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

FORM 10-QSB

x Quarterly
  Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
  For the quarterly period ended September 30, 2003

 ̈ Transition
  Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934 
  For the transition period __________ to __________

Commission File Number 000-32011

BALSAM VENTURES, INC.(Exact name of small Business Issuer as specified in its charter)

|NEVADA                                          | 52-2219056                       
|----------------------------------------------- | ---------------------------------
|(State or other jurisdiction of                 | (IRS Employer Identification No.)
|incorporation or organization)                  |                                  
|                                                |                                  
|                                                |                                  
|SUITE 208, 20 EAST FOOTHILL BLVD.               |                                  
|ARCADIA, CALIFORNIA                             | 91006                            
|(Address of principal executive offices)        | (Zip Code)                       
|                                                |                                  
|Issuer's telephone number, including area code: | 626-574-2911                     

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

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

State the number of shares outstanding of each of the issuer's
  classes of common stock, as of the latest practicable date: 20,200,000 shares
  of common stock, $0.001 par value outstanding as of September 30, 2003.

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PART 1 - FINANCIAL INFORMATION

Item 1.     Financial Statements

The accompanying un-audited financial statements have been
  prepared in accordance with the instructions to Form 10-QSB and, therefore,
  do not include all information and footnotes necessary for a complete presentation
  of financial position, results of operations, cash flows, and stockholders'
  deficit 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
  nine months ended September 30, 2003 are not necessarily indicative of the results
  that can be expected for the year ending December 31, 2003.



2

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BALSAM VENTURES INC. (A Development Stage Company)

FINANCIAL STATEMENTS

SEPTEMBER 30, 2003 (Unaudited)
  (Stated in U.S. Dollars)



F-1

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BALSAM VENTURES INC. (A Development Stage Company)

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

|                                                        |   | **SEPTEMBER
      30** |   |   | DECEMBER
      31 |  
|------------------------------------------------------- | - | ---------------------- | - | - | ----------------- | -
|                                                        |   | 2003                   |   |   | 2002              |  
|ASSETS                                                  |   |                        |   |   |                   |  
|                                                        |   |                        |   |   |                   |  
|Current                                                 |   |                        |   |   |                   |  
|Cash                                                    | $ | -                      |   | $ | 45                |  
|                                                        |   |                        |   |   |                   |  
|Software Development Costs                              |   | 8,675                  |   |   | 8,675             |  
|                                                        | $ | 8,675                  |   | $ | 8,720             |  
|                                                        |   |                        |   |   |                   |  
|LIABILITIES                                             |   |                        |   |   |                   |  
|                                                        |   |                        |   |   |                   |  
|Current                                                 |   |                        |   |   |                   |  
|Accounts payable                                        | $ | 265,559                |   | $ | 150,401           |  
|                                                        |   |                        |   |   |                   |  
|SHAREHOLDERS DEFICIENCY                                |   |                        |   |   |                   |  
|                                                        |   |                        |   |   |                   |  
|Share Capital                                           |   |                        |   |   |                   |  
|Authorized:                                             |   |                        |   |   |                   |  
|100,000,000
      common shares, par value with $ 0.001 |   |                        |   |   |                   |  
|per
      share                                         |   |                        |   |   |                   |  
|                                                        |   |                        |   |   |                   |  
|Issued and outstanding:                                 |   |                        |   |   |                   |  
|20,200,000
      common shares                          |   | 20,200                 |   |   | 20,200            |  
|                                                        |   |                        |   |   |                   |  
|Additional paid-in capital                              |   | 54,800                 |   |   | 54,800            |  
|                                                        |   |                        |   |   |                   |  
|Deficit Accumulated During The Development Stage        |   | (331,884               | ) |   | (216,681          | )
|                                                        |   | (256,884               | ) |   | (141,681          | )
|                                                        | $ | 8,675                  |   | $ | 8,720             |  

F-2

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BALSAM VENTURES INC. (A Development Stage Company)

