 |  
|Cash Flows (Used In) Operating Activities     | $ | (22,826            | ) | $ | (13,210            | )
|Cash Flows (Used in) Investing Activities     |   | -                  |   |   | -                  |  
|Cash Flows From Financing Activities          |   | 23,275             |   |   | 13,075             |  
|Net Increase (Decrease) In Cash During Period | $ | 449                |   | $ | (135               | )

Our working capital deficit increased during the nine months
ended September 30, 2009 primarily as a result of an increase in accounts
payable due to a lack of capital to meet our ongoing expenditures. During the
nine months ended September 30, 2009, we received loans totaling $23,275 from a
third party company. The loans bear interest at a rate of 10%, compounded
annually and are due on demand.

Future Financings

From inception to September 30, 2009, we have suffered
cumulative losses in the amount of $1,626,604. We expect to continue to incur
substantial losses as we continue 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. 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. As
a result of the foregoing, our independent auditors believe there exists
substantial doubt about our ability to continue as a going concern.

We do not have any financing agreement in place, and there is
no assurance that we will be able to obtain financing if and when required. We
anticipate that financing may come in the form of sales of 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 is
material to stockholders.

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with
United States generally accepted accounting principles requires our management
to make estimates and assumptions that affect the reported amount of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Our management routinely makes judgments and estimates about the effects of
matters that are inherently uncertain.

We have identified certain accounting policies, described
below, that are most important to the portrayal of our current financial
condition and results of operations. Our significant accounting policies are
disclosed in the notes to our financial statements included with this Quarterly
Report.

5

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Foreign Currency Translation

Our functional currency is the U.S. dollar. Accordingly,
monetary assets and liabilities denominated in a foreign currency are translated
at the exchange rate in effect at the balance sheet date while non-monetary
assets and liabilities are translated at historical rates. Revenue and expense
items denominated in a foreign currency are translated at exchange rates
prevailing when such items are recognized in the statement of operations.
Exchange gains and losses arising on translation of foreign currency items are
included in the statement of operations.

|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES
      ABOUT MARKET RISK.
|------- | -----------------------------------------------------------------

Not Applicable.

|ITEM 4T. | CONTROLS AND PROCEDURES.
|-------- | ------------------------

Disclosure Controls and Procedures

We carried out an evaluation of the effectiveness of our
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) as of September 30, 2009 (the Evaluation Date). This evaluation
was carried out under the supervision and with the participation of our Chief
Executive Officer and Chief Financial Officer. Based upon that evaluation, our
Chief Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures were not effective as of the Evaluation Date
as a result of the material weaknesses in internal control over financial
reporting discussed in our Annual Report on Form 10-K for the year ended
December 31, 2008 (the 2008 Annual Report).

Disclosure controls and procedures are those controls and
procedures that are designed to ensure that information required to be disclosed
in our reports filed or submitted under the Exchange Act are recorded,
processed, summarized and reported within the time periods specified in the
SEC's rules and forms. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed in our reports filed under the Exchange Act is accumulated and
communicated to management, including our Chief Executive Officer and Chief
Financial Officer, to allow timely decisions regarding required disclosure.

Notwithstanding the assessment that our internal control over
financial reporting was not effective and that there were material weaknesses as
identified in the 2008 Annual Report, we believe that our financial statements
contained in our Quarterly Report on Form 10-Q for the quarter ended September
30, 2009 fairly present our financial condition, results of operations and cash
flows in all material respects.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial
reporting that occurred during quarter ended September 30, 2009 that have
materially affected, or that are reasonably likely to materially affect, our
internal control over financial reporting.

6

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PART II - OTHER INFORMATION

|ITEM 1. | LEGAL PROCEEDINGS.
|------- | ------------------

None.

|ITEM 1A. | RISK FACTORS.
|-------- | -------------

The following are some of the important factors that could
affect our financial performance or could cause actual results to differ
materially from estimates contained in our forward-looking statements. We may
encounter risks in addition to those described below. Additional risks and
uncertainties not currently known to us, or that we currently deem to be
immaterial, may also impair or adversely affect our business, financial
condition or results of operation.

