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

FORM 10-QSB

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

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

Commission File Number 000-32011

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

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

|SUITE 208, 20 EAST FOOTHILL BLVD.        |           
|---------------------------------------- | ----------
|ARCADIA, CALIFORNIA                      | 91006     
|(Address of principal executive offices) | (Zip Code)

Issuer's telephone number, including area code: 626-574-2911

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

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

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

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PART 1 - FINANCIAL INFORMATION

Item 1.     Financial Statements

The accompanying un-audited financial statements have been
  prepared in accordance with the instructions to Form 10-QSB and, therefore,
  do not include all information and footnotes necessary for a complete presentation
  of financial position, results of operations, cash flows, and stockholders'
  deficit in conformity with generally accepted accounting principles. In the
  opinion of management, all adjustments considered necessary for a fair presentation
  of the results of operations and financial position have been included and all
  such adjustments are of a normal recurring nature. Operating results for the
  six months ended June 30, 2003 are not necessarily indicative of the results
  that can be expected for the year ending December 31, 2003.

2

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BALSAM VENTURES INC.(A Development Stage Company)

FINANCIAL STATEMENTS

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



F-1

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BALSAM VENTURES INC.(A Development Stage Company)

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

|                                                           | JUNE 30 |          | DECEMBER 31 |     
|---------------------------------------------------------- | ------- | -------- | ----------- | ----
|                                                           |         | 2003     |             | 2002
|                                                           |         |          |             |     
|                                                           |         |          |             |     
|ASSETS                                                     |         |          |             |     
|                                                           |         |          |             |     
|Current                                                    |         |          |             |     
|Cash                                                       | $       | -        |             | $   
|                                                           |         |          |             |     
|Software Development Costs                                 |         | 8,675    |             |     
|                                                           |         |          |             |     
|                                                           |         |          |             |     
|                                                           | $       | 8,675    |             | $   
|                                                           |         |          |             |     
|                                                           |         |          |             |     
|LIABILITIES                                                |         |          |             |     
|                                                           |         |          |             |     
|Current                                                    |         |          |             |     
|Accounts payable                                           | $       | 228,800  |             | $   
|                                                           |         |          |             |     
|                                                           |         |          |             |     
|SHAREHOLDERS DEFICIENCY                                   |         |          |             |     
|                                                           |         |          |             |     
|Share Capital                                              |         |          |             |     
|Authorized:                                                |         |          |             |     
|100,000,000 common shares, par value
      with $0.001 per |         |          |             |     
|share                                                      |         |          |             |     
|                                                           |         |          |             |     
|Issued and outstanding:                                    |         |          |             |     
|20,200,000 common
      shares                             |         | 20,200   |             |     
|                                                           |         |          |             |     
|Additional paid-in capital                                 |         | 54,800   |             |     
|                                                           |         |          |             |     
|Deficit Accumulated During The Development Stage           |         | (295,125 | )           |     
|                                                           |         |          |             |     
|                                                           |         | (220,125 | )           |     
|                                                           |         |          |             |     
|                                                           |         |          |             |     
|                                                           | $       | 8,675    |             | $   
|                                                           |         |          |             |     

F-2

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BALSAM VENTURES INC.(A Development Stage Company)

