---

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 June 30, 2008

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

For the transition period from ________ to ________

COMMISSION FILE NUMBER 000-32011

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.)
|                                                                     |                                     
|1480 Gulf Road, Suite 204                                            |                                     
|Point Roberts, WA                                                    | 98281                               
|(Address of principal executive offices)                             | (Zip Code)                          

(360) 318-3886(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. Yes
[X]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). Yes [X]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 August 14, 2008, the Registrant had 30,681,663 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 six months ended June 30, 2008 are not necessarily
  indicative of the results that can be expected for the year ending December
  31, 2008.

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

JUNE 30, 2008

(Unaudited)

(Stated in U.S. Dollars)

---

BALSAM VENTURES, INC.(A Development Stage Company)

BALANCE SHEETS(Stated in U.S. Dollars)

|                                                                                 |   | JUNE 30,    |   |   | DECEMBER 31, |  
|-------------------------------------------------------------------------------- | - | ----------- | - | - | ------------ | -
|                                                                                 |   | 2008        |   |   | 2007         |  
|                                                                                 |   | (unaudited) |   |   | (audited)    |  
|                                                                                 |   |             |   |   |              |  
|ASSETS                                                                           |   |             |   |   |              |  
|                                                                                 |   |             |   |   |              |  
|Current Assets                                                                   |   |             |   |   |              |  
|Cash                                                                             | $ | 198         |   | $ | 165          |  
|Deferred tax asset, less valuation allowance
      of $510,412 (2007 -$490,117 ) |   | -           |   |   |              |  
|                                                                                 |   |             |   |   |              |  
|Total Assets                                                                     | $ | 198         |   | $ | 165          |  
|                                                                                 |   |             |   |   |              |  
|LIABILITIES AND STOCKHOLDERS DEFICIENCY                                         |   |             |   |   |              |  
|                                                                                 |   |             |   |   |              |  
|Current Liabilities                                                              |   |             |   |   |              |  
|Accounts payable and accrued liabilities                                         | $ | 99,337      |   | $ | 83,699       |  
|Accounts payable and accrued
      liabilities related parties (Note 6)         |   | 302,857     |   |   | 272,870      |  
|Loans
      payable (Note 5 and 6)                                               |   | 133,216     |   |   | 119,119      |  
|                                                                                 |   |             |   |   |              |  
|Total Current Liabilities                                                        |   | 535,410     |   |   | 475,688      |  
|                                                                                 |   |             |   |   |              |  
|Commitments and Contractual Obligations(Note 8)                                  |   |             |   |   |              |  
|                                                                                 |   |             |   |   |              |  
|Stockholders Deficiency                                                         |   |             |   |   |              |  
|Common Stock (Note 7)                                                            |   |             |   |   |              |  
|Authorized:                                                                      |   |             |   |   |              |  
|100,000,000 common shares with a par value of $0.001 per share                   |   |             |   |   |              |  
|Issued and outstanding:                                                          |   |             |   |   |              |  
|June 30, 2008                
      -30,681,663 common shares                    |   |             |   |   |              |  
|December 31, 2007        -36,226,663
      common shares                         |   | 30,682      |   |   | 36,227       |  
|Additional paid-in capital                                                       |   | 935,318     |   |   | 929,773      |  
|Deficit
      accumulated during the development stage                           |   | (1,501,212  | ) |   | (1,441,523   | )
|                                                                                 |   |             |   |   |              |  
|Total Stockholders
      Deficiency                                             |   | (535,212    | ) |   | (475,523     | )
|                                                                                 |   |             |   |   |              |  
|Total Liabilities
      and Stockholders Deficiency                             | $ | 198         |   | $ | 165          |  

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

F-2

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BALSAM VENTURES, INC.(A Development Stage Company)