STATEMENT OF LOSS AND DEFICIT

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

|                         |   |                    |  |   |                   |   |   |              |  |   |            |  |   | INCEPTION | 
|------------------------ | - | ------------------ |  | - | ----------------- | - | - | ------------ |  | - | ---------- |  | - | --------- | 
|                         |   |                    |  |   |                   |   |   |              |  |   |            |  |   | AUGUST 17 | 
|                         |   | THREE MONTHS ENDED |  |   | NINE MONTHS ENDED |   |   | 1999 TO      | 
|                         |   | SEPTEMBER 30       |  |   | SEPTEMBER 30      |   |   | SEPTEMBER 30 | 
|                         |   | 2003               |  |   | 2002              |   |   | 2003         |  |   | 2002       |  |   | 2003      | 
|                         |   |                    |  |   |                   |   |   |              |  |   |            |  |   |           | 
|Expenses                 |   |                    |  |   |                   |   |   |              |  |   |            |  |   |           | 
|Consulting services      | $ | 33,000             |  | $ | 40,020            |   | $ | 99,000       |  | $ | 42,847     |  | $ | 192,947   | 
|Domain registration      |   | -                  |  |   | -                 |   |   | 185          |  |   | 46         |  |   | 436       | 
|Professional fees        |   | 3,052              |  |   | 9,506             |   |   | 15,181       |  |   | 31,674     |  |   | 108,043   | 
|Office and sundry        |   | 327                |  |   | 2,532             |   |   | 378          |  |   | 5,395      |  |   | 9,425     | 
|Regulatory               |   | -                  |  |   | (2,515            | ) |   | -            |  |   | 4,985      |  |   | 6,160     | 
|Stock transfer services  |   | 380                |  |   | 212               |   |   | 459          |  |   | 2,862      |  |   | 5,774     | 
|Travel                   |   | -                  |  |   | 2,288             |   |   | -            |  |   | 2,288      |  |   | 9,099     | 
|                         |   |                    |  |   |                   |   |   |              |  |   |            |  |   |           | 
|Net Loss For The Period  |   | 36,759             |  |   | 52,043            |   |   | 115,203      |  |   | 90,097     |  | $ | 331,884   | 
|                         |   |                    |  |   |                   |   |   |              |  |   |            |  |   |           | 
|Deficit Accumulated      |   |                    |  |   |                   |   |   |              |  |   |            |  |   |           | 
|During The               |   |                    |  |   |                   |   |   |              |  |   |            |  |   |           | 
|Development Stage,       |   |                    |  |   |                   |   |   |              |  |   |            |  |   |           | 
|Beginning Of Period      |   | 295,125            |  |   | 91,311            |   |   | 216,681      |  |   | 53,257     |  |   |           | 
|                         |   |                    |  |   |                   |   |   |              |  |   |            |  |   |           | 
|Deficit Accumulated      |   |                    |  |   |                   |   |   |              |  |   |            |  |   |           | 
|During The               |   |                    |  |   |                   |   |   |              |  |   |            |  |   |           | 
|Development Stage,       |   |                    |  |   |                   |   |   |              |  |   |            |  |   |           | 
|End Of Period            | $ | 331,884            |  | $ | 143,354           |   | $ | 331,884      |  | $ | 143,354    |  |   |           | 
|                         |   |                    |  |   |                   |   |   |              |  |   |            |  |   |           | 
|                         |   |                    |  |   |                   |   |   |              |  |   |            |  |   |           | 
|Net Loss
      Per Share | $ | 0.01               |  | $ | 0.01              |   | $ | 0.01         |  | $ | 0.01       |  |   |           | 
|                         |   |                    |  |   |                   |   |   |              |  |   |            |  |   |           | 
|Weighted Average         |   |                    |  |   |                   |   |   |              |  |   |            |  |   |           | 
|Number Of Shares         |   |                    |  |   |                   |   |   |              |  |   |            |  |   |           | 
|Outstanding              |   | 20,200,000         |  |   | 20,200,000        |   |   | 20,200,000   |  |   | 20,200,000 |  |   |           | 

F-3

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BALSAM VENTURES INC. (A Development Stage Company)

