<Page>

                          UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                      Washington, DC 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 June 30, 2001

[ ]  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 12, 5880 HAMPTON PLACE
VANCOUVER, BRITISH COLUMBIA,
CANADA                               V6T 2E9
-----------------------------        ----------
(Address of principal executive      (Zip Code)
offices)

Issuer's telephone number,
including area code:                 (604) 222-2657

                        NOT APPLICABLE
    -------------------------------------------------------
    (Former name, former address and former fiscal June 30,
                 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:
10,100,000 shares of common stock, $0.001 par value outstanding as
of August 10, 2001.

                                1
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              PART 1 - FINANCIAL INFORMATION

Item 1.    Financial Statements

The accompanying unaudited financial statements have been prepared
in accordance with the instructions to Form 10-QSB and Item 310 (b)
of Regulation S-B, 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, 2001 are not necessarily indicative of the results
that can be expected for the year ending December 31, 2001.

                                2
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                     BALSAM VENTURES INC.
                (A Development Stage Company)


                    FINANCIAL STATEMENTS


                       JUNE 30, 2001
                        (Unaudited)
                   (Stated in U.S Dollars)



                             3
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                   BALSAM VENTURES INC.
              (A Development Stage Company)

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

--------------------------------------------------------------------------
                                                     JUNE 30    DECEMBER 31
                                                       2001        2000
--------------------------------------------------------------------------
ASSETS

Current
  Cash                                              $ 31,388    $ 38,600

Software Development Costs                             3,000       3,000
                                                    ----------------------
                                                    $ 34,388    $ 41,600
==========================================================================

LIABILITIES

Current
  Accounts payable                                  $  3,597    $    868
                                                    ----------------------

SHAREHOLDER'S EQUITY

Share Capital
  Authorized:
    100,000,000 common shares, par value
     with $0.001 per share


  Issued and Outstanding:
    10,100,000 common shares                          10,100      10,100


  Additional paid in capital                          64,900      64,900

Deficit Accumulated During The Development Stage     (44,209)    (34,268)
                                                    ----------------------

                                                      30,791      40,732
                                                    ----------------------
                                                    $ 34,388    $ 41,600
==========================================================================

                                4
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                   BALSAM VENTURES INC.
              (A Development Stage Company)

              STATEMENT OF LOSS AND DEFICIT
                     (Unaudited)
              (Stated in U.S. Dollars)


-----------------------------------------------------------------------------
                             THREE     SIX      THREE    SIX       INCEPTION
                             MONTHS    MONTHS   MONTHS   MONTHS    AUGUST 17
                             ENDED     ENDED    ENDED    ENDED     1999 TO
                             JUNE 30   JUNE 30  JUNE 30  JUNE 30   JUNE 30
                             2001      2001     2000     2000      2001
-----------------------------------------------------------------------------

Expenses
  Consulting services       $     -   $     -   $     -   $     -   $   100
  Domain registration             -         -         -         -        70
  Professional fees           7,800     9,407     6,132    16,784    40,948
  Office and sundry             205       534        91       113     1,581
  Stock Transfer Services         -         -         -     1,065     1,510
                         ----------------------------------------------------
Net Loss For The Period       8,005     9,941     6,223    17,962   $44,209


Deficit Accumulated
  During The
  Development Stage,
  Beginning Of Period        36,204    34,268    14,665     2,926
                         ------------------------------------------

Deficit Accumulated
  During The
  Development Stage,
  End Of Period             $44,209   $44,209   $20,888   $20,888
===================================================================

Net Loss Per Share          $  0.01   $  0.01   $  0.01   $  0.01
===================================================================

Weighted Average
  Number Of Shares
  Outstanding            10,100,000 10,100,000 10,100,000 10,100,000
===================================================================

                                5
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                      BALSAM VENTURES INC.
                (A Development Stage Company)