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

CUMULATIVEFROMTHREE
      
      
      THREE
      
      
      SIX
      
      
      SIX
      
      
      INCEPTIONMONTHS
      
      
      MONTHS
      
      
      MONTHS
      
      
      MONTHS
      
      
      (AUGUST 17,ENDED
      
      
      ENDED
      
      
      ENDED
      
      
      ENDED
      
      
      1999) TOJUNE 30,
      
      
      JUNE 30,
      
      
      JUNE 30,
      
      
      JUNE 30,
      
      
      JUNE 30,2008
      
      
      2007
      
      
      2008
      
      
      2007
      
      
      2008EXPENSESAccretion of discount onconvertible notes
      $
      -
      
      $
      -
      
      $
      -
      
      $
      -
      
      $
      260,000Bank charges and interest
      
      1,621
      
      
      1,105
      
      
      3,016
      
      
      1,174
      
      
      86,122Consulting services
      
      15,000
      
      
      15,000
      
      
      30,000
      
      
      30,000
      
      
      495,947Domain registration
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      436Foreign exchange loss (gain)
      
      (8
      )
      
      788
      
      
      (458
      )
      
      894
      
      
      2,493License and royalty payments
      
      -
      
      
      -
      
      
      -
      
      
      15,000
      
      
      328,000Office and sundry
      
      1,458
      
      
      615
      
      
      1,833
      
      
      765
      
      
      16,999Professional fees
      
      9,087
      
      
      8,651
      
      
      24,418
      
      
      9,526
      
      
      270,609Regulatory
      
      -
      
      
      1,238
      
      
      -
      
      
      1,238
      
      
      15,832Stock transfer services
      
      100
      
      
      75
      
      
      355
      
      
      135
      
      
      6,475Travel
      
      525
      
      
      -
      
      
      525
      
      
      -
      
      
      9,624Write-off of developmentalcosts software
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      8,67527,783
      
      
      27,472
      
      
      59,689
      
      
      58,732
      
      
      1,501,212Provision for income taxes
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -NET LOSS
      $
      27,783
      
      $
      27,472
      
      $
      59,689
      
      $
      58,732
      
      $
      1,501,212BASIC AND DILUTED NETLOSS PER SHARE
      $
      (0.00
      )
      $
      (0.00
      )
      $
      (0.00
      )
      $
      (0.00
      )WEIGHTED AVERAGENUMBER OF COMMONSHARES OUTSTANDING-BASIC AND DILUTED
      
      36,196,196
      
      
      36,226,663
      
      
      36,165,729
      
      
      36,226,663


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

F-3

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BALSAM VENTURES, INC.(A Development Stage Company)

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

|                                                                              |   |          |   |   |          |   |   | CUMULATIVE  |  
|----------------------------------------------------------------------------- | - | -------- | - | - | -------- | - | - | ----------- | -
|                                                                              |   |          |   |   |          |   |   | FROM        |  
|                                                                              |   | SIX      |   |   | SIX      |   |   | INCEPTION   |  
|                                                                              |   | MONTHS   |   |   | MONTHS   |   |   | (AUGUST 17, |  
|                                                                              |   | ENDED    |   |   | ENDED    |   |   | 1999) TO    |  
|                                                                              |   | JUNE 30, |   |   | JUNE 30, |   |   | JUNE 30,    |  
|                                                                              |   | 2008     |   |   | 2007     |   |   | 2008        |  
|                                                                              |   |          |   |   |          |   |   |             |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                          |   |          |   |   |          |   |   |             |  
|                                                                              |   |          |   |   |          |   |   |             |  
|Net loss for the period                                                       | $ | (59,689  | ) | $ | (58,732  | ) | $ | (1,501,212  | )
|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:                                    |   |          |   |   |          |   |   |             |  
|Decrease in prepaid expenses                                                  |   | -        |   |   | 50       |   |   | -           |  
|Increase in accounts payable
      and accrued liabilities                    |   | 15,638   |   |   | 38,367   |   |   | 588,938     |  
|Increase in accounts payable and accrued
      liabilitiesrelated parties    |   | 29,987   |   |   | -        |   |   | 107,857     |  
|Increase in accrued interest payable                                          |   | 2,897    |   |   | 1,052    |   |   | 6,315       |  
|                                                                              |   |          |   |   |          |   |   |             |  
|Net cash used in operating activities                                         |   | (11,167  | ) |   | (19,263  | ) |   | (158,427    | )
|                                                                              |   |          |   |   |          |   |   |             |  
|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                          |   | 11,200   |   |   | 17,000   |   |   | 92,300      |  
|                                                                              |   |          |   |   |          |   |   |             |  
|Net
      cash provided by financing activities                               |   | 11,200   |   |   | 17,000   |   |   | 167,300     |  
|                                                                              |   |          |   |   |          |   |   |             |  
|NET INCREASE (DECREASE) IN CASH                                               |   | 33       |   |   | (2,263   | ) |   | 198         |  
|                                                                              |   |          |   |   |          |   |   |             |  
|CASH, BEGINNING OF PERIOD                                                     |   | 165      |   |   | 2,426    |   |   | -           |  
|                                                                              |   |          |   |   |          |   |   |             |  
|CASH, END OF PERIOD                                                           | $ | 198      |   | $ | 163      |   | $ | 198         |  