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

|                             |   |                    |   |   |                   |   |   |              |   |   |         |   |   | INCEPTION |  
|---------------------------- | - | ------------------ | - | - | ----------------- | - | - | ------------ | - | - | ------- | - | - | --------- | -
|                             |   |                    |   |   |                   |   |   |              |   |   |         |   |   | AUGUST 17 |  
|                             |   | THREE MONTHS ENDED |   |   | NINE MONTHS ENDED |   |   | 1999 TO      |  
|                             |   | SEPTEMBER 30       |   |   | SEPTEMBER 30      |   |   | SEPTEMBER 30 |  
|                             |   | 2003               |   |   | 2002              |   |   | 2003         |   |   | 2002    |   |   | 2003      |  
|                             |   |                    |   |   |                   |   |   |              |   |   |         |   |   |           |  
|Cash Flows From Operating    |   |                    |   |   |                   |   |   |              |   |   |         |   |   |           |  
|Activities                   |   |                    |   |   |                   |   |   |              |   |   |         |   |   |           |  
|Net loss for the period      | $ | (36,759            | ) | $ | (52,043           | ) | $ | (115,203     | ) | $ | (90,097 | ) | $ | (331,884  | )
|                             |   |                    |   |   |                   |   |   |              |   |   |         |   |   |           |  
|Adjustments To Reconcile Net |   |                    |   |   |                   |   |   |              |   |   |         |   |   |           |  
|Loss To Net Cash Used By     |   |                    |   |   |                   |   |   |              |   |   |         |   |   |           |  
|Operating Activities         |   |                    |   |   |                   |   |   |              |   |   |         |   |   |           |  
|Change in accounts payable   |   | 36,759             |   |   | 52,115            |   |   | 115,158      |   |   | 75,292  |   |   | 265,559   |  
|                             |   | -                  |   |   | 72                |   |   | (45          | ) |   | (14,805 | ) |   | (66,325   | )
|                             |   |                    |   |   |                   |   |   |              |   |   |         |   |   |           |  
|Cash Flows From Investing    |   |                    |   |   |                   |   |   |              |   |   |         |   |   |           |  
|Activity                     |   |                    |   |   |                   |   |   |              |   |   |         |   |   |           |  
|Software development costs   |   | -                  |   |   | -                 |   |   | -            |   |   | -       |   |   | (8,675    | )
|                             |   |                    |   |   |                   |   |   |              |   |   |         |   |   |           |  
|Cash Flows From Financing    |   |                    |   |   |                   |   |   |              |   |   |         |   |   |           |  
|Activity                     |   |                    |   |   |                   |   |   |              |   |   |         |   |   |           |  
|Share capital                |   | -                  |   |   | -                 |   |   | -            |   |   | -       |   |   | 75,000    |  
|                             |   |                    |   |   |                   |   |   |              |   |   |         |   |   |           |  
|Increase (Decrease) In Cash  |   | -                  |   |   | 72                |   |   | (45          | ) |   | (14,805 | ) |   | -         |  
|                             |   |                    |   |   |                   |   |   |              |   |   |         |   |   |           |  
|Cash, Beginning Of Period    |   | -                  |   |   | -                 |   |   | 45           |   |   | 14,877  |   |   | -         |  
|                             |   |                    |   |   |                   |   |   |              |   |   |         |   |   |           |  
|Cash, End
      Of Period    | $ | -                  |   | $ | 72                |   | $ | -            |   | $ | 72      |   | $ | -         |  

F-4

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BALSAM VENTURES INC. (A Development Stage Company)