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

|                        |                    |            |                  |   |            |  |   |            | INCEPTION |  
|----------------------- | ------------------ | ---------- | ---------------- | - | ---------- |  | - | ---------- | --------- | -
|                        |                    |            |                  |   |            |  |   |            | AUGUST 17 |  
|                        | THREE MONTHS ENDED |            | SIX MONTHS ENDED |   | 1999 TO    | 
|                        | JUNE 30            |            | JUNE 30          |   | JUNE 30    | 
|                        |                    | 2003       |                  |   | 2002       |  |   | 2003       |           |  
|                        |                    |            |                  |   |            |  |   |            |           |  
|                        |                    |            |                  |   |            |  |   |            |           |  
|Expenses                |                    |            |                  |   |            |  |   |            |           |  
|Consulting services     | $                  | 33,000     |                  | $ | 2,700      |  | $ | 66,000     |           | $
|Domain registration     |                    | 102        |                  |   | -          |  |   | 185        |           |  
|Professional fees       |                    | 10,895     |                  |   | 14,400     |  |   | 12,129     |           |  
|Office and sundry       |                    | (16        | )                |   | 2,441      |  |   | 51         |           |  
|Regulatory              |                    | -          |                  |   | 7,500      |  |   | -          |           |  
|Stock transfer services |                    | 25         |                  |   | 2,650      |  |   | 79         |           |  
|Travel                  |                    | -          |                  |   | -          |  |   | -          |           |  
|                        |                    |            |                  |   |            |  |   |            |           |  
|                        |                    |            |                  |   |            |  |   |            |           |  
|Net Loss For The Period |                    | 44,006     |                  |   | 29,691     |  |   | 78,444     |           |  
|                        |                    |            |                  |   |            |  |   |            |           |  
|                        |                    |            |                  |   |            |  |   |            |           |  
|Deficit Accumulated     |                    |            |                  |   |            |  |   |            |           |  
|During The Development  |                    |            |                  |   |            |  |   |            |           |  
|Stage, Beginning Of     |                    |            |                  |   |            |  |   |            |           |  
|Period                  |                    | 251,119    |                  |   | 61,620     |  |   | 216,681    |           |  
|                        |                    |            |                  |   |            |  |   |            |           |  
|                        |                    |            |                  |   |            |  |   |            |           |  
|Deficit Accumulated     |                    |            |                  |   |            |  |   |            |           |  
|During The Development  |                    |            |                  |   |            |  |   |            |           |  
|Stage, End Of Period    | $                  | 295,125    |                  | $ | 91,311     |  | $ | 295,125    |           | $
|                        |                    |            |                  |   |            |  |   |            |           |  
|                        |                    |            |                  |   |            |  |   |            |           |  
|                        |                    |            |                  |   |            |  |   |            |           |  
|Net Loss Per Share      | $                  | 0.01       |                  | $ | 0.01       |  | $ | 0.01       |           | $
|                        |                    |            |                  |   |            |  |   |            |           |  
|                        |                    |            |                  |   |            |  |   |            |           |  
|                        |                    |            |                  |   |            |  |   |            |           |  
|Weighted Average        |                    |            |                  |   |            |  |   |            |           |  
|Number Of Shares        |                    |            |                  |   |            |  |   |            |           |  
|Outstanding             |                    | 20,200,000 |                  |   | 20,200,000 |  |   | 20,200,000 |           |  
|                        |                    |            |                  |   |            |  |   |            |           |  

F-3

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BALSAM VENTURES INC.(A Development Stage Company)

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

|                             |                    |         |                  |   |         |   |   |         | INCEPTION |  
|---------------------------- | ------------------ | ------- | ---------------- | - | ------- | - | - | ------- | --------- | -
|                             |                    |         |                  |   |         |   |   |         | AUGUST 17 |  
|                             | THREE MONTHS ENDED |         | SIX MONTHS ENDED |   | 1999 TO |  
|                             | JUNE 30            |         | JUNE 30          |   | JUNE 30 |  
|                             |                    | 2003    |                  |   | 2002    |   |   | 2003    |           |  
|                             |                    |         |                  |   |         |   |   |         |           |  
|                             |                    |         |                  |   |         |   |   |         |           |  
|Cash Flows From Operating    |                    |         |                  |   |         |   |   |         |           |  
|Activities                   |                    |         |                  |   |         |   |   |         |           |  
|Net loss for the period      | $                  | (44,006 | )                | $ | (29,691 | ) | $ | (78,444 | )         | $
|                             |                    |         |                  |   |         |   |   |         |           |  
|Adjustments To Reconcile Net |                    |         |                  |   |         |   |   |         |           |  
|Loss To Net Cash Used By     |                    |         |                  |   |         |   |   |         |           |  
|Operating Activities         |                    |         |                  |   |         |   |   |         |           |  
|Change in accounts payable   |                    | 44,006  |                  |   | 18,565  |   |   | 78,399  |           |  
|                             |                    |         |                  |   |         |   |   |         |           |  
|                             |                    | -       |                  |   | (11,126 | ) |   | (45     | )         |  
|                             |                    |         |                  |   |         |   |   |         |           |  
|                             |                    |         |                  |   |         |   |   |         |           |  
|Cash Flows From Investing    |                    |         |                  |   |         |   |   |         |           |  
|Activity                     |                    |         |                  |   |         |   |   |         |           |  
|Software development costs   |                    | -       |                  |   | -       |   |   | -       |           |  
|                             |                    |         |                  |   |         |   |   |         |           |  
|                             |                    |         |                  |   |         |   |   |         |           |  
|Cash Flows From Financing    |                    |         |                  |   |         |   |   |         |           |  
|Activity                     |                    |         |                  |   |         |   |   |         |           |  
|Share capital                |                    | -       |                  |   | -       |   |   | -       |           |  
|                             |                    |         |                  |   |         |   |   |         |           |  
|                             |                    |         |                  |   |         |   |   |         |           |  
|Increase (Decrease) In Cash  |                    | -       |                  |   | (11,126 | ) |   | (45     | )         |  
|                             |                    |         |                  |   |         |   |   |         |           |  
|Cash, Beginning Of Period    |                    | -       |                  |   | 11,126  |   |   | 45      |           |  
|                             |                    |         |                  |   |         |   |   |         |           |  
|                             |                    |         |                  |   |         |   |   |         |           |  
|Cash, End Of Period          | $                  | -       |                  | $ | -       |   | $ | -       |           | $
|                             |                    |         |                  |   |         |   |   |         |           |  