Supplemental Disclosure with respect to Cash Flows (Note 9)

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

F-4

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BALSAM VENTURES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2008(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 5,545,000 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 June 30, 2008 and for all periods presented,
        have been included. Interim results for the period ended June 30, 2008
        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 $1,501,212 for the period from inception
        (August 17, 1999) to June 30, 2008, 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

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BALSAM VENTURES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2008(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) Use of estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | 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) Foreign currency translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | 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) Cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | 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 June 30, 2008 and December 31, 2007,
        the Company had no cash equivalents.                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | (d) Income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | 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.                                                                                                                                                                                                                                                                                         

F-6

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BALSAM VENTURES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2008(Unaudited) 
  (Stated in U.S. Dollars)

|3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | (e) Fair value of financial instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | 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) Net loss per share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | 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 June 30, 2008 and 2007, there were no potentially dilutive securities
        outstanding.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | (g) Development stage                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Company is a development stage company as defined
        in Statement of Financial Accounting Standards (SFAS) 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) Concentration of credit risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | 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) Recent accounting pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | In September 2006, the Financial Accounting Standards
        Board (FASB) issued SFAS No. 157, Fair Value Measurements.SFAS No. 157 establishes a framework for measuring the fair value
        of assets and liabilities. This framework is intended to provide increased
        consistency in how fair value determinations are made under various existing
        accounting standards which permit, or in some cases require, estimates
        of fair market value. SFAS No. 157 is effective for fiscal years beginning
        after November 15, 2007, and interim periods within those fiscal years.
        In February, 2007, the FASB issued SFAS No. 159, The Fair Value
        Option for Financial Assets and Financial Liabilities. SFAS
        No. 159 permits entities to choose to measure many financial assets and
        financial liabilities at fair value. Unrealized gains and losses on items
        for which the fair value option has been elected are reported in earnings.
        SFAS No. 159 is effective for fiscal years beginning after November 15,

F-7

---

BALSAM VENTURES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2008(Unaudited) 
  (Stated in U.S. Dollars)

|3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | (i)    Recent accounting
      pronouncements (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | 2007. The adoption of FAS 159 did not have a material
        impact on the Companys consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | In December 2007, the FASB issued SFAS No. 141(R), Business
        Combinations (revised2007)("SFAS No. 141(R)"). SFAS No. 141(R)
        is a revision to previously existing guidance on accounting for business
        combinations. The statement retains the fundamental concept of the purchase
        method of accounting, and introduces new requirements for the recognition
        and measurement of assets acquired, liabilities assumed and noncontrolling
        interests. SFAS No. 141(R) also requires acquisition-related transaction
        and restructuring costs to be expensed rather than treated as part of
        the cost of the acquisition. SFAS No. 141(R) applies prospectively to
        business combinations for which the acquisition date is on or after the
        beginning of the first annual reporting period beginning on or after December
        15, 2008. The Company is currently evaluating the impact this statement
        will have on its financial position and results of operations and does
        not expect this statement to have a material impact on its financial position
        and results of operations.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | In December 2007, the FASB issued SFAS No. 160, Noncontrolling
        Interests in Consolidated Financial Statements("SFAS No. 160"). The
        Statement requires that noncontrolling interests be reported as stockholders
        equity, a change that will affect the Company's financial statement presentation
        of minority interests in its consolidated subsidiaries. The Statement
        also establishes a single method of accounting for changes in a parent's
        ownership interest in a subsidiary as long as that ownership change does
        not result in deconsolidation. The statement is effective for fiscal years
        beginning after December 15, 2008. The Company is currently evaluating
        the impact of SFAS No. 160 and does not expect this statement to have
        a material impact on its financial position and results of operations.                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | In March 2008, the FASB issued SFAS No. 161, Disclosures
        about Derivative Instruments and Hedging Activities("SFAS No. 161").
        SFAS No. 161 amends and expands the disclosure requirements of SFAS No.
        133, Accounting for Derivative Instruments and Hedging Activities,
        and requires entities to provide enhanced qualitative disclosures about
        objectives and strategies for using derivatives, quantitative disclosures
        about fair values and amounts of gains and losses on derivative contracts,
        and disclosures about credit-risk-related contingent features in derivative
        agreements. This statement applies to all entities and all derivative
        instruments. SFAS 161 is effective for financial statements issued for
        fiscal years and interim periods beginning after November 15, 2008. The
        Company is currently evaluating the impact of SFAS No. 161 and does not
        expect this statement to have a material impact on its financial position
        and results of operations.                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | (j)    Reclassifications                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Certain amounts reported in the prior periods have been
        reclassified to conform to the current periods presentation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