STATEMENT OF STOCKHOLDERS EQUITY

SEPTEMBER 30, 2003 (Unaudited) 
  (Stated in U.S. Dollars)

|                          | COMMON
      STOCK |  |   |        |  |   |            |   |   |               |  
|------------------------- | ------------------ |  | - | ------ |  | - | ---------- | - | - | ------------- | -
|                          |                    |  |   |        |  |   | ADDITIONAL |   |   | SHARE         |  
|                          |                    |  |   |        |  |   | PAID-IN    |   |   | SUBSCRIPTIONS |  
|                          | SHARES             |  |   | AMOUNT |  |   | CAPITAL    |   |   | RECEIVABLE    |  
|                          |                    |  |   |        |  |   |            |   |   |               |  
|Shares issued for cash at |                    |  |   |        |  |   |            |   |   |               |  
|$0.001                    | 5,000,000          |  | $ | 5,000  |  | $ | -          |   | $ | -             |  
|Shares issued for cash at |                    |  |   |        |  |   |            |   |   |               |  
|$0.01                     | 5,000,000          |  |   | 5,000  |  |   | 45,000     |   |   | -             |  
|Shares issued for cash at |                    |  |   |        |  |   |            |   |   |               |  
|$0.20                     | 100,000            |  |   | 100    |  |   | 19,900     |   |   | -             |  
|Subscriptions receivable  | -                  |  |   | -      |  |   | -          |   |   | (2,500        | )
|Net loss for the period   | -                  |  |   | -      |  |   | -          |   |   | -             |  
|                          |                    |  |   |        |  |   |            |   |   |               |  
|Balance, December 31,     |                    |  |   |        |  |   |            |   |   |               |  
|1999                      | 10,100,000         |  |   | 10,100 |  |   | 64,900     |   |   | (2,500        | )
|                          |                    |  |   |        |  |   |            |   |   |               |  
|Subscriptions receivable  | -                  |  |   | -      |  |   | -          |   |   | 2,500         |  
|Net loss for the year     | -                  |  |   | -      |  |   | -          |   |   | -             |  
|                          |                    |  |   |        |  |   |            |   |   |               |  
|Balance, December 31,     |                    |  |   |        |  |   |            |   |   |               |  
|2000                      | 10,100,000         |  |   | 10,100 |  |   | 64,900     |   |   | -             |  
|                          |                    |  |   |        |  |   |            |   |   |               |  
|Net loss for the year     | -                  |  |   | -      |  |   | -          |   |   | -             |  
|                          |                    |  |   |        |  |   |            |   |   |               |  
|Balance, December 31,     |                    |  |   |        |  |   |            |   |   |               |  
|2001                      | 10,100,000         |  |   | 10,100 |  |   | 64,900     |   |   | -             |  
|                          |                    |  |   |        |  |   |            |   |   |               |  
|Stock split (2 for 1)     | 10,100,000         |  |   | 10,100 |  |   | (10,100    | ) |   | -             |  
|Net loss for the year     | -                  |  |   | -      |  |   | -          |   |   | -             |  
|                          |                    |  |   |        |  |   |            |   |   |               |  
|Balance, December 31,     |                    |  |   |        |  |   |            |   |   |               |  
|2002                      | 20,200,000         |  |   | 20,200 |  |   | 54,800     |   |   | -             |  
|                          |                    |  |   |        |  |   |            |   |   |               |  
|Net loss for the period   | -                  |  |   | -      |  |   | -          |   |   | -             |  
|                          |                    |  |   |        |  |   |            |   |   |               |  
|Balance, September 30,    |                    |  |   |        |  |   |            |   |   |               |  
|2003                      | 20,200,000         |  | $ | 20,200 |  | $ | 54,800     |   | $ | -             |  

F-5

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BALSAM VENTURES INC. (A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2003 (Unaudited) 
  (Stated in U.S. Dollars)

|**1.** | BASIS OF PRESENTATION AND OPERATIONS
        Basis of Presentation
        The unaudited financial statements as of September 30, 2003 included
          herein have been prepared without audit pursuant to the rules and regulations
          of the Securities and Exchange Commission. Certain information and footnote
          disclosures normally included in financial statements prepared in accordance
          with United States generally accepted accounting principles have been
          condensed or omitted pursuant to such rules and regulations. In the
          opinion of management, all adjustments (consisting of normal recurring
          accruals) considered necessary for a fair presentation have been included.
          It is suggested that these financial statements be read in conjunction
          with the December 31, 2002 audited financial statements and notes thereto.
        Operations
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