We do not have any business operations or any significant
assets. We have not identified any alternative business opportunities. Our plan
of operation for the next twelve months will consist solely of seeking suitable
business opportunities.

We are currently in the process of reorganizing our business
and are seeking alternative business opportunities. We have not yet identified
any suitable business opportunities and there is no assurance that we will be
able to do so in the future. Even if we are able to identify suitable business
opportunities, there are no assurances that we will be able to acquire an
interest in those opportunities or that we will have the resources to pursue
such opportunities. As such, an investment in our shares at this time would be
highly speculative.

We may not be able to continue our business as a going
concern.

We have suffered recurring losses and net cash outflows since
our inception and we expect to continue to incur substantial losses as we
continue our business operations.

Our ability to continue as a going concern is dependent upon
our ability to obtain alternative business opportunities and financing,
restructure our debt, and reduce our costs. We are currently in the process of
identifying business opportunities, sources of additional financing, negotiating
changes to our debt structure and evaluating our strategic options. However,
there are no assurances that these plans can be accomplished on satisfactory
terms, or at all, or that they will provide sufficient cash to fund our
operations, pay the principal of, and interest on, our indebtedness, fund our
other liquidity needs or permit us to refinance our indebtedness. Our inability
to obtain business opportunities, additional financing, restructure our
indebtedness, or reduce our costs would have a material adverse effect on our
financial condition, results of operations and ability to satisfy our
obligations, and may result in our pursuing a restructuring of our indebtedness
either on a consensual basis or under the provisions of bankruptcy legislation,
or liquidating our business and operations. Further, our inability to obtain
additional financing or restructure our indebtedness, or our pursuing a
restructuring of our indebtedness either on a consensual basis or under the
provisions of bankruptcy legislation, may result in our stockholders losing all
or a material portion of their investment in our securities.

We have yet to earn revenues, and, because our ability to
sustain new operations is dependent on our ability to raise financing, our
accountants have expressed a substantial doubt about our ability to continue as
a going concern.

Since our inception, we have suffered recurring losses and net
cash out flows from our activities. To date, we have funded our activities
through issuances of our common stock, related party loans and the support of
creditors. There are no assurances that we will be able to obtain financing
sufficient to

7

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support our ongoing activities. As a result, our independent
auditors, expressed a substantial doubt about our ability to continue as a going
concern in their audit report on our financial statements contained in our
Annual Report on Form 10-K for the year ended December 31, 2008 filed with the
SEC on April 15, 2009.

Because our stock is a penny stock, stockholders will be
more limited in their ability to sell their stock.

The SEC has adopted rules that regulate broker-dealer practices
in connection with transactions in penny stocks. Penny stocks are generally
equity securities with a price of less than $5.00, other than securities
registered on certain national securities exchanges or quoted on the Nasdaq
system, provided that current price and volume information with respect to
transactions in such securities is provided by the exchange or quotation system.

Because our securities constitute "penny stocks" within the
meaning of the rules, the rules apply to us and to our securities. The rules may
further affect the ability of owners of shares to sell our securities in any
market that might develop for them. As long as the quotation price of our common
stock is less than $5.00 per share, the common stock will be subject to Rule
15g-9 under the Exchange Act. The penny stock rules require a broker-dealer,
prior to a transaction in a penny stock, to deliver a standardized risk
disclosure document prepared by the SEC, that:

|1. | contains a description of the nature and level of risk in
      the market for penny stocks in both public offerings and secondary
      trading;                                                                                        
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                          
|2. | contains a description of the broker's or dealer's duties
      to the customer and of the rights and remedies available to the customer
      with respect to a violation to such duties or other requirements of
      securities laws;
|   |                                                                                                                                                                                                                                          
|3. | contains a brief, clear, narrative description of a
      dealer market, including bid and ask prices for penny stocks and the
      significance of the spread between the bid and ask price;                                           
|   |                                                                                                                                                                                                                                          
|4. | contains a toll-free telephone number for inquiries on
      disciplinary actions;                                                                                                                                                       
|   |                                                                                                                                                                                                                                          
|5. | defines significant terms in the disclosure document or
      in the conduct of trading in penny stocks; and                                                                                                                             
|   |                                                                                                                                                                                                                                          
|6. | contains such other information and is in such form,
      including language, type, size and format, as the SEC shall require by
      rule or regulation.                                                                              