F-8

---

BALSAM VENTURES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2008(Unaudited) 
  (Stated in U.S. Dollars)

|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 collectibility of the loans was in doubt and as a result, did
        not record the assignment of the loans receivable on its books.                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|5. | LOANS PAYABLE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | During the period ended June 30, 2008, two loans were
        granted from a third party company for $2,200 and $3,500, respectively.
        The loans bear interest at 10% per annum, compounded annually and are
        due on demand. Interest expense accrued for the three and six months ended
        June 30, 2008 totalled $62 and $62, 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. Subsequent to March 31, 2008, the first loan was
        verbally extended and continues to bear interest at 8% per annum, compounded
        annually 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 June 30, 2008 and 2007 totalled $1,374 and $1,052.
        Interest expense accrued for the six months ended June 30, 2008 and 2007
        totalled $2,670 and $1,052, respectively.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|6. | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Accounts payable and accrued liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

At June 30, 2008 and December 31, 2007,
  included in accounts payable and accrued liabilities related parties is
  $8,077 and $8,090, respectively, owed to a director and officer and $9,000 and
  $9,000, respectively, owed to a former director and officer.

At June 30, 2008 and December 31, 2007,
  included in accounts payable and accrued liabilities related parties is
  $285,780 and $255,780 owed to a shareholder for consulting fees and reimbursement
  of expenses. Consulting fees for the three months ended June 30, 2008 and 2007
  were $15,000 and $15,000, respectively. Consulting fees for the six months ended
  June 30, 2008 and 2007 were $30,000 and $30,000, respectively.

F-9

---

BALSAM VENTURES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2008(Unaudited) 
  (Stated in U.S. Dollars)

|6. | RELATED PARTY TRANSACTIONS (continued)
      Loans payable
|-- | ----------------------------------------------------------

During the period ended June 30, 2008,
  several loans were granted from a shareholder totalling $5,500. The loans bear
  interest at 10% per annum, compounded annually and are due on demand. Interest
  expense accrued for the three and six months ended June 30, 2008 totalled $136
  and $165, 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 100,000,000 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. 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 10,000,000 shares
        of its common stock at $0.0005 per share in a private placement transaction.                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | On October 29, 1999, the Company issued 10,000,000 shares
        of its common stock at $0.005 per share in a private placement transaction.                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | On December 24, 1999, the Company issued 200,000 shares
        of its common stock at $0.10 per share in a private placement transaction.                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | On November 18, 2003, the Company issued 300,000 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 5,000,000 shares
        of its common stock with a value of $200,000, as consideration for a license.                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | On January 14, 2006, the Company issued 500,000 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 8,666,663 common
        shares, with a value of $260,000 on conversion of convertible notes payable                                                                                                                                                                                                                                                                                                                                                      

F-10

---

BALSAM VENTURES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2008(Unaudited) 
  (Stated in U.S. Dollars)

|7. | COMMON STOCK                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | On October 1, 2006, the Company issued 1,560,000
        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 5,545,000
        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 has 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)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