F-6

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BALSAM VENTURES INC. (A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2003 (Unaudited) 
  (Stated in U.S. Dollars)

|1. | BASIS OF PRESENTATION AND OPERATIONS(Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|2. | SIGNIFICANT ACCOUNTING POLICIES
        The financial statements of the Company have been prepared in accordance
          with generally accepted accounting principles in the United States.
          Because a precise determination of many assets and liabilities is dependent
          upon future events, the preparation of financial statements for a period
          necessarily involves the use of estimates which have been made using
          careful judgement.
        The financial statements have, in managements opinion, been
          properly prepared within reasonable limits of materiality and within
          the framework of the significant accounting policies summarized below:
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

F-7

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BALSAM VENTURES INC. (A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2003 (Unaudited) 
  (Stated in U.S. Dollars)

|**2.** | SIGNIFICANT ACCOUNTING POLICIES(Continued)
|------ | ------------------------------------------
|       |                                           
|       | c)                                        
|       |                                           
|       | d)                                        
|       |                                           
|       | e)                                        
|       |                                           
|       |                                           
|       |                                           
|       |                                           

F-8

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BALSAM VENTURES INC. (A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2003 (Unaudited) 
  (Stated in U.S. Dollars)

|2. | SIGNIFICANT ACCOUNTING POLICIES(Continued)                                                                                                                                                                                                                                                                                                                         
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                    
|   | f)                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                    
|   | g)                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                    
|3. | LICENSE
        Pursuant to an exclusive license agreement, as amended, dated June
          5, 2002, the Company has acquired the exclusive worldwide license to
          use, commercialize and license the technology for self-chilling beverage
          containers. In consideration of the grant of the exclusive license,
          the Company agreed to:
|   |                                                                                                                                                                                                                                                                                                                                                                    
|   | a)                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                    
|   | b)                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                    
|   | c)                                                                                                                                                                                                                                                                                                                                                                 

F-9

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BALSAM VENTURES INC. (A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2003 (Unaudited) 
  (Stated in U.S. Dollars)

|3. | LICENSE(Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The royalties in respect of any fiscal year following
      the fiscal year ended June 30, 2004 shall not be less than $200,000 per
      year.                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|4. | RELATED PARTY TRANSACTIONS
        During the nine month period ended September 30, 2003, directors
          compensation totalled $54,000 (2002 - $Nil).
        Accounts payable includes $46,535 (2002 - $Nil) due to a director.                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|5. | CONTINGENCY
      As at September 30, 2003, the Company was in default
        under the terms of the amended license agreement described in Note 3.
        The Company is in receipt of an extension of the remedy period under the
        notice of default, and will have until November 30, 2003 to correct the
        default or the exclusive license will terminate.                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|6. | SUBSEQUENT EVENT
      Subsequent to September 30, 2003, the Company issued
        $260,000 of three year convertible notes bearing interest of 10% per annum.
        The notes are convertible into common shares at the lesser of $0.03 or
        50% of the average trading price of the Companys common shares for
        the ten trading days prior to conversion. The Company may, at its option,
        elect to pay a portion of the interest by issuing common shares.

F-10

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Item 2.     Management's Discussion and Analysis
  or Plan of Operations

FORWARD LOOKING STATEMENTS

The information in this discussion contains forward-looking
  statements within the meaning of Section 27A of the Securities Act of 1933,
  as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
  These forward-looking statements involve risks and uncertainties, including
  statements regarding the Company's capital needs, business strategy and expectations.
  Any statements contained herein that are not statements of historical facts
  may be deemed to be forward-looking statements. In some cases, you can identify
  forward-looking statements by terminology such as "may", "will", "should", "expect",
  "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential"
  or "continue", the negative of such terms or other comparable terminology. Actual
  events or results may differ materially. In evaluating these statements, you
  should consider various factors, including the risks described below, and, from
  time to time, in other reports the Company files with the SEC. These factors
  may cause the Company's actual results to differ materially from any forward-looking
  statement. The Company disclaims any obligation to publicly update these statements,
  or disclose any difference between its actual results and those reflected in
  these statements. The information constitutes forward-looking statements within
  the meaning of the Private Securities Litigation Reform Act of 1995.

