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**UNITED STATES
  SECURITIES AND EXCHANGE COMMISSION**
  Washington, D.C. 20549

FORM 10-QSB

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

For the quarterly period ended March 31, 2005

 ̈ Transition Report
  Under Section 13 Or 15(d) Of The Securities Exchange Act Of 1934
  For the transition period ________ to ________

COMMISSION FILE NUMBER000-32011

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

|NEVADA                                           | 52-2219056                          
|------------------------------------------------ | ------------------------------------
|(State or other jurisdiction of incorporation or | (I.R.S. Employer Identification No.)
|organization)                                    |                                     

|SUITE 200,  20 EAST FOOTHILL BOULEVARD   |           
|---------------------------------------- | ----------
|ARCADIA, CALIFORNIA                      | 91006     
|(Address of principal executive offices) | (Zip Code)

(626) 574-2911 Issuer's telephone number

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

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

State the number of shares outstanding of each of the issuer's
  classes of common equity, as of the latest practicable date: As of May 13,
  2005, the Registrant had 25,500,000 shares of common stock, $0.001 par value
  per share, outstanding.

Transitional Small Business Disclosure Format (check one):
   Yes  ̈ Nox

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PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

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BALSAM VENTURES, INC.(A Development Stage Company)

FINANCIAL STATEMENTS(Stated in U.S. Dollars)

MARCH 31, 2005 
  (Unaudited)

F-1

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BALSAM VENTURES, INC.(A Development Stage Company)

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

|                                                             |   | MARCH 31 |   |   | DECEMBER 31 |  
|------------------------------------------------------------ | - | -------- | - | - | ----------- | -
|                                                             |   | 2005     |   |   | 2004        |  
|ASSETS                                                       |   |          |   |   |             |  
|                                                             |   |          |   |   |             |  
|Current                                                      |   |          |   |   |             |  
|Cash                                                         | $ | 1,141    |   | $ | 1,033       |  
|                                                             |   |          |   |   |             |  
|LIABILITIES                                                  |   |          |   |   |             |  
|                                                             |   |          |   |   |             |  
|Current                                                      |   |          |   |   |             |  
|Accounts payable and accrued liabilities                     | $ | 186,592  |   | $ | 159,117     |  
|                                                             |   |          |   |   |             |  
|Convertible Notes Payable Net Of Discount On Notes           |   |          |   |   |             |  
|Attributable To Beneficial Conversion Feature(Note 4)        |   | 51       |   |   | -           |  
|                                                             |   | 186,643  |   |   | 159,117     |  
|Commitment And Contingencies(Notes 2 and 5)                  |   |          |   |   |             |  
|                                                             |   |          |   |   |             |  
|STOCKHOLDERS’ DEFICIENCY                                     |   |          |   |   |             |  
|                                                             |   |          |   |   |             |  
|Share Capital                                                |   |          |   |   |             |  
|Authorized:                                                  |   |          |   |   |             |  
|100,000,000 common voting
      stock, par value with $0.001 |   |          |   |   |             |  
|per share                                                    |   |          |   |   |             |  
|                                                             |   |          |   |   |             |  
|Issued and outstanding:                                      |   |          |   |   |             |  
|25,500,000 common stock                                      |   | 25,500   |   |   | 25,500      |  
|                                                             |   |          |   |   |             |  
|Additional paid-in capital                                   |   | 572,500  |   |   | 572,500     |  
|                                                             |   |          |   |   |             |  
|Deficit Accumulated During The Development
      Stage       |   | (783,502 | ) |   | (756,084    | )
|                                                             |   |          |   |   |             |  
|                                                             |   | (185,502 | ) |   | (158,084    | )
|                                                             |   |          |   |   |             |  
|                                                             | $ | 1,141    |   | $ | 1,033       |  

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

F-2

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BALSAM VENTURES, INC.(A Development Stage Company)