F-11

---

BALSAM VENTURES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2008(Unaudited) 
  (Stated in U.S. Dollars)

|8. | LICENSE AGREEMENT (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | In consideration for the Extension Agreement,
        the Company agreed to:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | 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 5,545,000 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.                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|9. | SUPPLEMENTAL DISCLOSURE WITH RESPECT TO
        CASH FLOWS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

| |                |   |          |  |   |          |  |   | CUMULATIVE  | 
| | -------------- | - | -------- |  | - | -------- |  | - | ----------- | 
| |                |   |          |  |   |          |  |   | FROM        | 
| |                |   | SIX      |  |   | SIX      |  |   | INCEPTION   | 
| |                |   | MONTHS   |  |   | MONTHS   |  |   | (AUGUST 17, | 
| |                |   | ENDED    |  |   | ENDED    |  |   | 1999) TO    | 
| |                |   | JUNE 30, |  |   | JUNE 30, |  |   | JUNE 30,    | 
| |                |   | 2008     |  |   | 2007     |  |   | 2008        | 
| |                |   |          |  |   |          |  |   |             | 
| | Cash paid for: |   |          |  |   |          |  |   |             | 
| | Interest       | $ | -        |  | $ | -        |  | $ | 1,110       | 
| | Income taxes   | $ | -        |  | $ | -        |  | $ | -           | 
| |                |   |          |  |   |          |  |   |             | 

F-12

---

BALSAM VENTURES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2008(Unaudited) 
  (Stated in U.S. Dollars)

|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 EVENT                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                  
|    | On August 6, 2008, a loan was granted from a third party
        company for $200. The loan bears interest at 10%, compounded annually
        and is due on demand.                                                                                                             

F-13

---

**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

The following discussion and analysis summarizes our plan of
operation for the next twelve months, our results of operations for the second
quarter and six month period ended June 30, 2008 and changes in our financial
condition from December 31, 2007. This discussion should be read in conjunction
with the Managements Discussion and Analysis or Plan of Operation included in
our Annual Report on Form 10-K for the year ended December 31, 2007.

PLAN OF OPERATION

Until recently, we were in the business of developing and
marketing a technology for self-chilling beverage containers (the Cool Can
Technology) that we licensed from NorPac Technologies, Inc. (formerly Cool Can
Technologies, Inc.) (NorPac). In 2007, it came to our attention that NorPacs
patents for the Cool Can Technology expired. As a result, our management decided
to abandon the development of the Cool Can Technology.

On June 30, 2008, we entered into a Release Agreement with
NorPac, pursuant to which we agreed to release NorPac from any legal claims and
liabilities in connection with a license agreement dated November 30, 2003, and
as amended on January 12, 2006 (collectively, the Release) between us and
NorPac. Under the terms of the License Agreement, NorPac had granted a license
to us over the Cool Can Technology. However, NorPacs patents over this
technology have expired. In exchange for our agreeing to release NorPac from its
obligations under the License Agreement, NorPac agreed to:

|(a) | surrender for cancellation the remaining 5,545,000 shares
      of our common stock which had been issued to NorPac under terms of the
      License Agreement and still owed by NorPac; and                                                  
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                               
|(b) | assign to us an indebtedness owed to NorPac of
      approximately $612,000 plus accrued interest. Readers are cautioned that
      there is substantial doubt that we will be able to collect any or all of
      this assigned indebtedness.

We are currently in the process of reorganizing our business
and are seeking and evaluating alternative business opportunities.

3

---

As a result, we are unable to provide an accurate estimate of
our financial requirements for the next twelve months. However, as at June 30,
2008, we currently have a working capital deficit of $535,212 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

Second Quarter and Six Months Summary

Second
        Quarter Ended June 30
      
      
      Six
        Months Ended June 30Percentage
      
      
      
      
      
      
      
      
      PercentageIncrease /
      
      
      
      
      
      
      
      
      Increase /2008
      
      
      2007
      
      
      (Decrease)
      
      
      2008
      
      
      2007
      
      
      (Decrease)Revenue
      $
      -
      
      $
      -
      
      
      n/a
      
      $
      -
      
      $
      -
      
      
      n/aExpenses
      $
      (27,783
      )
      $
      (27,472
      )
      
      1.1%
      
      $
      (59,689
      )
      $
      (58,732
      )
      
      1.6%Net Income (Loss)
      $
      (27,783
      )
      $
      (27,472
      )
      