OVERVIEW

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

In accordance with our original business plan, we developed
  a free Internet web site at "www.usacitizenship.net" to provide a reliable source
  of information on immigration into the United States. Our original business
  plan was to draw users to our web site so that we could sell and generate revenues
  from the sale of web site advertisements. We believed that an Internet web site
  which offers free information on the process of immigrating into the United
  States would attract substantial usage. We believed that if we were successful
  in attracting people to our web site, we would be able to generate revenues
  from advertisers who are interested in the demographics of our web site users.

We completed the development of our web site and it became
  operational. We did not achieve sales of advertising on our web site. We have
  not earned any revenue to date.

As discussed below, on June 6, 2002, we entered into an exclusive
  licensing agreement (the "License Agreement") with Cool Can Technologies, Inc.,
  ("Cool Can"). We ceased development of our web site business in order to concentrate
  on development of the technology licensed under the License Agreement and the
  web site is not currently operational. In the event that we are not successful
  in renegotiating the License Agreement as described below, we intend to focus
  on the web site business.

License of Cool Can Technology

On June 6, 2002, we entered into an exclusive licensing agreement
  which was amended on September 2, 2002 (the "License Agreement") with Cool Can
  Technologies, Inc., ("Cool Can") pursuant to which we were granted the exclusive
  worldwide right and license, for a period of 40 years, to enjoy, commercialize
  and exploit Cool Can's proprietary Instacool self-chilling beverage container
  technology (the "Technology"). The licensed rights include the right to manufacture,
  use

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and sell apparatus and products embodying the Technology and
  the right to grant sub-licenses of our right to manufacture, use and sell products
  embodying the Technology. The consideration we agreed to pay to Cool Can pursuant
  to the License Agreement is as follows:

| | 1. | we agreed to pay Cool Can a license fee of $200,000 by December
      2, 2002 (which sum has not been paid);                                                                                                                                                                                            
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                         
| | 2. | we agreed to expend $1,800,000 to develop and commercialize
      the Technology within 27 months of June 6, 2002; and                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                         
| | 3. | we agreed to pay ongoing royalties to
        Cool Can equal to 5% of gross profits from sales of products or 5% of
        gross licensing revenues subject to minimum royalty payments of $200,000
        per year in each of our fiscal years following the fiscal year ended June
        30, 2004.
| |    |                                                                                                                                                                                                                                                                                                         
| | 4. | we agreed to issue 300,000 shares of our common stock to
      Cool Can                                                                                                                                                                                                                                 

We are presently in default of the License Agreement because
  we have failed to pay the $200,000 license fee by December 2, 2002 and we have
  received a notice of default from Cool Can on March 10, 2003 which required
  us to remedy the default within 30 days (the "Default Period") or lose our rights
  under the license agreement. On June 5, 2003, we reached an agreement with Cool
  Can to extend the Default Period and on September 30, 2003, Cool Can agreed
  to further extend the Default Period. Accordingly, we now have until November
  30, 2003 to remedy the default or lose our rights under the License Agreement.
  We are currently in negotiations with Cool Can to obtain a new license agreement
  which will not require any substantial expenditure by us. We are confident that
  a new agreement will be negotiated prior to November 30, 2003.