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

|                                            |   |                    |   |   |                  |   |   | Cumulative  |  
|------------------------------------------- | - | ------------------ | - | - | ---------------- | - | - | ----------- | -
|                                            |   |                    |   |   |                  |   |   | Period from |  
|                                            |   |                    |   |   |                  |   |   | August 17,  |  
|                                            |   | THREE MONTHS ENDED |   |   | 1999 (inception) |  
|                                            |   | MARCH 31           |   |   | to March 31      |  
|                                            |   | 2005               |   |   | 2004             |   |   | 2005        |  
|                                           
|Revenue                                     | $ | -                  |   | $ | -                |   | $ | -           |  
|                                           
|Expenses                                    |   |                    |   |   |                  |   |   |             |  
|Consulting services                         |   | 15,000             |   |   | 15,000           |   |   | 300,947     |  
|Domain registration                         |   | -                  |   |   | -                |   |   | 436         |  
|Professional fees                           |   | 5,933              |   |   | 2,425            |   |   | 137,834     |  
|Interest and bank charges                   |   | 6,446              |   |   | 6,475            |   |   | 39,901      |  
|Office and sundry                           |   | -                  |   |   | 103              |   |   | 9,406       |  
|Foreign exchange (gain) loss                |   | (12                | ) |   | 532              |   |   | (12         | )
|Regulatory                                  |   | -                  |   |   | 40               |   |   | 8,760       |  
|Stock transfer services                     |   | -                  |   |   | -                |   |   | 5,405       |  
|Accretion of discount on convertible        |   |                    |   |   |                  |   |   |             |  
|notes                                       |   | 51                 |   |   | -                |   |   | 51          |  
|Write off of software development costs     |   | -                  |   |   | -                |   |   | 8,675       |  
|Travel                                      |   | -                  |   |   | -                |   |   | 9,099       |  
|License agreement and extension
      costs |   | -                  |   |   | -                |   |   | 263,000     |  
|                                           
|Net loss for the period                     | $ | 27,418             |   | $ | 24,575           |   | $ | 783,502     |  
|                                           
|Net loss per share, basic                   |   |                    |   |   |                  |   |   |             |  
|and diluted                                 | $ | (0.01              | ) | $ | (0.01            | ) |   |             |  
|                                           
|Weighted average                            |   |                    |   |   |                  |   |   |             |  
|number of shares                            |   |                    |   |   |                  |   |   |             |  
|outstanding                                 |   | 25,500,000         |   |   | 20,500,000       |   |   |             |  

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

F-3

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BALSAM VENTURES, INC.(A Development Stage Company)

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

|                                                    |   |                    |   |   |                  |   |   | Cumulative  |  
|--------------------------------------------------- | - | ------------------ | - | - | ---------------- | - | - | ----------- | -
|                                                    |   |                    |   |   |                  |   |   | Period from |  
|                                                    |   |                    |   |   |                  |   |   | August 17,  |  
|                                                    |   | THREE MONTHS ENDED |   |   | 1999 (inception) |  
|                                                    |   | MARCH 31           |   |   | to March 31      |  
|                                                    |   | 2005               |   |   | 2004             |   |   | 2005        |  
|                                                   
|Cash provided by (used in):                         |   |                    |   |   |                  |   |   |             |  
|Operating Activities                                |   |                    |   |   |                  |   |   |             |  
|Net loss for the period                             | $ | (27,418            | ) | $ | (24,575          | ) | $ | (783,502    | )
|Items not involving cash:                           |   |                    |   |   |                  |   |   |             |  
|Write
      off of software development costs       |   |                    |   |   |                  |   |   | 8,675       |  
|License
      agreement and extension costs         |   | -                  |   |   | -                |   |   | 263,000     |  
|Interest
      accrued on convertible notes         |   |                    |   |   |                  |   |   |             |  
|Payable                                             |   | 6,411              |   |   | 6,500            |   |   | 38,947      |  
|                                                    |   | (21,007            | ) |   | (18,075          | ) |   | (472,880    | )
|Changes in non-cash operating
      working capital |   |                    |   |   |                  |   |   |             |  
|items:                                              |   |                    |   |   |                  |   |   |             |  
|Change in
      accounts payable and accrued        |   |                    |   |   |                  |   |   |             |  
|Liabilities                                         |   | 21,064             |   |   | 18,043           |   |   | 407,645     |  
|Accretion
      of discount on convertible          |   |                    |   |   |                  |   |   |             |  
|debentures                                          |   | 51                 |   |   | -                |   |   | 51          |  
|                                                   
|                                                    |   | 108                |   |   | (32              | ) |   | (65,184     | )
|                                                   
|Investing Activity                                  |   |                    |   |   |                  |   |   |             |  
|Software development
      costs                    |   | -                  |   |   | -                |   |   | (8,675      | )
|                                                   
|Financing Activity                                  |   |                    |   |   |                  |   |   |             |  
|Issuance
      of common stock                      |   | -                  |   |   | -                |   |   | 75,000      |  
|                                                   
|Increase (Decrease) In Cash                         |   | 108                |   |   | (32              | ) |   | 1,141       |  
|                                                   
|Cash, Beginning Of Period                           |   | 1,033              |   |   | 23               |   |   | -           |  
|                                                   
|Cash, End Of Period                                 | $ | 1,141              |   | $ | (9               | ) | $ | 1,141       |  
|                                                   
|Supplemental disclosure of cash flow information:   |   |                    |   |   |                  |   |   |             |  
|Cash paid during the period for:                    |   |                    |   |   |                  |   |   |             |  
|Interest                                            | $ | 35                 |   | $ | 147              |   | $ | 954         |  
|Income
      taxes                                  |   | -                  |   |   | -                |   |   | -           |  

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

F-4

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BALSAM VENTURES, INC.(A Development Stage Company)

STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIENCY)