F-4

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BALSAM VENTURES INC.(A Development Stage Company)

STATEMENT OF STOCKHOLDERS EQUITY

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

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

F-5

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BALSAM VENTURES INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

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

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

F-6

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BALSAM VENTURES INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

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

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

F-7

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BALSAM VENTURES INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

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

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

F-8

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BALSAM VENTURES INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

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

|2. | SIGNIFICANT ACCOUNTING POLICIES(Continued)                                                                                                                                                                                                                                                                                                               
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | g)                                                                                                                                                                                                                                                                                                                                                       
|3. | LICENSE
      Pursuant to an exclusive license agreement, as amended, dated June 5,
        2002, the Company has acquired the exclusive worldwide license to use,
        commercialize and license the technology for self-chilling beverage containers.
        In consideration of the grant of the exclusive license, the Company agreed
        to:
|   | a)                                                                                                                                                                                                                                                                                                                                                       
|   | b)                                                                                                                                                                                                                                                                                                                                                       
|   | c)                                                                                                                                                                                                                                                                                                                                                       
|   | d)                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                          
|   | The royalties in respect
        of any fiscal year following the fiscal year ended June 30, 2004 shall
        not be less than $200,000 per year.                                                                                                                                                                                                      

F-9

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BALSAM VENTURES INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

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

|4. | RELATED PARTY TRANSACTIONS
      During the six month period ended June 30, 2003, directors
        compensation totalled $36,000 (2002 - $Nil).
      Accounts payable includes $37,465 (2002 - $Nil) due
        to a director.                                                                                                                                        
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5. | CONTINGENCY
      As at June 30, 2003, the Company was in default under
        the terms of the amended license agreement described in Note 3. The Company
        is in receipt of an extension of the remedy period under the notice of
        default, and will have until September 30, 2003 to correct the default
        or the exclusive license will terminate.

F-10

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

FORWARD LOOKING STATEMENTS

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

OVERVIEW

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

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

We have completed the development of our web site and our
  web site is now operational. We have yet to achieve any sales of advertising
  on our web site. Our business plan was to solicit advertisers whose target market
  includes the users of our web site in order to generate revenues. We have not
  earned any revenue to date.

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

License of Cool Can Technology

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

3

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beverage container technology (the "Technology"). The licensed
  rights include the right to manufacture, use and sell apparatus and products
  embodying the Technology and the right to grant sub-licenses of our right to
  manufacture, use and sell products embodying the Technology. The consideration
  we have agreed to pay to Cool Can pursuant to the License Agreement is as follows:

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

We are presently in default of the License Agreement because
  we have failed to pay the $200,000 license fee by December 2, 2002 and we have
  received a notice of default from Cool Can on March 10, 2003 which required
  us to remedy the default within 30 days (the "Default Period") or lose our rights
  under the license agreement. On June 5, 2003, we reached an agreement with Cool
  Can to extend the Default Period. Accordingly, we now have until September 30,
  2003 to remedy the default or lose our rights under the license agreement.

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

PLAN OF OPERATIONS

Our plan of operations for the next twelve months will include
  the following components, subject to our achieving the required financing:

| | (1) | We plan to defer proceeding with an advertising and
        marketing campaign for our web site in order to concentrate our efforts
        and financial resources on the InstaCool technology. We anticipate spending
        approximately $6,000 over the
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

4

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| |     | next twelve months on ongoing operating and administrative
      expenses associated with maintaining our web site.                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (2) | We plan to raise the required
        $200,000 to pay for the payment under our License Agreement for the InstaCool
        technology already past due;                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (3) | We plan to spend approximately
        $300,000 to develop the InstaCool Technology. We plan to proceed with
        product development and production of samples of our self-chilling beverage
        container modules. These costs will be accounted for under our license
        agreement with Cool Can towards the expenditures for the development of
        the Technology to be incurred by us pursuant to the license agreement.
        This phase of development will include the following elements and will
        take approximately nine months once financing is in place:
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (4) | 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.                                                                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (5) | We anticipate spending approximately
        $140,000 on general overhead expenses, including office expenses and consulting
        fees.                                                                                                                                                                                                                                                                                                                                                                                                                                                      