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

PLAN OF OPERATIONS

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

| | (1) | We plan to defer proceeding with an advertising and
        marketing campaign for our web site in order to concentrate our efforts
        and financial resources on the InstaCool technology.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | (2) | We plan to seek sub-licensing
        agreements to finance approximately $300,000 to develop the InstaCool
        Technology. We plan to proceed with product development and production
        of samples of self-chilling beverage container modules. This phase of
        development will include the following elements and will take approximately
        nine months once financing is in place:
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | (a)                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | (b)                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | (c)                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                             
| | (3) | We anticipate spending approximately
        $20,000 on professional fees over the next twelve months in complying
        with our reporting obligations under the Securities Exchange Act of 1934.                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                             
| | (4) | We anticipate spending approximately
        $140,000 on general overhead expenses, including office expenses and consulting
        fees.                                                                                                                                                                                                                                                                  

Subject to obtaining financing, we anticipate that we will
  be spending approximately $460,000 over the next twelve-month period pursuing
  our stated plan of operations. Of these anticipated expenditures, we anticipate
  that $230,000 will be spent on our plan of operations over the next six months.
  Our present cash reserves are not sufficient for us to carry out our plan of
  operations without substantial additional financing. We are currently attempting
  to arrange for financing through sub-licensing that would enable us to proceed
  with our plan of operations. However, we do not have any financing arrangements
  in place and there is no assurance that we will be able to achieve the required
  financing. If we are not able to complete a financing to pay for the $200,000
  due under our License Agreement and Cool Can refuses to grant a further extension
  of the default period, then our License Agreement will terminate and we will
  lose all rights to the InstaCool Technology unless we are successful in negotiating
  a new license agreement. If we are successful in maintaining our license of
  the Cool Can technology, there is no assurance that we will be able to achieve
  sufficient financing that would be required to commercialize this technology
  and to earn revenues. We are presently in default of the License Agreement because
  we have failed to pay the $200,000 license fee by December 2, 2002. On September
  30, 2003, we reached an agreement with Cool Can to extend the Default Period.
  Accordingly, we now have until November 30, 2003 to remedy the default or lose
  our rights under the license agreement. In the event that we are not successful
  in maintaining the license, we intend to focus on the advertising and marketing
  campaign for our web site.

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

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Results of Operations

We did not earn any revenues during the quarter ended September
  30, 2003. We do not anticipate earning revenues until we successfully complete
  the development and commercialization of the InstaCool technology or we achieve
  sales of advertising on our immigration web site. We are presently in the development
  stage and we can provide no assurance that we will be successful in earning
  revenues from our immigration web site or from the InstaCool technology even
  if we achieve the financing to develop this technology.

We incurred expenses in the amount of $115,203 for the nine
  month period ended September 30, 2003, compared to $90,097 for the nine month
  period ended September 30, 2002. We incurred expenses in the amount of $36,759
  for the quarter ended September 30, 2003, compared to $52,043 for the same quarter
  in the previous year. The expenditures for the quarter and nine month period
  ended on September 30, 2003 are primarily attributable to the expenditure of
  significant consulting fees. These consulting services were incurred in connection
  with our efforts to raise the financing necessary to complete the $200,000 payment
  due to Cool Can under the License Agreement and to proceed with development
  of the Technology. We anticipate our operating costs will increase without any
  corresponding increase in revenues if we achieve the financing necessary to
  proceed with the development of the InstaCool technology.

We incurred a loss of $115,203 for the nine month period ended
  September 30, 2003, compared to a loss of $90,097 for the nine month period
  ended September 30, 2002. We incurred a loss of $36,759 for the quarter ended
  September 30, 2003, compared to a loss of $52,043 for the quarter ended September
  30, 2002. Our net loss was attributable entirely to our operating expenses.

Liquidity and Financial Condition

As of September 30, 2003, we had no cash, compared to cash
  of $45 on December 31, 2002. We had a working capital deficit of $265,559 as
  of September 30, 2003, compared to a working capital deficit of $150,356 as
  of December 31, 2002. The deficit of working capital is attributable primarily
  to our operating expenses, our inability to earn revenues, and an increase in
  our accounts payable.

Subsequent to September 30, 2003, we issued $260,000 of 10%
  convertible notes with the result that our working capital deficiency was reduced
  to $5,559. The notes bear interest at 10% per annum and are due on October 1,
  2006. The notes are convertible at any time into common shares at an exercise
  price equal to the lesser of $0.03 per share or 50% of the average trading price
  of our common stock for the 10-day period prior to conversion.

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

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ITEM 3.     CONTROLS AND PROCEDURES.