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


-----------------------------------------------------------------------------
                             THREE     SIX      THREE    SIX       INCEPTION
                             MONTHS    MONTHS   MONTHS   MONTHS    AUGUST 17
                             ENDED     ENDED    ENDED    ENDED     1999 TO
                             JUNE 30   JUNE 30  JUNE 30  JUNE 30   JUNE 30
                             2001      2001     2000     2000      2001
-----------------------------------------------------------------------------
Cash Flows From Operating
 Activities
   Net loss for
   the period               $(8,005)  $(9,941)  $(6,223)  $(17,962) $(44,209)

Adjustments To Reconcile
   Net Loss To Net Cash
   Used By Operating
   Activities
    Change in accounts
    payable                   2,394     2,729     1,723     4,814     3,597
                            -----------------------------------------------
                             (5,611)   (7,212)   (4,500)  (13,148)  (40,612)
                            -----------------------------------------------
Cash Flows From Investing
 Activity
   Software development
   costs                          -         -    (2,000)   (3,000)   (3,000)
                            -----------------------------------------------
Cash Flow From Financing
 Activities
   Share capital                  -         -         -         -    75,000
   Subscriptions receivable       -         -         -     2,500         -
                            -----------------------------------------------
                                  -         -         -     2,500    75,000
                            -----------------------------------------------
Increase (Decrease) In Cash  (5,611)   (7,212)   (6,500)  (13,648)   31,388

Cash, Beginning Of Period    36,999    38,600    63,724    70,872         -
                            -----------------------------------------------
Cash, End Of Period         $31,388   $31,388   $57,224   $57,224   $31,388
===========================================================================
                                6
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                      BALSAM VENTURES INC.
               (A Development Stage Company)

             STATEMENT OF STOCKHOLDERS' EQUITY

                       JUNE 30, 2001
                        (Unaudited)
                 (Stated in U.S. Dollars)
            -------------------------------
                                 Additional  Share
                                 Paid-In     Subscriptions
             Shares    Amount    Capital     Receivable    Deficit    Total
          -------------------------------------------------------------------
Shares
 issued
 for cash
 at
 $0.001    5,000,000  $ 5,000   $       -    $       -    $       -   $ 5,000

Shares
 issued
 for cash
 at
 $0.01     5,000,000    5,000      45,000            -            -    50,000

Shares
 issued
 for cash
 at
 $0.20       100,000      100      19,900            -            -   20,000

Subscriptions
 receivable        -        -           -       (2,500)           -   (2,500)

Net loss
 for the
 period            -        -           -            -       (2,926)  (2,926)
          -------------------------------------------------------------------
Balance,
 December
 31,
 1999     10,100,000   10,100      64,900       (2,500)      (2,926)  69,574

Subscriptions
 receivable        -        -           -        2,500            -    2,500

Net loss
 for the
 period            -        -           -            -      (31,342) (31,342)
         --------------------------------------------------------------------

Balance,
 December
 31,
 2000     10,100,000   10,100     64,900             -      (34,268)  40,732

Net loss for the
period             -        -          -             -       (1,936)  (1,936)
         --------------------------------------------------------------------

Balance,
 March
 31,
 2001     10,100,000   10,100     64,900             -      (36,204)  38,796

Net loss
 for the
 period            -        -          -             -       (8,005)  (8,005)

         --------------------------------------------------------------------

Balance,
 June
 30,
 2001     10,100,000  $10,100    $64,900         $   -      $(44,209)$30,791
          ===================================================================
                                7
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                       BALSAM VENTURES INC.
                 (A Development Stage Company)

                 NOTES TO FINANCIAL STATEMENTS

                         JUNE 30, 2001
                         (Unaudited)
                   (Stated in U.S. Dollars)



1.  BASIS OF PRESENTATION

The unaudited financial statements as of June 30, 2001 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 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 December 31, 2000 audited financial
statements and notes thereto.