      1.1%
      
      $
      (59,689
      )
      $
      (58,732
      )
      
      1.6%


Revenue

We did not earn any revenues during the fiscal quarter ended
June 30, 2008 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 June 30, 2008 and
2007 consisted of the following:

Second Quarter Ended
      
      
      Percentage
      
      
      Six Months Ended
      
      
      PercentageJune 30
      
      
      Increase /
      
      
      June 30
      
      
      Increase /2008
      
      
      2007
      
      
      (Decrease)
      
      
      2008
      
      
      2007
      
      
      (Decrease)Bank Charges and Interest
      $
      1,621
      
      $
      1,105
      
      
      46.7%
      
      $
      3,016
      
      $
      1,174
      
      
      156.9%Consulting Services
      $
      15,000
      
      $
      15,000
      
      
      n/a
      
      $
      30,000
      
      $
      30,000
      
      
      n/aForeign Exchange Loss
      $
      (8
      )
      $
      788
      
      
      (101.0%)
      
      $
      (458
      )
      $
      894
      
      
      (151.2%)(Gain)License and Royalty
      $
      -
      
      $
      -
      
      
      n/a
      
      $
      -
      
      $
      15,000
      
      
      (100%)PaymentsOffice and Sundry
      $
      1,458
      
      $
      615
      
      
      137.1%
      
      $
      1,833
      
      $
      765
      
      
      139.6%Professional Fees
      $
      9,087
      
      $
      8,651
      
      
      5.0%
      
      $
      24,418
      
      $
      9,526
      
      
      156.3%Regulatory
      $
      -
      
      $
      1,238
      
      
      (100%)
      
      $
      -
      
      $
      1,238
      
      
      (100%)Stock Transfer Services
      $
      100
      
      $
      75
      
      
      33.3%
      
      $
      355
      
      $
      135
      
      
      163.0%Travel
      $
      525
      
      $
      -
      
      
      n/a
      
      $
      525
      
      $
      -
      
      
      n/aTotal Operating Expenses
      $
      27,783
      
      $
      27,472
      
      
      1.1%
      
      $
      59,689
      
      $
      58,732
      
      
      1.6%


4

---

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 quarter ended June 30, 2008 represent
fees incurred in respect of legal and audit services provided in connection with
meeting our ongoing reporting obligations under the Exchange Act.

Effective April 1, 2007, we suspended our royalty payments to
  NorPac as NorPacs patents for the Cool Can Technology expired. As a result,
  we had no expenses relating to the license and royalty payments during the quarter
  ended June 30, 2008.

LIQUIDITY AND CAPITAL RESOURCES

|Working Capital     |   |                        |   |   |                            |   |  |                       | 
|------------------- | - | ---------------------- | - | - | -------------------------- | - |  | --------------------- | 
|                    |   |                        |   |   |                            |   |  | Percentage            | 
|                    |   | At
      June 30, 2008 |   |   | At
      December 31, 2007 |   |  | Increase / (Decrease) | 
|Current Assets      | $ | 198                    |   | $ | 165                        |   |  | 20.0%                 | 
|Current Liabilities | $ | (535,410               | ) | $ | (475,688                   | ) |  | 12.6%                 | 
|Working Capital     | $ | (535,212               | ) | $ | (475,523                   | ) |  | 12.6%                 | 

|Cash Flows                                      |   |                     |   |   |                     |  
|----------------------------------------------- | - | ------------------- | - | - | ------------------- | -
|                                                |   | Six Months Ended    |   |   | Six Months Ended    |  
|                                                |   | June
      30, 2008 |   |   | June
      30, 2007 |  
|Cash Flows (Used In)
      Operating Activities | $ | (11,167             | ) | $ | (19,263             | )
|Cash Flows (Used in) Investing Activities       | $ | -                   |   | $ | -                   |  
|Cash Flows From Financing
      Activities      | $ | 11,200              |   | $ | 17,000              |  
|Net Increase (Decrease) In Cash During Period   | $ | 33                  |   | $ | (2,263              | )

Our working capital deficit increased during the six months
ended June 30, 2008 as we had no sources of revenue during the period and the
fact that our only source of financing during the period was in the form of
short-term loans. During the period ended June 30, 2008, we received loans
totaling $11,200 as follows:

| | (a) | loans from a shareholder totaling $5,500. The loans bear
      interest at a rate of 10%, compounded annually and are due on
    demand.          
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                   
| | (b) | loans from a third party company totaling $5,700. The
      loans bear interest at a rate of 10%, compounded annually and are due on
      demand.