PERIOD FROM AUGUST 17, 1999 (INCEPTION) TO MARCH 31, 2005(Unaudited)
  (Stated in U.S. Dollars)

|                               |            |  |   |              |  |   |            |   |   |              |   |   | Deficit     |   |   |          |  
|------------------------------ | ---------- |  | - | ------------ |  | - | ---------- | - | - | ------------ | - | - | ----------- | - | - | -------- | -
|                               |            |  |   | Common Stock |  |   |            |   |   | Accumulated  |   |   |             |  
|                               |            |  |   |              |  |   | Additional |   |   | Share        |   |   | During the  |   |   |          |  
|                               |            |  |   |              |  |   | Paid-in    |   |   | Subscription |   |   | Development |   |   |          |  
|                               | Shares     |  |   | Par Value    |  |   | Capital    |   |   | Receivable   |   |   | Stage       |   |   | Total    |  
|Stock issued for cash at       |            |  |   |              |  |   |            |   |   |              |   |   |             |   |   |          |  
|$0.0005                        | 10,000,000 |  | $ | 10,000       |  | $ | (5,000     | ) | $ | -            |   | $ | -           |   | $ | 5,000    |  
|Stock issued for cash at       |            |  |   |              |  |   |            |   |   |              |   |   |             |   |   |          |  
|$0.005                         | 10,000,000 |  |   | 10,000       |  |   | 40,000     |   |   | -            |   |   | -           |   |   | 50,000   |  
|Stock issued for cash at       |            |  |   |              |  |   |            |   |   |              |   |   |             |   |   |          |  
|$0.10                          | 200,000    |  |   | 200          |  |   | 19,800     |   |   | -            |   |   | -           |   |   | 20,000   |  
|Subscriptions receivable       | -          |  |   | -            |  |   | -          |   |   | (2,500       | ) |   | -           |   |   | (2,500   | )
|Net loss for
      the period  | -          |  |   | -            |  |   | -          |   |   | -            |   |   | (2,926      | ) |   | (2,926   | )
|                              
|Balance, December 31,          |            |  |   |              |  |   |            |   |   |              |   |   |             |   |   |          |  
|1999                           | 20,200,000 |  |   | 20,200       |  |   | 54,800     |   |   | (2,500       | ) |   | (2,926      | ) |   | 69,574   |  
|                              
|Subscriptions received         | -          |  |   | -            |  |   | -          |   |   | 2,500        |   |   | -           |   |   | 2,500    |  
|Net loss for
      the year    | -          |  |   | -            |  |   | -          |   |   | -            |   |   | (31,342     | ) |   | (31,342  | )
|                              
|Balance, December 31,          |            |  |   |              |  |   |            |   |   |              |   |   |             |   |   |          |  
|2000                           | 20,200,000 |  |   | 20,200       |  |   | 54,800     |   |   | -            |   |   | (34,268     | ) |   | 40,732   |  
|                              
|Net loss for
      the year    | -          |  |   | -            |  |   | -          |   |   | -            |   |   | (18,989     | ) |   | (18,989  | )
|                              
|Balance, December 31,          |            |  |   |              |  |   |            |   |   |              |   |   |             |   |   |          |  
|2001                           | 20,200,000 |  |   | 20,200       |  |   | 54,800     |   |   | -            |   |   | (53,257     | ) |   | 21,743   |  
|                              
|Net loss for
      the year    | -          |  |   | -            |  |   | -          |   |   | -            |   |   | (163,424    | ) |   | (163,424 | )
|                              
|Balance, December 31,          |            |  |   |              |  |   |            |   |   |              |   |   |             |   |   |          |  
|2002                           | 20,200,000 |  |   | 20,200       |  |   | 54,800     |   |   | -            |   |   | (216,681    | ) |   | (141,681 | )
|                              
|Beneficial conversion          |            |  |   |              |  |   |            |   |   |              |   |   |             |   |   |          |  
|feature of convertible         |            |  |   |              |  |   |            |   |   |              |   |   |             |   |   |          |  
|notes                          | -          |  |   | -            |  |   | 260,000    |   |   | -            |   |   | -           |   |   | 260,000  |  
|                              
|Stock issued for license       |            |  |   |              |  |   |            |   |   |              |   |   |             |   |   |          |  
|extension payment at           |            |  |   |              |  |   |            |   |   |              |   |   |             |   |   |          |  
|$0.21                          | 300,000    |  |   | 300          |  |   | 62,700     |   |   | -            |   |   | -           |   |   | 63,000   |  
|Net loss for
      the year    | -          |  |   | -            |  |   | -          |   |   | -            |   |   | (232,416    | ) |   | (232,416 | )
|                              
|Balance, December 31,          |            |  |   |              |  |   |            |   |   |              |   |   |             |   |   |          |  
|2003                           | 20,500,000 |  |   | 20,500       |  |   | 377,500    |   |   | -            |   |   | (449,097    | ) |   | (51,097  | )
|                              
|Stock issued for license at    |            |  |   |              |  |   |            |   |   |              |   |   |             |   |   |          |  
|$0.04                          | 5,000,000  |  |   | 5,000        |  |   | 195,000    |   |   | -            |   |   | -           |   |   | 200,000  |  
|Net loss for
      the year    | -          |  |   | -            |  |   | -          |   |   | -            |   |   | (306,987    | ) |   | (306,987 | )
|                              
|Balance, December 31,          |            |  |   |              |  |   |            |   |   |              |   |   |             |   |   |          |  
|2004                           | 25,500,000 |  |   | 25,500       |  |   | 572,500    |   |   | -            |   |   | (756,084    | ) |   |          |  
|                               |            |  |   |              |  |   |            |   |   |              |   |   |             |   |   | (158,084 | )
|                              
|Net loss for
      the quarter | -          |  |   | -            |  |   | -          |   |   | -            |   |   | (27,418     | ) |   | (27,418  | )
|                              
|Balance, March
      31, 2005  | 25,500,000 |  | $ | 25,500       |  | $ | 572,500    |   | $ | -            |   | $ | (783,502    | ) | $ | (185,502 | )