2.  NATURE OF OPERATIONS

 a) Organization

    The Company was incorporated in the State of Nevada, U.S.A.
    on August 17, 1999.

 b) Development Stage Activities

    The Company plans to launch a free information Website to
    assist and attract the people wanting information on immigration
    to the USA. The Company plans to use the Website to earn income
    from companies who are prepared to pay to have Web advertising in
    the form of a button or banners on the Website selling their products
    or services. The Company plans to solicit advertisers who are
    targeting sales of their products and services at people using the
    Company's website.


3.  SIGNIFICANT ACCOUNTING POLICIES

    The financial statements of the Company have been prepared in
    accordance with generally accepted accounting principles in the
    United States.  Because a precise determination of many assets
    and liabilities is dependent upon future events, the preparation
    of financial statements for a period necessarily involves the use
    of estimates which have been made using careful judgement.

    The financial statements have, in management's opinion, been properly
    prepared within reasonable limits of materiality and within the
    framework of the significant accounting policies summarized below:

                                8
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                      BALSAM VENTURES INC.
                 (A Development Stage Company)

                 NOTES TO FINANCIAL STATEMENTS

                        JUNE 30, 2001
                        (Unaudited)
                   (Stated in U.S. Dollars)



3.  SIGNIFICANT ACCOUNTING POLICIES (Continued)

 a) Development Stage Company

    The Company is a developed stage company as defined in the Statements
    of Financial Accounting Standards No. 7. The Company is devoting
    substantially all of its present efforts to establish a new business
    and none of its planned principal operations have commenced. All losses
    accumulated since inception have been considered as part of the Company's
    development stage activities.

 b) Use of Estimates

    The preparation of financial statements in conformity with generally
    accepted accounting principles requires management to make estimates
    and assumptions that affect the reported amounts 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 for the reporting period. Actual results could differ
    from these estimates.

 c) Software Development Costs

    Software development costs represent capitalized costs of
    design, configuration, coding, installation and testing of
    the Company's website up to its initial implementation.  Upon
    implementation the asset will be amortized to expense over its
    estimated useful life of three years using the straight line method.
    Ongoing website post-implementation costs of operation, including
    training and application maintenance, will be charged to expense as
    incurred.

 d) Income Taxes

    The Company has adopted Statement of Financial Accounting Standards
    No. 109 - "Accounting for Income Taxes" (SFAS 109). This standard
    requires the use of an asset and liability approach for financial
    accounting and reporting on income taxes. If it is more likely than
    not that some portion or all if a deferred tax asset will not be
    realized, a valuation allowance is recognized.

 e) Financial Instruments

    The Company's financial instruments consist of cash and
    accounts payable.

    Unless otherwise noted, it is management's opinion that this
    Company is not exposed to significant interest or credit risks arising
    from these financial instruments.  The fair value of these financial
    instruments approximate their carrying values, unless otherwise noted.

                                9
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                      BALSAM VENTURES INC.
                 (A Development Stage Company)

                 NOTES TO FINANCIAL STATEMENTS

                        JUNE 30, 2001
                         (Unaudited)
                  (Stated in U.S. Dollars)


3.  SIGNIFICANT ACCOUNTING POLICIES (Continued)

 f) Net Loss Per Share

    Net loss per share is calculated using the weighted average number
    of common shares outstanding during the period.  Fully diluted loss
    per share is not presented, as the impact of the exercise of options
    is anti-dilutive.

                                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 outlined in the Risk Factors section 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

Our business plan is to develop and market a free immigration
information service on the Internet from our
"www.usacitizenship.net" web site.  We will design our web site to
provide information on the process of immigrating to the United
States from foreign countries.  Our target users will be persons
who are citizens of foreign countries seeking to work in or
immigrate to the United States.  Our objective is to become a
leading web site for information on the process of immigrating into
the United States.

We acquired our "www.usacitizenship.net" domain name through the
domain name registration process in October 1999 at a cost of $70.
 The website is currently under development and is thus not
operational at this time.  Once development of our web site is
complete, we plan to sell advertising.  We plan to solicit
advertisers whose target market includes the users of our web site.