The broker-dealer also must provide, prior to effecting any
transaction in a penny stock, the customer with: (a) bid and offer quotations
for the penny stock; (b) the compensation of the broker-dealer and its
salesperson in the transaction; (c) the number of shares to which such bid and
ask prices apply, or other comparable information relating to the depth and
liquidity of the market for such stock; and (d) a monthly account statements
showing the market value of each penny stock held in the customer's account. In
addition, the penny stock rules require that, prior to a transaction in a penny
stock not otherwise exempt from those rules, the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements may have the effect of reducing the trading
activity in the secondary market for our stock.

8

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

None.

|ITEM 3. | DEFAULTS UPON SENIOR SECURITIES.
|------- | --------------------------------

None.

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

None.

|ITEM 5. | OTHER INFORMATION.
|------- | ------------------

None.

|ITEM 6. | EXHIBITS.
|------- | ---------

|Exhibit |                                                                                                                                                                                     
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description of Exhibit                                                                                                                                                              
|3.1     | Articles of Incorporation.(1)                                                                                                                                                       
|3.2     | Certificate of Change Pursuant to NRS 78.209 decreasing
      the authorized capital of common stock to 5,000,000 shares (1-for-20
      Reverse Stock Split).(8)                   
|3.3     | Bylaws.(1)                                                                                                                                                                          
|10.1    | Exclusive License Agreement dated November 30, 2003 with
      NorPac Technologies, Inc. (formerly Cool Can Technologies,
      Inc.)(2)                                            
|10.2    | Extension Agreement dated January 16, 2006 with NorPac
      Technologies, Inc.(4)                                                                                                  
|10.3    | Loan Agreement dated April 19, 2007 between Balsam
      Ventures, Inc. and Black Pointe Holdings Inc.(5)                                                                           
|10.4    | Promissory Note executed by Balsam Ventures, Inc. dated
      as of April 19, 2007.(5)                                                                                              
|10.5    | Release Agreement dated June 30, 2008 between Balsam
      Ventures, Inc. and NorPac Technologies, Inc.(7)                                                                          
|14.1    | Code of Ethics.(3)                                                                                                                                                                  
|31.1    | Certification of Chief Executive Officer and Chief
      Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
  2002.                                             
|32.1    | Certification of Chief Executive Officer and 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 January 9, 2004.                                 
|(3) | Previously filed as an Exhibit to our Annual Report on
      Form 10-KSB on May 17, 2005.                                        
|(4) | Previously filed as an Exhibit to our Current Report on
      Form 8-K filed on January 19, 2006.                                
|(5) | Previously filed as an Exhibit to our Current Report on
      Form 8-K filed on April 23, 2007.                                  
|(6) | Previously filed as an Exhibit to our Current Report on
      Form 8-K filed on November 2, 2007.                                
|(7) | Previously filed as an Exhibit to our Current Report on
      Form 8-K filed on July 7, 2008.                                    
|(8) | Previously filed as an Exhibit to our Current Report on
      Form 8-K filed on July 6, 2009.                                    

9

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SIGNATURES

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

|                        |  |     | BALSAM VENTURES, INC.                                 
|----------------------- |  | --- | ------------------------------------------------------
|                        |  |     |                                                       
|                        |  |     |                                                       
|                        |  |     |                                                       
|Date: November 16, 2009 |  | By: | /s/
      John Boschert                               
|                        |  |     | JOHN BOSCHERT                                         
|                        |  |     | Chief Executive Officer, Chief Financial
      Officer
|                        |  |     | President, Secretary and Treasurer                    
|                        |  |     | (Principal Executive Officer                          
|                        |  |     | and Principal Accounting Officer)                     

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