As required by Rule 13a-15 under the Securities Exchange Act
  of 1934 (the Exchange Act), we carried out an evaluation of the
  effectiveness of the design and operation of our disclosure controls and procedures
  as of September 30, 2003, being the date of our most recently completed fiscal
  quarter. This evaluation was carried out under the supervision and with the
  participation of our Chief Executive Officer, David Lam and Chief Financial
  Officer, John Boschert. Based upon that evaluation, our Chief Executive Officer
  and Chief Financial Officer concluded that our disclosure controls and procedures
  are effective in timely alerting management to material information relating
  to us required to be included in our periodic SEC filings. There have been no
  significant changes in our internal controls or in other factors that could
  significantly affect internal controls subsequent to the date we carried out
  our evaluation.

Disclosure controls and procedures are controls and other
  procedures that are designed to ensure that information required to be disclosed
  our reports filed or submitted under the Exchange Act is recorded, processed,
  summarized and reported, within the time periods specified in the Securities
  and Exchange Commission'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.

During our most recently completed fiscal quarter ended September
  30, 2003, there were no changes in our internal control over financial reporting
  that have materially affected, or are reasonably likely to affect, our internal
  control over financial reporting.

The term internal control over financial reporting
  is defined as a process designed by, or under the supervision of, the registrant's
  principal executive and principal financial officers, or persons performing
  similar functions, and effected by the registrant's board of directors, management
  and other personnel, to provide reasonable assurance regarding the reliability
  of financial reporting and the preparation of financial statements for external
  purposes in accordance with generally accepted accounting principles and includes
  those policies and procedures that:

| | (1) | Pertain to the maintenance of records
        that in reasonable detail accurately and fairly reflect the transactions
        and dispositions of the assets of the registrant;                                                                                                                                                                                                 
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                  
| | (2) | Provide reasonable assurance that transactions
        are recorded as necessary to permit preparation of financial statements
        in accordance with generally accepted accounting principles, and that
        receipts and expenditures of the registrant are being made only in accordance
        with authorizations of management and directors of the registrant; and
| |     |                                                                                                                                                                                                                                                                                                                                                                                  
| | (3) | Provide reasonable assurance regarding
        prevention or timely detection of unauthorized acquisition, use or disposition
        of the registrant's assets that could have a material effect on the financial
        statements.                                                                                                                                          

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PART II - OTHER INFORMATION

Item 1.     Legal Proceedings

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

Item 2.     Changes in Securities

We did not complete any unregistered sales of our common stock
  during our fiscal quarter ended September 30, 2003. Subsequent to the end of
  the fiscal quarter, we issued a total of $260,000 of 10% convertible notes due
  October 1, 2006. The convertible notes are convertible into shares of our common
  stock at the option of the holder on the basis of the lesser of $0.03 per share
  or 50% of our average trading price for the 10-day period prior to conversion.

Item 3.     Defaults upon Senior Securities

None.

Item 4.     Submission of Matters to a Vote of
  Security Holders

No matters were submitted to a vote of our security holders during our first quarter ended September 30, 2003.

Item 5.     Other Information

None.

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Item 6.     Exhibits and Reports on Form 8-K.

EXHIBITS

|Exhibit Number | Description of Exhibit                                                                                                                                 
|-------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------
|31.1           | Certification of Chief Executive Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002                                               
|31.2           | Certification of Chief Financial Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002                                               
|32.1           | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section
      1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|32.2           | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section
      1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

REPORTS ON FORM 8-K

We did not file any Current Reports on Form 8-K during the
  fiscal quarter ended September 30, 2003 and we have not filed any Current Reports
  on Form 8-K since September 30, 2003



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SIGNATURES

In accordance with the requirements of the Securities and
  Exchange Act of 1934, the Registrant has duly caused this report to be signed
  on its behalf by the undersigned, thereunto duly authorized.

|                        | BALSAM VENTURES, INC.
|----------------------- | ---------------------
|                        |                      
|Date: November 14, 2003 | By:                  
|                        |                      
|                        |                      
|                        |                      



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