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

F-5

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BALSAM VENTURES, INC. (A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2005
  (Unaudited)
  (Stated in U.S. Dollars)

|1. | BASIS OF PRESENTATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | The unaudited financial information furnished
        herein reflects all adjustments, which in the opinion of management are
        necessary to fairly state the Company’s financial position and the
        results of its operations for the periods presented. This report on Form
        10-Q should be read in conjunction with the Company’s financial
        statements and notes thereto included in the Company’s Form 10-K
        for the fiscal year ended December 31, 2004. The Company assumes that
        the users of the interim financial information herein have read or have
        access to the audited financial statements for the preceding fiscal year
        and that the adequacy of additional disclosure needed for a fair presentation
        may be determined in that context. Accordingly, footnote disclosure, which
        would substantially duplicate the disclosure contained in the Company’s
        Form 10-K for the fiscal year ended December 31, 2004, has been omitted.
        The results of operations for the three-month period ended March 31, 2005
        are not necessarily indicative of results for the entire year ending December
        31, 2005.
|  
|2. | NATURE OF BUSINESS AND ABILITY TO CONTINUE OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|  
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|  
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

F-6

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BALSAM VENTURES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2005
  (Unaudited)
  (Stated in U.S. Dollars)

|2. | NATURE OF BUSINESS AND ABILITY TO CONTINUE OPERATIONS(Continued)                                                                                                                                                                                                                                                                                                                                                                 
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                               
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  
|3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                       
|  
|   | The financial statements of the Company
        have been prepared in accordance with generally accepted accounting principles
        in the United States. 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.                                                                                                                                                                                                                                                                                                    
|  
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                               
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                               
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                               
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                  

F-7

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BALSAM VENTURES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2005
  (Unaudited)
  (Stated in U.S. Dollars)

|4. | CONVERTIBLE NOTES PAYABLE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | During the year ended December 2003, the Company
        issued convertible notes, maturing October 1, 2006, aggregating $260,000
        and bearing interest of 10% per annum. The notes are convertible into
        common shares at the lesser of $0.03 per share 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 stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  
|   | Emerging Issues Task Force Release No. 98-5 and
        00-27 state that any embedded beneficial conversion features present in
        convertible securities should be valued separately at issuance. The embedded
        beneficial conversion feature should be recognized and measured by allocating
        a portion of the proceeds equal to the intrinsic value of that feature
        to additional paid-in capital. That amount should be calculated at the
        commitment date as the difference between the effective conversion price
        and the fair value of the common stock or other securities into which
        the security is convertible, multiplied by the number of shares into which
        the security is convertible. The Emerging Issues Task Force observed that
        in certain circumstances, the intrinsic value of the beneficial conversion
        feature may be greater than the proceeds allocated to the convertible
        instrument. In those situations, the amount of the discount assigned to
        the beneficial conversion feature is limited to the amount of the proceeds
        allocated to the convertible instrument. For convertible instruments that
        have a stated redemption date (such as term debt) the discount resulting
        from recording a beneficial conversion option should be accreted from
        the date of issuance to the stated redemption date of the convertible
        instrument. In the event of early conversion or default, the remaining
        discount would be recognized as interest expense during the period in
        which such early conversion or default occurs.
|  
|   | In applying the provisions of Emerging Issues Task
        Force Release Nos. 98-5 and 00-27, the Company recorded a discount on
        the convertible debentures in the amount of $260,000. This discount
        is being accreted to interest expense using the interest method over the
        life of the notes (three years). As the effective interest rate, which
        is determined by dividing the actual interest rate on the convertible
        debentures by the discounted debt amount, approaches infinity, the interest
        expense to be recorded approximates the future cash payments. Interest
        expense recorded related to the accretion of the discount for the quarter
        ended March 31, 2005 was $51 (2004 - $Nil). The remaining discount
        on the convertible debentures as of March 31, 2005 was $259,949 (2004
        - $260,000).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   | Interest of $38,947 on these convertible notes
        payable has accrued to March 31, 2005 (December 31, 2004 - $32,535).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|5. | LICENSE AGREEMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  
|   | Pursuant to an exclusive license agreement (the
        “Agreement”) with NorPac Technologies, Inc (formerly Cool
        Can Technologies, Inc.) (the “Licensor”), dated November 30,
        2003, the Company acquired the exclusive right and license (the “License”),
        for a period of 40 years, to use, commercialize and exploit the Licensor’s
        proprietary trademarks, patents, process information, technical information,
        designs and drawings associated with the Licensor’s self-chilling
        beverage containers technology (the “Technology”), including
        the right to manufacture, use and sell apparatus and products embodying
        the Technology within the countries comprising the European Union and
        the People’s Republic of China. The Company also has the right to
        sub-license the right to manufacture, use and sell products embodying
        the Technology.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