Our web site is still in a conceptual stage of development and will
require substantial development before we are able to operate it on
a commercial basis.  Accordingly, our business operations are in a
start-up phase and we have not earned any revenues to date.

PLAN OF OPERATIONS

Our plan of operations for the twelve months is to complete the
following objectives within the time period specified, subject to
our obtaining financing for the development and marketing of our
web site:

    (1)  Complete development of the web site.  We anticipate that
         this development will be completed by September 2001.  We
         anticipate that the cost of this development will be approximately
         $5,000.

    (2)  Complete research of information on immigration into the United
         States for posting on our web site.  We anticipate that this
         research will be completed by August 2001.

                                11
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         We anticipate that the costs of this development expense will be
         approximately $5,000.

    (3)  We plan to undertake an advertising and marketing campaign once
         the development of our web site is complete.  We anticipate that
         the cost of these marketing expenses will be approximately $10,000.

    (4)  We anticipate spending approximately $12,000 on ongoing operating
         and administrative expenses.  We anticipate that our monthly
         operating costs of our Web site will be approximately $1,000 per
         month.  We also anticipate spending approximately $500 per month
         on maintaining the accuracy of the immigration information on our
         web site.

RESULTS OF OPERATIONS

We did not earn any revenues during the period ending June 30, 2001.
We do not anticipate earning revenues until such time as the
development of our web site is completed and we commence sales of
advertising.  We are presently in the development stage and we can
provide no assurance that we will be successful in completing
development of our web site or earning revenues from our web site
once development is complete.

We incurred operating expenses in the amount of $9,941 for the six
months ended June 30, 2001, compared to operating expenses in the
amount of $17,962 for the six months ended June 30, 2000. These
operating expenses were comprised primarily of professional fees in
the amount of $9,407.  We also incurred office and sundry expenses
in the amount of $534 during this period.

We incurred a loss of $9,941 for the six months ended June 30, 2001.
Our net loss was attributable entirely to our operating expenses.

FINANCIAL CONDITION

Liquidity and Financial Condition

We had cash of $31,388 as of June 30, 2001 and had working capital
of $27,791 as of June 30, 2001.

Plan of Operations

We anticipate that we will be spending approximately $32,000 over
the next twelve month period pursuing our stated plan of
operations.  Of these anticipated expenditures, we anticipate that
$10,000 will be spent on our plan of operations in the next six
months.

We anticipate that our present cash reserves are sufficient for us
to carry out our plan of operations without additional financing
for approximately twelve months.  We anticipate that we may require
additional financing in order to pursue our business plan if: (a)
the costs of implementing our business plan are greater than
anticipated; or (b) we are unsuccessful in earning sufficient
revenues after commencement of operations in order to sustain
continued operations.  We anticipate that if we pursue any
additional financing, the financing would be an equity financing
achieved through the sale of our common stock.  We do not have any
arrangement in place for any debt or equity financing.  If we are
successful in completing an equity financing, existing shareholders
will experience dilution of their interest in our company.  In the
event we are not

                                12
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successful in obtaining such financing when necessary, we may not
be able to proceed with our business plan.

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.

We anticipate continuing operating losses in the foreseeable
future.  We base this expectation in part on the fact that we will
incur substantial operating expenses in completing our stated plan
of operations before we will have the opportunity to earn revenues.
 Our future financial results are also uncertain due to a number of
factors, many of which are outside our control. These factors
include, but are not limited to:

    (1)  our ability to develop a commercially marketable Internet
         web site with information and features sought by Internet
         users desiring information on immigration to the United
         States;
    (2)  our ability to successfully market our web site to our
         potential users;
    (3)  our ability to successfully market our web site to advertisers
         who are prepared to pay for advertising on our site;
    (4)  the introduction of competing web sites and services.