We anticipate that we will be spending approximately $666,000
  over the next twelve-month period pursuing our stated plan of operations. Of
  these anticipated expenditures, we anticipate that $363,000 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 an equity financing
  that would enable us to proceed with our plan of operations. However, we do
  not have any financing arrangements in place and there is no assurance that
  we will be able to achieve the required financing. If we are not able to complete
  a financing to pay for the $200,000 due under our License Agreement and Cool
  Can refuses to grant a further extension of the default period, then our License
  Agreement will terminate and we will lose all rights to the InstaCool Technology.
  If we are successful in maintaining our license of the Cool Can technology,
  there is no assurance that we will be able to achieve sufficient financing that
  would be required to commercialize this technology and to earn revenues. We
  are presently in default of the License Agreement because we have failed to
  pay the $200,000 license fee by December 2, 2002. On June 5, 2003, we reached
  an agreement with Cool Can to extend the Default Period. Accordingly, we now
  have until September 30, 2003 to remedy the default or lose our rights under
  the license

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agreement. In the event that we are not successful in maintaining
  the license agreement, we intend to focus on the advertising and marketing campaign
  for our web site.

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

Results of Operations

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

We incurred expenses in the amount of $78,444 for the six
  month period ended June 30, 2003, compared to $38,054 for the six month period
  ended June 30, 2002. We incurred expenses in the amount of $44,006 for the three
  month period ended June 30, 2003, compared to $29,691 for the same three month
  period in the previous year. The increase in expenditures for the six and three
  month periods ended on June 30, 2003 compared with 2002 are primarily attributable
  to the expenditure of significant consulting fees. These consulting services
  were incurred in connection with our efforts to raise the financing necessary
  to complete the $200,000 payment due to Cool Can under the License Agreement
  and to proceed with development of the Technology. We anticipate our operating
  costs will increase without any corresponding increase in revenues if we achieve
  the financing necessary to proceed with the development of the InstaCool technology.

We incurred a loss of $78,444 for the six month period ended
  June 30, 2003, compared to a loss of $38,054 for the six month period ended
  June 30, 2002. We incurred a loss of $44,006 for the three month period ended
  June 30, 2003, compared to a loss of $29,691 for the three month period ended
  June 30, 2002. Our net loss was attributable entirely to our operating expenses.

Liquidity and Financial Condition

As of June 30, 2003, we had no cash, compared to cash of $45
  on December 31, 2002. We had a working capital deficit of $228,800 as of June
  30, 2003, compared to a working capital deficit of $150,356 as of December 31,
  2002. The deficit of working capital is attributable primarily to our operating
  expenses, our inability to earn revenues, and an increase in our accounts payable.

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

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ITEM 3.     CONTROLS AND PROCEDURES.

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

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

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PART II - OTHER INFORMATION

Item 1.     Legal Proceedings

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

Item 2.     Changes in Securities

We did not complete any unregistered sales of our common stock during our fiscal quarter ended June 30, 2003.

Item 3.     Defaults upon Senior Securities

None.

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

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

Item 5.     Other Information

None.

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

EXHIBITS REQUIRED BY ITEM 601 OF FORM 8-K

|Exhibit Number | Description of Exhibit                                                                                                                                                                       
|-------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1            | Exclusive License Agreement dated June 5, 2002 (2)                                                                                                                                           
|3.1            | Articles of Incorporation (1)                                                                                                                                                                
|3.2            | Bylaws, as amended (1)                                                                                                                                                                       
|4.1            | Share Certificate (1)                                                                                                                                                                        
|10.1           | Amendment No.1 to Exclusive License Agreement between
        Cool Can Technologies, Inc. and Balsam Ventures, Inc. dated September
        2, 2002 (3)                                      
|31.1           | Certification of Chief Executive Officer and Chief
        Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
        2002                                               
|32.1           | Certification of Chief Executive Officer and Chief
        Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
        to Section 906 of the Sarbanes-Oxley Act of 2002

---

| | (1) | Previously filed with the Securities and Exchange Commission
      as an exhibit to the Registrant's Form SB-2 Registration Statement, as amended
      on March 30, 2000.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | Previously filed as an exhibit to a Current Report on Form
      8-K filed on June 20, 2002                                                                               
| | (3) | Previously filed as an exhibit to a Quarterly Report on Form
      10-QSB filed on November 14, 2002                                                                      

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REPORTS ON FORM 8-K

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

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SIGNATURES

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

BALSAM VENTURES, INC.

Date: August 15, 2003

| | By: | /s/David Lam                      
| | --- | ----------------------------------
| |     |                                   
| |     | DAVID LAM,                        
| |     | President, Chief Executive Officer
| |     | and Director                      



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