F-8

---

BALSAM VENTURES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2005
  (Unaudited)
  (Stated in U.S. Dollars)

|5. | LICENSE AGREEMENT(Continued)                              
|-- | ----------------------------------------------------------
|  
|   | In consideration for the Agreement, the Company agreed to:
|  
|   | a)                                                        
|  
|   | b)                                                        
|  

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | i)                                                                                                                                                                                                                                                                                                                                     | a sales royalty equal to 2% of gross profits from
        sales of all apparatus incorporating the Technology and/or commercial
        goods or products incorporating the Technology;                                                                                           
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | ii)                                                                                                                                                                                                                                                                                                                                    | a license royalty equal to 5% of revenues received
        from sub-licensing the Technology, and;                                                                                                                                                                                
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | iii)                                                                                                                                                                                                                                                                                                                                   | a minimum royalty payment of $5,000 per month
        commencing January 15, 2006, which is to be credited toward all royalty
        payments under the Agreement that have been paid by the Company or become
        payable by the Company during the course of the Agreement.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                   
|   | The Technology and patents and trademarks
        of the Licensor included in the Technology remain the property of the
        Licensor subject to the terms of the License granted under the Agreement.
        However, the Company has a right of first refusal to acquire the intellectual
        property subject to the Agreement should the Licensor seek to dispose
        of the Technology during the Agreement. The Agreement supercedes all prior
        arrangements and agreements between the Company and the Licensor in respect
        of the Technology.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                   
|6. | RELATED PARTY TRANSACTIONS
      Amounts paid to related parties were based on exchange
        amounts which represented the amounts agreed upon by the related parties.
        Amounts paid or payable to related parties not disclosed elsewhere include
        the following:                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | During the quarter ended March 31, 2005,
        director’s compensation totalled $Nil (2004 - $Nil);
      As at March 31, 2005, accounts payable includes $21,720
        (December 31, 2004 - $20,873) due to directors. Convertible notes
        payable includes $33,899 (December 31, 2004 - $33,899) due to
        directors.

F-9

---

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

Cautionary Statement Regarding Forward-Looking Statements

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

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

DESCRIPTION OF BUSINESS

The following discussion and analysis summarizes our plan
  of operations for the next twelve months, our results of operations for the
  three month period ended March 31, 2005 and changes in our financial condition
  from December 31, 2004. This discussion should be read in conjunction with the
  Management’s Discussion and Analysis or Plan of Operations included in
  our Annual Report on Form 10-KSB for the year ended December 31, 2004.

We are in the business of developing and marketing a patented
  unique proprietary technology (the “Cool Can Technology”) that we
  have licensed from NorPac Technologies, Inc. (formerly Cool Can Technologies,
  Inc.) (“NorPac”). Our license from NorPac allows us to sublicense
  and manufacture self-chilling beverage containers based upon the Cool Can Technology.

The Cool Can Technology is being used to develop a product
  referred to by NorPac as the “InstaCool” product. The InstaCool
  product consists of a module for insertion into an aluminum beverage container
  and incorporates a cartridge of liquid carbon dioxide ("CO2") that is held in
  place by a cartridge holder. This module would be inserted into the aluminum
  beverage container during an automated canning process and the containers 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,
  a valve mechanism would release the compressed liquid CO2. The escaping CO2
  would then form into small particles of frozen snow at extremely cold temperatures
  and rapidly impart a chilling action to the beverage. The targeted result is
  to allow consumers to purchase and store a beverage at room temperature and
  enjoy it cold without having to refrigerate the beverage.