RISK FACTORS

An investment in our common stock involves a high degree of risk.
You should carefully consider the risks described below and the
other information in this Form 10-QSB and any other filings we may
make with the United States Securities and Exchange Commission in
the future before investing in our common stock. If any of the
following risks occur, or if others occur, our business, operating
results and financial condition could be seriously harmed. The
trading price of our common stock could decline due to any of these
risks, and you may lose all or part of your investment.

If We Are Not Successful in Earning Revenues or If Our Development
and Marketing Costs Are Greater Than Anticipated, We Will Require
Additional Financing Which May Not Be Available To Us
------------------------------------------------------------------
We had cash in the amount of $31,388 as of June 30, 2001.  Our
business plan calls for significant expenses in connection with the
development and marketing of our web site.  In addition, we
anticipate that revenues from operations will not be realized until
sometime after the development of our web site is complete.  While
we have sufficient cash to complete our business plan over the next
twelve months, we may require additional financing in order to
complete development and marketing of our business if the costs of
the development and marketing of our web site are greater than
anticipated.  In addition, we may require additional financing to
sustain our business operations if we are not successful in earning
revenues once development and marketing of our web site is
complete.  We do not currently have any arrangements for financing
and we can provide no assurance to investors that we will be able
to find such financing if required.  Obtaining additional financing
would be subject to a number of factors, including market
conditions, investor acceptance of our business plan, and investor
sentiment.  These factors may make the timing, amount, terms or
conditions of additional financing unavailable to us.

                                13
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Because We Have Only Recently Commenced Business Operations, We
Face A High Risk of Business Failure
----------------------------------------------------------------
We were incorporated in August 1999. We acquired our domain name
for our web site in October 1999.  We are presently in the process
of starting development of our web site.  We have not yet earned
any revenues.  Accordingly, we have no operating history for
investors to evaluate our business. An investor should consider
the risks, expenses and uncertainties that an early stage
company like ours faces. These risks include our ability to:

    (1)  develop a functioning and marketable web site focused on United
         States immigration information;
    (2)  attract users to our web site once development is complete;
    (3)  successfully market our web site to advertisers once development
         is complete;
    (4)  respond effectively to competitive pressures;
    (5)  continue to develop and upgrade our web site once development
         is complete.

If we are unsuccessful in addressing these risks, our business will
most likely fail.
-------------------------------------------------------------------
Because We Have Only Recently Commenced Business Operations, We
Expect to Incur Operating Losses For The Foreseeable Future

We have never been profitable. As of June 30, 2001, we had an
accumulated deficit of approximately $44,209. Prior to completion
of our web site, we anticipate that we will incur increased
operating expenses without realizing any revenues.  We therefore
expect to incur significant losses into the foreseeable future and
recognize that if we are unable to generate significant revenues
from the sale of advertising on our web site, we will not be able
to achieve profitability or continue operations.

If The Internet Is Not Widely Accepted As A Medium For Advertising
And Commerce, Our Business May Fail
------------------------------------------------------------------
We expect to derive the majority of our revenue from Internet
advertising.  Internet advertising constitutes a new and rapidly
evolving market.  If the Internet is not accepted as a medium for
advertising, then we may not be able to generate revenues and our
business may fail.

If The Audience Targeted By Our Web Site Does Not Prove Desirable
To Potential Advertisers, Our Business May Fail
------------------------------------------------------------------
Companies may choose not to advertise on our web site if they
perceive that our audience demographic is not desirable for their
products or that advertising on our web site is not effective for
their sales.  Factors which will affect our ability to attract
advertisers include our ability to develop a desirable audience
demographic for our web site, the attractiveness of our audience
demographic to web site advertisers and the presence of alternative
web sites that offer competition to advertising on our web site.
If we are not successful in entering into agreements with
advertisers for advertising on our web site, then we may not be
able to generate revenues and our business may fail.