Future Financings

From inception to June 30, 2008, we have suffered cumulative
losses in the amount of $1,501,212. 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, including a public offering
of securities. However, there can be no assurance that we will be able to obtain
sufficient funds to

5

---

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.

There is no assurance that we will be able to obtain additional
financing if and when required. We anticipate that additional financing may come
in the form of sales of additional shares of our common stock which may result
in dilution to our current shareholders.

At the end of our fiscal year ended December 31, 2003, we
reached a verbal agreement with BIG K.G. (BIG), a German company, pursuant to
which BIG agreed to act as our agent for the purpose of locating European
placees for a proposed private placement of 40,000,000 units at a price of
$0.025 per unit for total potential proceeds of $1,000,000 (the Private
Placement). Under the terms of our verbal agreement, each unit to be issued
under the proposed Private Placement will consist of one share in our common
stock and one share purchase warrant entitling the warrant holder to purchase
one additional share of our common stock at a price of $0.05 per share. BIG is
to receive a commission of $100,000 for services provided in connection with the
proposed Private Placement.

On May 10, 2007, we formally approved an offering of 4,000,000
units under the terms of our verbal agreement with BIG, for total expected
proceeds of $100,000. However, BIG will not receive a finders fee or commission
in connection with this offering. As of the date of filing of this Quarterly
Report, we had not yet completed the sale of any units under our agreement with
BIG. As disclosed above, we are no longer pursuing the development of the Cool
Can Technology. As a result, although our agreement with BIG remains in place,
and the formal offering of the above securities remains outstanding, there is a
substantial doubt that we will be able to complete the sale of any of the
securities offered.

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 audited financial statements for the year ended
December 31, 2007 included in our Annual Report on Form 10-K filed with the SEC
on April 14, 2008.

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-

6

---

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 June 30, 2008 (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 below.

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 this report, we believe that our financial statements contained in
our Quarterly Report on Form 10-Q for the quarter ended June 30, 2008 fairly
present our financial condition, results of operations and cash flows in all
material respects.

Material Weaknesses

Management assessed the effectiveness of our internal control
over financial reporting as of Evaluation Date and identified the following
material weaknesses:

Insufficient Resources:We have an inadequate number of
personnel with requisite expertise in the key functional areas of finance and
accounting.

Inadequate Segregation of Duties: We have an inadequate
number of personnel to properly implement control procedures.

Lack of Audit Committee & Outside Directors on the
Companys Board of Directors:We do not have a functioning audit committee
and outside directors on our Board of Directors, resulting in ineffective
oversight in the establishment and monitoring of required internal controls and
procedures.

7

---

Changes in Internal Control Over Financial Reporting

As of the Evaluation Date, there were no changes in our
internal control over financial reporting that occurred during the quarter ended
June 30, 2008 that have materially affected, or that are reasonably likely to
materially affect, our internal control over financial reporting.

8

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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

9

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support our ongoing activities. As a result, Davidson &
Company LLP, Chartered Accountants, 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, 2007 filed with the SEC on April 14, 2008.

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.

10

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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     |  | 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)                                                                                                              
|10.1    |  | Release Agreement
        dated June 30, 2008 between Balsam Ventures, Inc. and NorPac Technologies,
        Inc.(7)                                                                                  
|14.1    |  | Code of Ethics.(3)                                                                                                                                                                                    
|16.1    |  | Letter of Telford
        Sadovnick, PLLC.(6)                                                                                                                                                         
|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.                                    

11

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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: | August
      14, 2008 |  | By: | /s/
      John Boschert                               
|      |                       |  |     | JOHN BOSCHERT                                         
|      |                       |  |     | Chief Executive Officer, Chief Financial
      Officer
|      |                       |  |     | President, Secretary and Treasurer                    
|      |                       |  |     | (Principal Executive Officer                          
|      |                       |  |     | and Principal Accounting Officer)                     

---