On November 30, 2003, we entered into a license agreement
  (the “License Agreement”) with NorPac which grants us the exclusive
  right and license (the “License”), for a period of 40 years, to
  enjoy, commercialize and exploit the Cool Can Technology in countries comprising
  the European

---

Union and the Peoples Republic of China (the “Exclusive
  Region”). Under the License Agreement, we have the right, within the Exclusive
  Region, to manufacture, use and sell apparatus and products embodying the Cool
  Can Technology and grant sub-licenses of our right to manufacture, use and sell
  products embodying the Cool Can Technology. The License Agreement further provides
  us with a right of first refusal with respect to any transfers, sales or assignments
  of the Cool Can Technology by NorPac, including patents, trademarks or other
  intellectual property rights. We also have a right of first refusal with respect
  to any licensing rights for countries which are not a party to the North American
  Free Trade Agreement and are outside of the Exclusive Region. In consideration
  for the rights granted to us under the License Agreement, we agreed to:

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

PLAN OF OPERATIONS

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

|(1) | We plan to seek sub-licensing agreements to finance
        approximately $300,000 for the development of the Cool Can Technology.
        We plan to proceed with product development and production of samples
        of self-chilling beverage container modules. This phase of development
        will include the following elements and will take approximately nine months
        once financing is in place:
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   

| | (a) | Product fabrication, including testing and studying
        design concepts, making required design modifications, developing and
        building a fully functioning prototype self-chilling beverage container.                                                                                                                          
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) | Follow up on prototype development including, analysis,
        testing and fine tooling required for production and finalizing all production
        drawings and specifications.                                                                                                                                                         
|
| | (c) | Producing high-volume production cost estimates
        and methods, including estimation of tooling costs, sourcing production
        facilities and requesting bids for tender from potential manufacturers
        of component parts and analysis and cost estimates for projected method
        of assembling of the chilling module.
|

|(2) | 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.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(3) | We anticipate spending approximately $140,000
        on general overhead expenses, including office expenses and consulting
        fees.                                                          

Subject to our obtaining adequate financing, we anticipate that we will be spending approximately $460,000 over the next twelve-month period pursuing our stated plan of operations. Of these anticipated expenditures, we anticipate that
$230,000 will be spent on our plan of operations over

---

the next six months. Our present cash reserves are not sufficient
  for us to carry out our plan of operations without substantial additional financing.
  We are currently attempting to arrange for financing through sub-licenses that
  would enable us to proceed with our plan of operations. We have reached a verbal
  agreement with BIG K.G. for a proposed private placement equity financing, however
  there exists a substantial doubt that we will be able to complete the proposed
  private placement. We do not have any other financing arrangements in place
  and there is no assurance that we will be able to achieve sufficient financing
  required to commercialize the InstaCool technology and to earn revenues. In
  the event that we are not successful in developing and commercializing the InstaCool
  technology, we intend to focus on the advertising and marketing campaign for
  our U.S. immigration web site business.

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.

RESULTS OF OPERATIONS

|First Quarter Summary |  |                                   |  |  |           |  |  |                       | 
|--------------------- |  | --------------------------------- |  |  | --------- |  |  | --------------------- | 
|                     
|                      |  | Three Months Ended March
      31 |  |  |           | 
|                      |  |                                   |  |  |           |  |  | Percentage            | 
|                      |  | 2005                              |  |  | 2004      |  |  | Increase / (Decrease) | 
|Revenue               |  | $Nil                              |  |  | $Nil      |  |  | --                    | 
|Expenses              |  | (27,418)                          |  |  | (24,575)  |  |  | 11.6%                 | 
|Net Income (Loss)     |  | $(27,418)                         |  |  | $(24,575) |  |  | (11.6)%               | 

Revenue

We did not earn any revenues during the quarter ended March
  31, 2005. We do not anticipate earning revenues until we are successful completing
  the development and commercialization of the Cool Can Technology, of which there
  is no assurance. We are presently in the development stage and we can provide
  no assurance that we will be successful in earning revenues from the Cool Can
  Technology even if we achieve the financing necessary to develop this technology.

Operating Expenses

Our operating expenses for the quarterly periods ended March
  31, 2005 and 2004 consisted of the following:

|                             | Three
        Months Ended March 31 |  |          |  | 
|---------------------------- | ----------------------------------- |  | -------- |  | 
|                             |                                     |  |          |  | 
|                             | 2005                                |  | 2004     |  | 
|Consulting Services          | $15,000                             |  | $15,000  |  | 
|Professional Fees            | 5,933                               |  | 2,425    |  | 
|Interest and Bank Charges    | 6,446                               |  | 6,475    |  | 
|Office and Sundry            | --                                  |  | 103      |  | 
|Foreign Exchange (Gain) Loss | (12)                                |  | 532      |  | 
|Regulatory                   | --                                  |  | 40       |  | 
|Accretion of Discount        | 51                                  |  | --       |  | 
|Total Operating Expenses     | $ 27,418                            |  | $ 24,575 |  | 

---

Our operating expenses during the quarter ended March 31,
  2005 consisted primarily of consulting fees in the amount of $15,000, incurred
  on account of general administrative and accounting services and for services
  provided in connection with our regulatory filings. In addition, we incurred
  professional fees in amount of $5,933, incurred in connection with meeting
  our ongoing reporting obligations under applicable securities laws, and interest
  and bank charges of $6,446.