If We Are Unable To Develop A Marketable Web Site, Then Our
Business Will Fail
-----------------------------------------------------------------
Our web site is in its development stage.  If we are unable to
develop an operating web site that is capable of attracting users
and convincing advertisers to pay for advertising, then we will not
be

                                14
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able to generate revenues.  If we fail to earn revenues which
exceed our operating costs upon the completion and subsequent
marketing of our web site, our business will most likely fail.

If We Are Unable To Hire And Retain Key Personnel, We May Not Be
Able To Implement Our Business Plan And Our Business Will Fail
-------------------------------------------------------------------
Our success will be largely dependent on our ability to hire highly
qualified computer programmers, sales and technical personnel who
can develop the web site. These individuals are in high demand and
we may not be able to attract the staff we need.  In addition, we
may not be able to afford the high salaries and fees demanded by
qualified personnel, or may lose such employees after they are
hired.  Currently, we have not hired any key personnel.  Our
failure to hire key personnel when needed would have a significant
negative effect on our business.

If We Are Not Able To Effectively Respond To Competitors, Our
Business May Fail
-------------------------------------------------------------------
There are other companies who provide information similar to what
we propose to offer on our proposed web site. Competition for
customers is likely to be intense and is expected to increase
significantly in the future because of the growth of the Internet.
Increased competition could result in:

  (1)  lower than projected usage of our web site;
  (2)  our inability to attract advertisers who are prepared to
       pay for advertising;
  (3)  decreased advertising rates that advertisers are prepared to pay;
  (4)  our inability to develop a web site with features and usability
       sought by potential customers.

Any one of these results could adversely affect our business,
financial condition and results of operations. In addition, our
competitors may develop competing web sites or traditional media
products that achieve greater market acceptance. It is also
possible that new competitors may emerge and acquire significant
market share. Our inability to achieve sales and revenue due to
competition will have an adverse effect on our business, financial
condition and results of operations.

If the Legal and Regulatory Environment of the Internet Changes,
then the Growth of the Internet Could be Significantly Slowed and
Our Business Will Be Negatively Effected
--------------------------------------------------------------------
To date, governmental regulations have not materially restricted
use of the Internet. However, the legal and regulatory environment
that pertains to the Internet is uncertain and may change.
Uncertainty and new regulations could increase our costs of doing
business and prevent us from operating or marketing our web site.
The growth of the Internet may also be significantly slowed. This
could delay growth in potential demand for our web site information
and limit our ability to generate revenues. In addition to new laws
and regulations being adopted, existing laws which could impede
growth of usage of the Internet may be applied to the Internet that
have not as yet been applied. New and existing laws may cover
issues that include:

  (1)  sales and other taxes;
  (2)  user privacy;
  (3)  pricing controls;
  (4)  characteristics and quality of products and services;
  (5)  consumer protection;
  (6)  cross-border commerce;
  (7)  libel and defamation;
                                  15
<Page>

  (8)  copyright, trademark and patent infringement; and
  (9)  other claims based on the nature and content of Internet materials.

These new laws may impede the growth in usage of the Internet.  If
the growth of the Internet and usage of the Internet is slowed,
then our ability to generate advertising revenues may be adversely
impacted with the result that our financial condition will be
harmed.

If We Are Required To Qualify To Do Business In Multiple
Jurisdictions, Our Business May Be Harmed
-------------------------------------------------------------------
Because we may sell advertising for our web site in a number of
states and foreign countries, we may be subject to the laws and the
court systems of multiple jurisdictions. Such jurisdictions may
claim that we are required to qualify to do business as a foreign
company. This process of qualifying to do business can be costly
and time consuming and will generally have a negative effect on our
ability to show a profit from operations.  Failure to qualify as a
foreign company in a jurisdiction where required to do so could
subject us to taxes and penalties.