LIQUIDITY AND FINANCIAL CONDITION

|Working Capital           |   |                   |   |   |                      |   |  |                       | 
|------------------------- | - | ----------------- | - | - | -------------------- | - |  | --------------------- | 
|                          |   |                   |   |   |                      |   |  | Percentage            | 
|                          |   | At March 31, 2005 |   |   | At December 31, 2004 |   |  | Increase / (Decrease) | 
|Current Assets            | $ | 1,141             |   | $ | 1,033                |   |  | 10.5%                 | 
|Current Liabilities       |   | (186,592          | ) |   | (159,117             | ) |  | 17.3%                 | 
|Working Capital (Deficit) | $ | (185,451          | ) | $ | (158,084             | ) |  | 17.3%                 | 

Our working capital deficit increased by 17.3% during the past three months as a result of the fact that we had no revenues or significant sources of financing to offset the increase in our accounts payable arising from our operations. We had cash
of $1,141 at March 31, 2005 as compared to cash of $1,033 at December 31, 2004.

|Cash Flows                                     |   |                             |  |   |      |  
|---------------------------------------------- | - | --------------------------- |  | - | ---- | -
|                                               |   | Three Months Ended March 31 | 
|                                               |   | 2005                        |  |   | 2004 |  
|Cash Flows from (used in) Operating Activities | $ | 108                         |  | $ | (32  | )
|Cash Flows from (used in) Investing Activities |   | Nil                         |  |   | Nil  |  
|Cash Flows from (used in) Financing Activities |   | Nil                         |  |   | Nil  |  
|Net Increase (decrease) in Cash During Period  | $ | 108                         |  | $ | (32  | )

Financing Requirements

From inception to March 31, 2005, we have suffered cumulative
  losses in the amount of $783,502. We expect to continue to incur substantial
  losses as we continue the development of our business. Since our inception,
  we have funded operations through common stock issuances, related party loans,
  and the support of creditors in order to meet our strategic objectives. Our
  management believes that sufficient funding will be available to meet our business
  objectives, including anticipated cash needs for working capital, and are currently
  evaluating several financing options, including a public offering of securities.
  However, there can be no assurance that we will be able to obtain sufficient
  funds to continue the development of and, if successful, to commence the sale
  of, our products. As a result of the foregoing, our independent auditors believe
  there exists substantial doubt about our ability to continue as a going concern.

We will require additional financing if we are not successful
  in earning revenues from the Cool Can Technology. There is no assurance that
  we will be able to obtain additional financing if and when

---

required. We anticipate that any additional financing may
  be in the form of sales of additional shares of our common stock which may result
  in dilution to our current shareholders.

We have reached a verbal agreement with BIG K.G. (“BIG”),
  a German company, pursuant to which BIG has agreed to act as our agent for the
  purpose of locating European placees for a proposed private placement of 40,000,000
  units at a price of $0.025 per unit for total proceeds of $1,000,000
  (the “Private Placement”). Under the terms of our verbal agreement,
  each unit to be issued under the proposed Private Placement will consist of
  one share in our common stock and one share purchase warrant entitling the warrant
  holder to purchase one additional share of our common stock at a price of $0.05
  per share. BIG is to receive a commission of $100,000 for services provided
  in connection with the proposed Private Placement. Although we have reached
  a verbal agreement with BIG in respect of the proposed Private Placement, we
  have not yet formalized our agreement with BIG. As a considerable period of
  time has passed without our being able to reach a formalized agreement with
  BIG, there is a substantial doubt that the proposed Private Placement will actually
  be completed. We do not have any other financing arrangements in place.

OFF-BALANCE SHEET ARRANGEMENTS

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

CRITICAL ACCOUNTING POLICIES

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

Our significant accounting policies are disclosed in Note
  3 to the unaudited financial statements included in this Quarterly Report.

Convertible Notes Payable

During the year ended December 2003, the Company issued convertible
  notes, maturing October 1, 2006, aggregating $260,000 and bearing interest
  of 10% per annum. The notes are convertible into common shares at the lesser
  of $0.03 per share 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 stock.

Emerging Issues Task Force Release No. 98-5 and 00-27 state
  that any embedded beneficial conversion features present in convertible securities
  should be valued separately at issuance. The embedded beneficial conversion
  feature should be recognized and measured by allocating a portion of the proceeds
  equal to the intrinsic value of that feature to additional paid-in capital.
  That amount should be calculated at the commitment date as the difference between
  the effective

---

conversion price and the fair value of the common stock or
  other securities into which the security is convertible, multiplied by the number
  of shares into which the security is convertible. The Emerging Issues Task Force
  observed that in certain circumstances, the intrinsic value of the beneficial
  conversion feature may be greater than the proceeds allocated to the convertible
  instrument. In those situations, the amount of the discount assigned to the
  beneficial conversion feature is limited to the amount of the proceeds allocated
  to the convertible instrument. For convertible instruments that have a stated
  redemption date (such as term debt) the discount resulting from recording a
  beneficial conversion option should be accreted from the date of issuance to
  the stated redemption date of the convertible instrument. In the event of early
  conversion or default, the remaining discount would be recognized as interest
  expense during the period in which such early conversion or default occurs.

In applying the provisions of Emerging Issues Task Force Release
  Nos. 98-5 and 00-27, the Company recorded a discount on the convertible debentures
  in the amount of $260,000. This discount is being accreted to interest expense
  using the interest method over the life of the notes (three years). As the effective
  interest rate, which is determined by dividing the actual interest rate on the
  convertible debentures by the discounted debt amount, approaches infinity, the
  interest expense to be recorded approximates the future cash payments. Interest
  expense recorded related to the accretion of the discount for the quarter ended
  March 31, 2005 was $51 (2004 - $Nil). The remaining discount on the
  convertible debentures as of March 31, 2005 was $259,949 (2004 - $260,000).

Interest of $38,947 on these convertible notes payable
  has accrued to March 31, 2005 (December 31, 2004 - $32,535).

ITEM 3. CONTROLS AND PROCEDURES.

Evaluation Of Disclosure Controls And Procedures

As of the end of the period covered by this report, our management
  carried out an evaluation, under the supervision and with the participation
  of our principal executive officer and principal financial officer, of the effectiveness
  of the design and operation of our disclosure controls and procedures (as defined
  in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation,
  our principal executive officer and principal financial officer have concluded
  that our disclosure controls and procedures are, as of the date covered by this
  Quarterly Report, effective to ensure that the information required to be disclosed
  by us in the reports that we file or submit under the Exchange Act is recorded,
  processed, summarized and reported within the time periods specified in the
  SEC rules and forms.

Changes In Internal Controls Over Financial Reporting

In connection with the evaluation of our internal controls
  during our last fiscal quarter, our principal executive officer and principal
  financial officer have determined that there have been no changes to our internal
  controls over financial reporting that has materially affected, or is reasonably
  likely to materially effect, our internal controls over financial reporting.

---

PART II - OTHER INFORMATION

ITEM  1 .  LEGAL PROCEEDINGS.

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

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

None.

ITEM  3 .  DEFAULTS UPON SENIOR SECURITIES.

None.

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

None.

ITEM  5 .  OTHER INFORMATION.

None.

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

|Exhibit |                                                                                                                                                                   
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description of Exhibit                                                                                                                                            
|        |                                                                                                                                                                   
|3.1     | Articles of Incorporation.(1)                                                                                                                                     
|        |                                                                                                                                                                   
|3.2     | Bylaws.(1)                                                                                                                                                        
|        |                                                                                                                                                                   
|10.1    | Exclusive License Agreement dated June 5,
      2002 with Cool Can Technologies, Inc.(2)                                                                          
|        |                                                                                                                                                                   
|10.2    | Exclusive License Agreement dated November
      30, 2003 with Cool Can Technologies, Inc.(3)                                                                     
|        |                                                                                                                                                                   
|14.1    | Code of Ethics.(4)                                                                                                                                                
|        |                                                                                                                                                                   
|31.1    | Certification
      of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002.                                               
|        |                                                                                                                                                                   
|31.2    | Certification
      of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002.                                               
|        |                                                                                                                                                                   
|32.1    | Certification of
      Principal 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
      Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

---

|(1) | Previously Filed as an Exhibit to our Form SB-2 Registration Statement
      originally filed with the SEC on March 30, 2000.
|--- | -----------------------------------------------------------------------------------------------------------------------------
|(2) | Previously Filed as an Exhibit to our Current Report on Form 8-K filed
      on June 20, 2004.                               
|(3) | Previously Filed as an Exhibit to our Current Report on Form 8-K filed
      on January 9, 2004.                             
|(4) | Previously Filed as an Exhibit to our Annual Report on Form 10-KSB filed
      on May 17, 2005.                              

REPORTS ON FORM 8-K

We did not file any Current Reports on Form 8-K during the
  quarterly period ended March 31, 2005. The following reports on Form 8-K were
  filed since the quarterly period ended March 31, 2005:

|Date of Form 8-K | Date of Filing with the SEC            | Description of the Form 8-K                                                            
|---------------- | -------------------------------------- | ---------------------------------------------------------------------------------------
|                
|April 6, 2005    | April 8, 2005, and amended May 2, 2005 | Item  4.01  Disclosure of Changes in the
      Company’s Certifying Accountant.        
|                
|May 13, 2005     | May 17, 2005                           | Item  4.02  Disclosure of Non-Reliance
      On Previously Issued Financial Statements.

---

SIGNATURES

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

| |  | BALSAM VENTURES, INC.
| |  | ---------------------

|                    | By: | /s/ David Lam                     
|------------------- | --- | ----------------------------------
|Date:  May 23, 2005 |     | DAVID LAM                         
|                    |     | President, Chief Executive Officer
|                    |     | (Principal Executive Officer)     

|                    | By: | /s/ John Boschert                            
|------------------- | --- | ---------------------------------------------
|Date:  May 23, 2005 |     | JOHN BOSCHERT                                
|                    |     | Secretary, Treasurer, Chief Financial Officer
|                    |     | (Principal Accounting Officer)               

---