Because We Will Provide Information To Users on Our Site, We May Be
Subject To Legal Claims Based On Inaccurate Information
-------------------------------------------------------------------
If we are successful in developing and marketing our web site, we
may become subject to claims from our users based on allegations of
inaccurate or incomplete information regarding the immigration
process.  Users who have relied on the immigration information on
our website may claim that the information is inaccurate or
incomplete and then may claim damages and commence legal actions
against us to enforce their claims.   Although we plan to carry
general liability insurance when we commence marketing our web
site, our insurance may not cover all potential claims to which we
are exposed or may not be adequate to indemnify us for all
liability. Any imposition of liability that is not covered by
insurance or is in excess of insurance coverage could have an
adverse effect on our business, financial condition and results of
operations. In addition, we can provide no assurance that we will
be able to obtain general liability insurance coverage for our
business.

Because our President, Mr. Robert Smith, Owns 49.5% Of Our
Outstanding Common Stock, Investors May Find That Future Corporate
Decisions Are Controlled By Mr. Smith Who May Use This Control to
Advance his Own Interests at the Expense of Other Stockholders.
------------------------------------------------------------------
Mr. Robert S. Smith, our sole director and President, owns
approximately 49.5% of the outstanding shares of our common stock.
Accordingly, he will have a significant influence in determining
the outcome of all corporate transactions or other matters,
including mergers, consolidations and the sale of all or
substantially all of our assets, and also the power to prevent or
cause a change in control. The interests of Mr. Smith may differ
from the interests of the other stockholders.  Factors which could
cause the interests of Mr. Smith to differ from the interest of
other stockholders include the impact of a corporate transaction on
the business time required to be devoted by Mr. Smith to our
business and the ability of Mr. Smith to continue to manage our
business in the absence of the anticipated corporate transaction.

Mr. Smith presently works up to fifteen days a month as a
professional airline pilot.  While Mr. Smith presently possesses
adequate time every month to attend to the interests of Balsam, it
is possible that the demands of Mr. Smith's principal employment as
a pilot could increase with the result that he would no longer be
able to devote sufficient time to the management of our business.
In addition, Mr. Smith may not possess sufficient time for devotion
to our business if the demands of managing our business increase
substantially beyond current levels.  Competing demands on Mr.

                                16
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Smith's business time may cause Mr. Smith to have differing
interests in approving significant corporate transactions than
other stockholders.

If A Market For Our Common Stock Does Develop, Our Stock Price May
Be Volatile.
--------------------------------------------------------------------
There is currently no market for our common stock and we can
provide no assurance that a market will develop.  If a market
develops, we anticipate that the market price of our common stock
will be subject to wide fluctuations in response to several
factors, including:

  (1)  actual or anticipated variations in our results of operations;
  (2)  our ability or inability to generate new revenues;
  (3)  increased competition; and
  (4)  conditions and trends in the Internet and electronic commerce
       industries.

Further, if our common stock is traded on the Nasdaq over the
counter bulletin board, our stock price may be impacted by factors
that are unrelated or disproportionate to our operating
performance.   The trading prices of many technology companies'
stocks are at or near historical highs and reflect price earnings
ratios substantially above historical levels.  These market
fluctuations, as well as general economic, political and market
conditions, such as recessions, interest rates or international
currency fluctuations may adversely affect the market price of our
common stock.

We can provide no assurance that our common stock will be traded on
the Bulletin Board.

If Our Stock Price Drops Significantly, We May Become Subject To
Securities Litigation That Would Result In A Harmful Diversion Of
Our Resources
-------------------------------------------------------------------
In the past, following periods of volatility in the market price of
a particular company's stock, securities class action litigation
has been brought against that company. Any litigation arising from
the volatility in the price of our common stock could have a
adverse effect upon our business, financial condition and results
of operations.

                                17
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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

    None

Item 2. Changes in Securities

    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 and Reports on Form 8-K.

EXHIBITS

    None

REPORTS ON FORM 8-K

    None


                                18
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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
authorised.

BALSAM VENTURES, INC.

Date:       August 10, 2001

		/s/ Robert Smith
By:        -----------------------------------------------
           ROBERT SMITH, President, Secretary and Treasurer